Virtual Assistant Financial and Legal Practices 2

Question 1

A US-based VA serving multiple clients is typically classified for tax purposes as what?

Accepted Answer

Independent contractor (1099)

Answer

Most freelance VAs work as independent contractors and receive 1099 forms rather than W-2s.

Question 2

Which IRS form does a US client send a VA who was paid $600 or more during the year?

Accepted Answer

1099-NEC

Answer

Form 1099-NEC reports nonemployee compensation of $600 or more to independent contractors.

Question 3

What document should a VA have a new client sign before starting paid work?

Accepted Answer

A signed contract or service agreement

Answer

A written service agreement defines scope, payment, and responsibilities, protecting both parties.

Question 4

An NDA primarily protects what in a VA-client relationship?

Accepted Answer

Confidential and proprietary information

Answer

A Non-Disclosure Agreement keeps confidential business information from being shared with others.

Question 5

As an independent contractor, a US VA is generally responsible for paying what tax that employers normally split?

Accepted Answer

Self-employment tax (Social Security and Medicare)

Answer

Self-employed individuals pay the full self-employment tax covering both employer and employee portions.

Virtual Assistant Practice Test