Quick Answer
Yes, virtual assistant costs are 100% deductible as business expenses if the work is ordinary and necessary for your business. In 2025, businesses paid over $4.2 billion to VAs globally. You'll need to issue a 1099-NEC if you pay any VA more than $600 annually.
Best Answer
Robert Kim, CPA
Best for anyone who runs a business and hires virtual assistants for administrative, marketing, or operational tasks
How virtual assistant costs are deductible
Virtual assistant expenses are fully deductible business expenses under IRC Section 162, which allows deductions for ordinary and necessary business expenses. The IRS considers VA costs legitimate if the work directly supports your business operations.
According to IRS Publication 535, payments to independent contractors (including VAs) are deductible in the year you pay them, not when the work is performed. This makes VA costs particularly valuable for tax planning.
Example: Annual VA deduction calculation
Let's say you hire three virtual assistants in 2026:
Total deductible amount: $16,200
If you're in the 24% tax bracket, this deduction saves you $3,888 in federal taxes alone. Add state taxes (typically 4-8%), and your total savings could reach $4,500-5,400.
Documentation requirements you need
Key factors that affect deductibility
What you should do
1. Track all VA payments in your accounting system
2. Collect W-9 forms from VAs at the start of working relationships
3. Issue 1099-NEC forms by January 31 for payments $600+
4. Categorize VA expenses properly (administrative, marketing, etc.)
Use our return scanner to check if you've missed claiming VA expenses from previous years — you may be able to amend returns for additional refunds.
Key takeaway: Virtual assistant costs are 100% deductible business expenses, potentially saving you 24-32% of the total amount paid in combined federal and state taxes.
*Sources: [IRS Publication 535](https://www.irs.gov/pub/irs-pdf/p535.pdf), IRC Section 162*
Key Takeaway: Virtual assistant costs are 100% deductible business expenses that can save you 24-32% of the total amount paid in combined federal and state taxes.
Tax savings from VA deductions by business income level
| Annual Income | Sample VA Costs | Tax Bracket | Federal Tax Savings | Total Savings (with SE tax) |
|---|---|---|---|---|
| $50,000 | $5,000 | 22% | $1,100 | $1,865 |
| $100,000 | $12,000 | 24% | $2,880 | $4,368 |
| $200,000 | $25,000 | 32% | $8,000 | $11,825 |
More Perspectives
Diana Flores, EA
Best for freelancers who hire VAs to handle client work overflow or administrative tasks
VA deductions for freelancers
As a freelancer, VA costs are deductible on Schedule C as contractor payments. The key difference from larger businesses is that freelancers often pay VAs irregularly based on project needs.
Example: Project-based VA payments
Say you're a freelance graphic designer who hires a VA for client communication:
Total: $2,200 deductible
At a 22% tax bracket plus 15.3% self-employment tax, you save approximately $820 in total taxes.
Special considerations for freelancers
Key takeaway: Freelancers get double tax savings from VA deductions — reducing both income tax and the 15.3% self-employment tax.
Key Takeaway: Freelancers get double tax savings from VA deductions — reducing both income tax and the 15.3% self-employment tax.
Robert Kim, CPA
Best for coaches, course creators, and content creators who hire VAs for customer support, content creation, or tech assistance
VA deductions for digital entrepreneurs
Online business owners often have the highest VA expenses due to customer support, content creation, and technical needs. These costs are all deductible if they support your business operations.
Common deductible VA services
Example: Course creator's annual VA expenses
Total deductible: $28,800
For a course creator earning $200,000 (24% bracket), this deduction saves $6,912 in federal taxes plus state taxes.
Pro tip for course creators
Many VAs work on project retainers. Pay December retainers in December (not January) to maximize current-year deductions.
Key takeaway: Digital entrepreneurs often have the highest VA expenses ($15,000-50,000+ annually) but also the highest tax savings from these deductions.
Key Takeaway: Digital entrepreneurs often have the highest VA expenses ($15,000-50,000+ annually) but also the highest tax savings from these deductions.
Sources
- IRS Publication 535 — Business Expenses
- IRS Form 1099-NEC Instructions — Nonemployee Compensation
Reviewed by Robert Kim, CPA on February 28, 2026
This content is for educational purposes only and is not a substitute for professional tax advice. Consult a qualified tax professional for advice specific to your situation.