Virtual Assistants provide business to business services. They own and maintain their own businesses. So would you be surprised to find out that many of them are providing services in such a way that the IRS would actually classify them as ‘remote employees’ and as such their clients are in danger of owing taxes for them? Not only might you be surprised, I believe a large number of virtual assistants would be shocked to realize they fall in that group as well.
The IRS uses three main areas in which they look at control and independence in order to determine if you’re a contractor or an employee. Those three areas are:
- Behavioral
- Financial
- Type of Relationship
Each area is examined for certain factors which I’ll explain below.