John Jonas shares how he hires virtual assistants in the Philippines as subcontractors, keeps a signed W-8 BEN on file, and skips contracts because he finds them rarely necessary. He's been doing this since 2005 and stresses consulting a tax professional or lawyer for your situation.
Questions this video answers
2005.
W-8 BEN.
No; the speaker says they do not require a 1099.
Subcontractors (reported as subcontractor expenses).
Chapters
What's up, guys? This is John Jonas, and today I'm talking about taxes, contracts, and employees with virtual assistants in the Philippines. I got this funny thing on my nose. I'm trying to learn how to breathe out of my nose. It's not easy. We're skinning up a trail in big cottonwood canyon outside of Salt Lake City, and we're probably gonna ski right back down this track because avalanche danger is just too sketchy right now. So we'll just ski back down the low angle stuff that we came up. Not the funnest, but it's an adventure. So let's talk about taxes. First, the disclaimer. I'm not an accountant. I'm not an attorney. You should not listen to my advice. You should definitely talk to your accountant or your tax attorney. I've been hiring virtual assistants in the Philippines since 2005, and every year on my taxes, we do the same thing. The accountant marks them all of the expense of their salaries or whatever I have with them as subcontractors. Because they're in the Philippines, they don't need a 1099. They don't get a 1099. So outside of the line item on my taxes of subcontractors, there's no other tax reporting. I don't do anything for them in the Philippines. I don't report to their government. I don't report to mine. That's the end of it. Now, there is one form you probably want to get. It's called the W8 Ben. And all it does, it says, I'm a foreign national. I don't. I don't have responsibilities to you. So if you want to have them sign that and take a picture of it and send it to you, or scan it and send it to you, you keep it for your records. You'll never file it with the government. You'll never do anything with it. Just keep it, and that's it. Now let's talk about employees. Are they considered an employee or a subcontractor? So they're overseas. They're in their own workspace. They're using their own computer. You may give them instructions, but they're on their own. I hope you can hear this because it's getting windy out here. In every way, they're a subcontractor, not an employee. Even if they work 40 hours a week, they're still a subcontractor. Again, don't listen to my advice. Listen to your tax attorney or your accountant or your CPA. Next, let's talk about contracts and non disclosure agreements. NDAs. So I don't use a contract with my people. I have one that I've created. I don't use it partly because I'm lazy, partly because I've never found it helpful. It's not enforceable. I'm not gonna go to the Philippines to enforce something. I'm not gonna go there and try and track them down to try and enforce something. Your situation may be different, but I don't use a contract. But if you want to use one, perfectly fine. We have an example contract that you can get as an add on to the 1 VAOA program. You buy the 1 VAOA program, then I'll give you an offer of that contract along with a bunch of other good documents that you can use. Non disclosure agreements, same thing. How to use it? Never have never found a need. I can't say that it would be very effective. You'd have a hard time prosecuting that in the Philippines. Along these lines. The Philippines is a super compliant country. Like they don't want to violate a contract. They don't want to steal your data. They don't want to violate an NDA. They just don't want to do it. Contracts are no contract. They don't want to hurt you. I've been doing this since 2005. I've seen hundreds of thousands of people hire virtual assistants. And yeah, we've seen problems. Usually it's the employer's fault, not the workers. The worker doesn't want to screw you most of the time. Yeah. There's the 0.1%. It's rare though. So to sum it up in taxes, they're a subcontractor. You have no other responsibilities in contracts. I don't use them. NDAs. I don't use them. As far as employment, they are not an employee and you don't have any employment, taxes or responsibilities. Oh boy. This gets, this gets tricky. And for your taxes, it goes on your taxes as a subcontractor. What else did I talk about? Addie, if you have questions, send me an email. I'll answer your email. I'll probably send you a link to something that I've already written about it. Johnnlinejobs PH Go for it. Or you can email our support people. Supportnlinejobs ph I answer all these questions in my book. It's 100 pages. It'll take you two hours to read. It's super simple. Altruistinglever.com where I will answer every question that you have. And if I don't answer it. Then you're going to ask me and I'll answer your questions so you can hire a great virtual assistant. We made it to Dog Lake. I guess we've gone two and a quarter miles. And there it is. How you doing, Addy? Great, Sam.
