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When it comes to working from home as a Virtual Assistant there are two routes in which you can take in terms of your tax status.You can be an Independent Contractor or an Employee.
Employee
An employee holds a permanent position with the company, whether it is part time or full time. They are on the business’ payroll, and typically earn a paycheck at the end of each pay period. They usually do not control the hours in which they work. They can work from home or work in an office. Many times if they telecommute the employer will supply the equipment that you need. But the thing that really differentiates you from an Independent Contractor is that the employer controls the way in which you do your job, your working hours, the procedures you take, and they give you a title within the company, and they pay you either hourly or salary withholding taxes and paying your FICA taxes.
Independent Contractor
Independent contractors, on the other hand, are generally only used by a company when their specific skill sets are needed. This can be long term, such as is the case with Virtual Assistants or they may be hired on a short term basis, or even per project, hired multiple times by the same company to perform a specific task or group of tasks.
Independent contractors are not offered a benefits package, supplies or direction on how, when, where and why each task is to be performed. They may work with several different companies to earn a living and the companies that contract with them do not pay their FICA taxes or withhold income taxes. They are able to set their own hours, and must purchase their own tools to complete the job.
There have been laws created that separate the two forms of job titles, which protect both the employee and the contractor. Choosing which way to go for employment is not just based on what you need to support yourself or what you want to call yourself. There are very specific guidelines set up by the IRS to determine your status. If you want to be an Independent Contractor study the IRS guidelines and make sure that you follow them, and make sure those you contract with follow them so that lines are not crossed.
If you do not have enough business and you aren’t getting rejected then you’re not sending out enough proposals or trying hard enough in your business. It’s true, being rejected is part of being a freelancer. As a Virtual Assistant you are a freelancer and you are going to have to seek out the projects that you want. You might have to send 100 proposals before you get one yes… but send the proposals, you must.
Make it a goal to be rejected at least once a day.
Talk to enough people each day about your business that you will get at least one person saying the words, “no I am not interested” at least once. Once you get that rejection, not the “I’ll call you later” or “not today” but the “out and out NO” then you can stop for the day if you wish. But remember, each no gets you closer to the yes that you need and want.
You should be asking for the work that you want and seeking the opportunities that are out there. As a freelancer, no one is going to do it for you. It’s up to you! Just remember that when your proposals are rejected it is not always your fault. Sometimes you’re just not the right fit or it wasn’t the right time. That is okay because each time you send out a proposal, each time you talk to a prospective client, and each time you reach out you will learn something and you will get better.
So go out there and get rejected!
VA farms can offer enticing job openings that make any new virtual assistant think that they can get their start with such a company. For those with no experience, it can seem like a blessing to be offered work, no matter the stipulations.
However, there may be serious problems with these farms that will have you actually running the other way once you begin doing business with them.
You are treated like an employee.
VA farms tend to treat you more like an employee, even if you are under an independent contractor agreement with them. They may request certain hours for you to work and demand other requirements that they would of a typical employee. Many ride a thin line along the contract, as being an independent contractor for a company is different from being employed by them.
Unfairly low pay rates.
Another disadvantage of working with VA farms is the rate of pay. The farms get their work from the clients and then will then outsource the work to the virtual assistants they have hired for an unfairly lower rate.These rates are often much worse than legitimate temp agencies such as Manpower because they treat you “like” an independent contractor, yet pay you such low rates that once expenses and taxes are taken into consideration you’re lucky to be making minimum wage.
No freedom as a business owner.
A third danger with VA farms is the lack of freedom you have. Many virtual assistants choose to work at home in order to have more time for their family. With these VA Farms, their time can actually be just as limited as if they were working outside the home. With the outrageous demands that some farms ask, all of the flexibility, and other advantages offered by working at home with your own business can be missed out on entirely.
Do your homework.
The important thing to do is to do your homework. Check out any company you plan to work with and demand a fair living wage for your work. Do not under charge yourself just because there are people who will. The saying that “people get what they pay for” is true here. If someone is not willing to pay you the rate that you deserve, perhaps you do not need to work with them in the first place.
So many people get it wrong when they decide to hire a Virtual Assistant. They wrongly treat their VA as if she is nothing more than an employee and often worse than an employee.
If you expect your VA to be available 24/7, you may need to hire an employee.
If you expect your VA to use your tools, your equipment, and do everything your way, you may need to hire an employee.
If you plan to micro manage your VA’s time, you may need to hire an employee.
There is nothing wrong with hiring an employee or a telecommuter for a secretarial or administrative position but there are different implications regarding taxes if you do.
Please pay attention to the rules regarding hiring an employee vs. an independent contractor provided by the IRS or your own government’s rules because you do not want something biting you in the butt later.
Recently someone bragged to me about hiring a Virtual Assistant out of Texas for only $3.75 per hour that will work 24/7 if needed. I was appalled of course, but the other aspect of this as someone who advises businesses was to tell him that he cannot do that.
There are minimum wage laws in each state and federally in the USA and when you hire people on an hourly basis you are risking being sued not just by the VA but by the government if you aren’t following the rules.
There are many moral reasons why hiring someone for that wage in the USA is wrong too, I won’t go into the morality of hiring people over seas in this post but wherever you hire someone they deserve to get a fair wage when you are expecting good, professional and expert work.
If you have a website where you are selling your services please, do not put ads on your site. Putting Google ads on your service provider site will only send people to other sites, maybe to people who charge less than you, so please DO NOT DO THAT!
Now, if you offer a service and want to recommend other services that go outside of your niche, that might be a fine thing to do, but be careful. This can be a very tricky thing. What you might try instead is to use your client newsletter to recommend services or products rather than your website.
If you are a service provider your service provider blog / website is NOT an affiliate website and you are not a blogger, you are a service provider. Your focus should be to highlight the services you offer. Each blog post should answer questions that a potential client may have about YOU and YOUR services.
If you are a service provider your service provider blog / website should not sell “HOW TO DO MY JOB YOURSELF” eBooks and reports. Instead, if you want to delve into teaching others how to do the service you are doing, start a separate website / blog for just that.
Potential clients want to know that you are serious. If they think you’re trying to be an affiliate marketer, or a guru in your field they are not going to hire you. A virtual assistant client relationship needs to be long term in order to best service your clients because in every situation there is a learning curve on both ends.
The client has to teach you what he or she needs, wants and expects, and you have to teach your clients your procedures. This takes time, if they think you’re going off to “greener” pastures by selling HOW TO eBooks they’re going to move on. So make sure your service provider website sticks to the message that you are available, that you can do xyz, and that you’re ready to work right now.
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