Virtual Assistant Taxes in Virginia - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for a Virtual Assistant in Virginia

The Commonwealth of Virginia offers a thriving environment for independent professionals, and virtual assistants are a growing part of that landscape. Successfully navigating the tax implications of self-employment is crucial for any VA operating within the state.

As a virtual assistant, income earned is considered self-employment income, requiring reporting on Schedule C (Profit or Loss from Business) with your federal income tax return (Form 1040). Crucially, earnings exceeding $400 necessitate the payment of self-employment taxes, covering both Social Security and Medicare contributions. Maintaining meticulous records of income and expenses is paramount for accurate tax filing.

How Virginia Handles Gig Worker Taxes

Virginia, as a state with a graduated income tax system, requires all residents with self-employment income to file a state income tax return. Even if federal income is below the filing threshold, Virginia may require a return if state income exceeds certain limits. Virginia’s tax year follows the federal tax year, concluding on December 31st. The primary form for self-employed individuals to report income and calculate Virginia income tax liability is Form 540, the Virginia Individual Income Tax Return.

Virginia’s income tax rates are progressive, meaning the rate increases as income increases. For the 2025 tax year (filing in 2026), these rates are expected to remain similar to prior years, but it’s essential to consult the Virginia Department of Taxation website for the most up-to-date information. In addition to income tax, Virginia does not have a local income tax, simplifying the filing process. However, Virginia does require estimated tax payments if your tax liability is expected to be $1,000 or more. These payments are typically made quarterly to avoid penalties. Failure to pay estimated taxes can result in underpayment penalties, so careful planning is essential. Resources and information regarding Virginia state taxes can be found on the Virginia Department of Taxation website: https://www.tax.virginia.gov/

Key Tax Deductions for Home-Based Virtual Assistants

• Home Office Deduction: The home office deduction allows for the deduction of expenses related to the portion of your home exclusively and regularly used for business. “Exclusive use” means that space is only used for your VA work. “Regular use” means that you use it consistently for your business. 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, 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. Accurate record-keeping of business usage is crucial to substantiate this deduction.

Note on Mileage: As a predominantly home-based worker, mileage deductions may be limited. However, any travel directly related to client meetings, attending industry events, or procuring business supplies can be claimed using the standard mileage rate or actual expenses.

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 working for a traditional employer. You are responsible for paying both portions as a self-employed individual.