Virtual Assistant Taxes in Washington - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for a Virtual Assistant in Washington

The Evergreen State offers a thriving environment for Virtual Assistants, providing access to a diverse client base and a strong entrepreneurial spirit. However, navigating the tax landscape as a self-employed professional requires careful planning and organization.

As a Virtual Assistant, income earned is considered self-employment income and must be reported to the IRS on Schedule C (Profit or Loss from Business) when filing your federal tax return. Crucially, this income is also subject to self-employment tax, covering both Social Security and Medicare contributions. Accurate record-keeping throughout the year is essential for maximizing deductions and ensuring compliance.

How Washington Handles Gig Worker Taxes

Washington is unique among US states for not imposing a personal income tax. However, this doesn’t mean gig workers are exempt from all state taxes. Washington levies a Business & Occupation (B&O) tax, a gross receipts tax applied to the gross income of a business, regardless of profitability. For most Virtual Assistants starting out, annual gross income will likely fall below the threshold requiring B&O tax payment. As of 2024, the small business B&O tax rate is 0.471% for most service businesses. However, it’s vital to monitor income and understand the reporting requirements. Even if no tax is due, filing may be necessary. The Washington State Department of Revenue provides comprehensive information and resources for businesses, including those operating as independent contractors. It’s recommended to regularly check their website for updates to rates and regulations. Failure to comply with B&O tax requirements, even if no tax is owed, can result in penalties. Understanding these nuances is key to remaining compliant as a self-employed professional in Washington.

You can find more information at the Washington State Department of Revenue.

Key Tax Deductions for Home-Based Virtual Assistants

• Home Office Deduction: The home office deduction allows Virtual Assistants to deduct expenses related to the portion of their home exclusively and regularly used for business. “Exclusive use” means that space is only used for work; a dining room table used for both meals and client calls doesn’t qualify. “Regular use” means consistent, ongoing use for business purposes. Two methods exist: the simplified option, which allows a deduction of $5 per square foot of the home used for business, up to a maximum of 300 square feet; and the actual expense method, which requires calculating the percentage of the home used for business and deducting a proportionate share of mortgage interest, rent, utilities, and other related expenses.
• 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 business expenses.
• Internet & Phone Bill: If your internet and phone are used for both personal and business purposes, you can deduct the percentage attributable to business use. Maintaining a detailed log of business-related usage is crucial to substantiate this deduction.

Note on Mileage: As a predominantly home-based worker, mileage deductions are less common for Virtual Assistants. However, any travel directly related to business – such as occasional client meetings or trips to purchase 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 is comprised of two components: 12.4% for Social Security and 2.9% for Medicare. This tax is essentially the equivalent of the Social Security and Medicare taxes withheld from an employee’s paycheck. It’s calculated on your net earnings – your business income minus allowable business deductions – exceeding $400. Remember to factor this significant tax liability into your overall financial planning.