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Virtual Assistants need not worry about what to deduct and what not to deduct during their tax prep. Although there are people out there willing to assist you, there are things you can do to get the ball rolling. Depending on how long you've been in business, you might consider doing it all yourself.
If you are organized, or like me, semi-organized, you have a spreadsheet/folders/notebooks with careful notations of the money you made and the money you had to dish out during the year. Even if you some how forgot your debit card or your checkbook during a transaction, I'm sure you had a receipt written out by the client. So pull out that handy brown envelope with all the receipts you've tucked away. You'll definitely need it. Below are a few nuggets in this article to guide you in the event you are scratching your head right now. I know for some, tax time can be difficult. It is my goal to ease the pain a bit. So, here we go.
Capital Expenses
You must capitalize, rather than deduct, some costs such as the business start-up costs, business assets, and improvements. These costs are a part of your investment in your business and are called capital expenses. Capital expenses are considered assets in your business. In general, there are three types of costs you capitalize.
Personal vs. Business Expenses
Divide the total cost between the business and personal parts. You can deduct the business part. For example, if you borrow money and use 70% of it for business and the other 30% for a family vacation, you can only deduct 70% of the interest as a business expense.
Other items to include:
• Business Use of Home (deductions such as rent, utilities, etc.)
• Business Use of Car (mileage, repairs, and maintenance)
• Employees'/Subcontractors Income (W2 or 1099, respectively)
• Business Loan Expenses/Interest Fees
• Entrepreneur Small Biz Owner taxes (see www.irs.gov for the tax calculator)
• Insurance (bond, office equipment insurance)
You can also deduct educational tools or classes, vacations, dining, conferences, seminars, online courses, etc. Running a business requires a lot of work getting it started, maintaining, and tying up loose ends, which includes handling your tax obligations. Make sure you take care of your finances to ensure starting the new year off in the black.
Nikki Ruffin-Smith, CEO and founder of
Exhale to Excel Global Outreach and Empowerment ORG
(www.exhaletoexcel.org)
BUSINESS & FINANCES
5 WAYS A VA CAN SAVE YOU MONEY
ADAPTED FROM: Conversational Receptionist(@conversational.com) Nik
Virtual assistants can do many of the tasks a personal or executive assistant might handle onsite. By working with a virtual assistant instead of hiring a personal assistant full-time, you really can save more than $35,000 in a single year.That incredible cost difference is possible because you are only charged for your virtual assistant’s service when she is working and not for the inevitable downtime in between tasks.
Your virtual assistant doesn’t work full-time.
You pick the days and hours your virtual assistant will be working with you instead of having them work for you full-time. If you have even one full-time employee, you are legally required to provide certain benefits as well as file your taxes differently. Finding, interviewing, and hiring a personal assistant or executive assistant full-time to help you involves a lot more hassle than hiring a virtual assistant, which can be done with the click of a button.
Working with a virtual assistant requires zero office space.
If you want to hire a full-time assistant to work onsite, it’s assumed that you’ll be working from an office or leased commercial space. That’s problematic for home-based business owners because an onsite assistant is not going to feel comfortable coming to a home to work with a business owner they hardly know. But virtual assistants work remotely – in our case, from Conversational’s North American offices – so they can get the job done without requiring a single square foot of office space.
Virtual assistants charge only for time worked.
Virtual assistants are more cost-effective in general because they only charge for the time actually worked. Full-time assistants are being paid for their time at the office regardless of whether they are actively working on a task. Virtual assistants only charge when they’re actively working and over the workweek, those savings really add up!
A virtual assistant is usually cheaper than a freelancer.
A virtual assistant costs less than most freelancers because they offer a general spectrum of services rather than a single specialty. A virtual assistant can handle many of the tasks you might hire a freelancer for – editing and proofreading, research, project management, and more. While a freelancer can do much of the work a virtual assistant can, a freelancer has to charge a premium amount because they are forced to handle their own insurance and taxes. Our virtual assistants are employed by us full-time to ensure you don’t pay a premium for costs beyond your control.
You don’t have to give virtual assistants benefits or salaries.
Additional costs that come along with hiring an assistant full-time are the legally required benefits that must accompany their yearly salary. Every state’s regulations and rules are different, but all states require that business owners provide certain types of benefits to full-time employees and must abide by certain rules. Check your state’s website for detailed information. Virtual assistants cost between $300-$1,000 per month and don’t require any benefits. That’s a win win!
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