It’s already the last week of January and 2014 is well underway. This is the time of year when all U.S. based Virtual Assistants, or self-employed professionals need to get their books in order for filing their taxes.
Being self-employed can sometimes be a little tricky as to what you need for your tax return, and especially for those V.As’ who are new to the industry. I know you surely have many questions, and hopefully this will give you first few steps in getting your books in order to file your returns.
Here’s hoping that this check list will help you get started.
Income as we all know is whatever we made providing our services to others. There a many VA’s who work for companies that are not registered within the United States, and so these companies will not issue you a 1099 income form. If this is the case it is simply a matter of adding up all the income from various sources you received from January 1 through to December 31, 2013. If you use PayPal or some other online site to receive payments, then you can always download your annual income report from this site.
Expenses can be a little tricky. First of all as a self -employed professional you will be using a Schedule C on your 1040 tax return. As for deductions the attached link to the IRS should be able to assist: Deducting Business Expenses.
However my general rule of thumb is if you use something solely for your business or in the provision of your business, then you can claim it as a deductible expense. So in general I would include:
- Software & licenses purchased
- Service repairs for laptops etc.
- Headsets – for transcribers
- Internet bills/cellphone bills
- Advertising includes website hosting fees
- Home office the IRS has outlined a new simpler option which can be found here Home Office Deductions
I do hope this makes it easier for you in getting your books in order and filing your taxes won’t be such a daunting experience. In addition it is best to keep and go through your receipts for the year, and have a dedicated bank account PayPal or otherwise for your business transactions. This makes it easier to keep track of your business income and expenses, and also helps to separate your personal expenses from your business expenses.
Have a great day.
Althea @ Virtually Yours P.A.