Top 7 Savvy Tax Saving Expenses for Virtual Assistants
During the month of March, the Association of Virtual Assistants is focusing on the topic of money. One of the most common topics that comes up this time of year is regarding taxes. For this topic, it is crucial to bring in an expert.
Adam Knihtila is a Virtual CFO and an Accounting Firm Owner that Translates Finances into English who is an expert on the topic of taxes. The AVA is excited to have Adam share how to be savvy with our tax-saving expenses. We’re even more excited that Adam was a guest trainer for AVA members this month!
Here’s what Adam has to say when it comes to tax-saving expenses for virtual assistants.
Virtual Assistants are a unique group of business professionals when it comes to filing their tax returns and claiming “ordinary and necessary” business expenses. The majority never have employees, never have a brick-and-mortar office space and attract their clients through social media and other online resources.
A common question I am asked is, “What can I deduct and what can’t I deduct?”
There is a lot of information spread on the internet and social media that is not completely correct (important pieces are left out) or is completely incorrect. This harms not only the Virtual Assistant that is the recipient of that information but also their relationship with the person that provided the information.
Getting the information directly from a professional that not only does accounting and taxes year-round but has many years of experience working with Self-Employed Virtual Assistants to ensure they are Paying the Smallest Amount of Tax, Legally!
Below is a list of the Top 7 Savvy Tax Saving Expenses for Virtual Assistants. To ensure that these expenses are tax-deductible you should consult with an accountant or tax advisor to go over your particular situation.
- Home Office (Can take either the safe harbor method of $5/square foot of home office space or using the percentage of home office versus total square footage of the home can take that percentage of the mortgage interest, real estate taxes, insurance, utilities, HOA dues, repairs & maintenance, depreciation, etc.)
- Advertising (Social Media, Google Ads, Print, Radio, TV, etc.)
- Amounts paid to subcontractors (Graphic Designers, Website Designers, etc.)
- Dues & Subscriptions (AVA Membership, Annual Fees, Software Subscriptions, etc.)
- Gifts (Maximum of $25/client/year)
- Insurance Premiums (Liability, Errors, and Omissions, etc.)
- Continuing Education (AVA Certifications)
Other common expenses for Virtual Assistants include items such as a portion of your cell phone bill, paying for products to use as marketing giveaways, filing your taxes, hiring a bookkeeper, or most anything else that you are not reimbursed for that is directly purchased to complete your job duties.
It does not matter if these expenses come directly from a business bank account, a PayPal (or similar) account, or a credit card. You will claim the expenses when you make the purchase, not when you pay the credit card bill.
Ready to hire a professional to assist you in filing taxes this year? The AVA happily endorses Work From Home Financial. They can assist you with filing your tax return and/or handling payroll and bookkeeping duties regardless of where you live or work. Whether you are in Portland, Maine, or Portland, Oregon, and everywhere in between they are available to serve YOU!
They can be reached at 804-829-3829, info@AccountantThatCares.com, or www.AccountantThatCares.com.
Adam Knihtila is a Virtual CFO and Accounting Firm Owner that Translates Finances into English. He has experience working with many industries, but his talents and passions lie in helping small business owners Make More Money!
Knowing the steps to set up your business, price your services, and keep more of your revenue in your pocket are the advantages that he provides to his clients. He will take some of the biggest things you HATE off your plate: processing payroll taxes and forms, bookkeeping, and filing your income taxes. He then goes one step beyond and creates a customized tax plan that fits YOU, YOUR business, and YOUR goals and helps you implement, track, and revise those goals, as necessary.
Plus, he has been known to tell a dad joke, sing the lowest notes you have ever heard (think Marvin Gaye mixed with James Earl Jones), and spend his free time on the nearest golf course or watching his favorite football team, the Minnesota Vikings.
The Association of Virtual Assistants’ mission is to become the most trusted source of information in the VA industry. We provide resources, education, and training for virtual assistants at every stage of their career, and for clients as well in a like-minded community.