Virtual Assistant Taxes in Arkansas - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for a Virtual Assistant in Arkansas

The Natural State offers a growing landscape for remote professionals, and virtual assistants are increasingly vital to Arkansas businesses. Successfully navigating the tax implications of self-employment is crucial for any Arkansas-based VA.

As a virtual assistant operating in Arkansas, all income earned through self-employment must be reported to the IRS. This is typically done using Schedule C (Profit or Loss from Business) attached to your Form 1040. Furthermore, earnings exceeding $400 necessitate the payment of self-employment taxes, covering both Social Security and Medicare contributions.

How Arkansas Handles Gig Worker Taxes

As a resident of Arkansas, a state income tax return is generally required, even if federal taxes have been withheld. Arkansas utilizes a graduated income tax system, meaning the tax rate increases as your income rises. For the 2025 tax year, Arkansas residents filing as self-employed individuals will primarily use Form AR1040 and Schedule IN (Income). The Arkansas Department of Finance and Administration provides detailed instructions and forms on their website: Arkansas Department of Finance and Administration.

Arkansas’s tax brackets for 2025 (based on current projections and historical trends) are expected to range from 0% to 5.9% depending on your filing status and income level. It’s important to consult the official Arkansas tax forms and instructions when they become available for the 2025 tax year to confirm the exact brackets. Estimated tax payments are generally required quarterly if you anticipate owing $1,000 or more in Arkansas income tax. Failure to make timely estimated payments can result in penalties. Arkansas also allows for certain credits and deductions that may reduce your overall tax liability, such as those related to education or charitable contributions. Keep meticulous records of all income and expenses to accurately calculate your Arkansas tax obligations.

Key Tax Deductions for Home-Based Virtual Assistants

• Home Office Deduction: To qualify for the home office deduction, the space must be used exclusively and regularly for business. “Exclusive use” means that portion of your home is used solely for your virtual assistant work – it cannot double as a guest room or family space. “Regular use” implies consistent and ongoing use for business purposes. You can calculate the deduction using the simplified method ($5 per square foot, up to 300 square feet) or the actual expense method (calculating a percentage of your mortgage/rent, utilities, etc., based on the square footage used for business).
• Hardware & Software: The cost of essential hardware, such as computers, webcams, and printers, is generally deductible. Software subscriptions vital to your business, including programs like Adobe Creative Cloud, project management tools, and website hosting fees, are also deductible expenses.
• Internet & Phone Bill: If you use your internet and phone for both personal and business purposes, you can deduct the percentage attributable to business use. Carefully track your usage to justify the deduction if audited.

Note on Mileage: As a predominantly home-based worker, mileage deductions are less common. However, you can claim mileage for any trips taken specifically for client meetings, attending industry events, or other work-related errands. Keep a detailed mileage log.

The 15.3% Self-Employment Tax Explained

The 15.3% self-employment tax comprises two components: 12.4% for Social Security and 2.9% for Medicare. This tax is essentially the equivalent of the employer and employee portions of these taxes when you are traditionally employed. You receive credit for one-half of the self-employment tax on your Form 1040.