Can I hire a personal assistant as a 1099 contractor and deduct the expense?

12 So if I hire someone to help with both business and personal stuff, do I need to track their hours separately? Like keep a timesheet of when they're doing business vs personal tasks? Also, does it matter if I classify them as an employee vs contractor themselves?

7 Yes, you should definitely track their hours separately - maintaining a clear division between business and personal tasks is crucial for tax purposes. I recommend having them use a simple timesheet or time-tracking app that categorizes their work. This documentation will be extremely valuable if you're ever audited. Regarding classification, that's an important consideration too. If you control how and when they work, provide their equipment, and they work regularly for you, they might legally be considered your employee (requiring payroll taxes, etc.). If they work independently, set their own hours, and have multiple clients, they could be a contractor. The IRS looks at the entire relationship, not just how you classify them. Either way, you'd still only deduct the business-related portion of their work.

9 Did they help with figuring out if you should classify them as an employee or contractor? That's the part that confuses me. Also, did they give advice about what percentage of assistant time is typically deductible or is it really case-by-case?

18 I'm a bit skeptical about these services... how much did it cost? And couldn't you get the same advice from a regular CPA? I'm wondering if it's worth it for something relatively straightforward like assistant expenses.

15 They absolutely helped with the classification question - they have a whole assessment that looks at your specific situation and helps determine whether your assistant should be an employee or contractor based on IRS guidelines. It saved me from making a costly misclassification mistake. As for percentages, they don't use a standard percentage because the IRS wouldn't accept that approach. They helped me create a system to properly document and track actual business use, which is what's required. Every situation is different depending on your business needs.

20 Wait, how does this actually work? They just call the IRS for you? Seems weird they could get through when no one else can. What's the catch?

18 I don't believe this works. I've tried EVERYTHING to get through to the IRS and sometimes waited on hold for 2+ hours only to get disconnected. There's no way some service can magically get through when millions of people can't even reach a human. Sounds like a scam to me.

5 It's not that they have a special "in" with the IRS - they use technology to wait on hold for you. Their system navigates the phone tree and waits in the queue. When they finally connect with a human agent, that's when they call you and connect you directly to that agent who's already on the line. No more waiting on hold for hours! It worked perfectly for me. I submitted my request in the morning, went about my day, and got a call when they had an agent on the line. The whole point is that most people can't sit on hold for hours during a workday, so their service handles that part for you.

17 Wouldn't that be more expensive though? Hiring two different people instead of just one person who can handle everything? How much are you typically paying your business assistant if you don't mind sharing?

3 It is slightly more expensive upfront, but potentially less expensive in the long run when you consider tax benefits and avoiding potential audit issues. My business assistant costs me about $25/hour for approximately 10 hours per week handling client communication, invoicing, scheduling, and file organization - all 100% deductible business expenses. For personal errands, I use TaskRabbit or similar services only when needed - maybe 2-3 hours per week at similar rates. Since I'm only paying for personal help when absolutely necessary, it actually isn't that much more expensive overall, and the peace of mind at tax time is worth it. Plus, the business assistant's contribution to my productivity allows me to take on more clients, more than covering the cost.

22 I use QuickBooks Self-Employed and it works pretty well. You can create a custom category for assistant expenses and then tag each expense with a note about whether it was business or personal. I also use the mileage tracker feature when my assistant runs business errands. The reports make it easy to show the business percentage at tax time.

This is really solid advice! I'm curious about the separate payment structure you mentioned - do you literally pay them twice (once for business tasks, once for personal) or do you just track the hours differently but pay in one lump sum? Also, how detailed do you get with the task descriptions? Like if they're organizing files, do you specify that it's "organizing client contracts" vs just "organizing files"? I'm trying to set this up properly from the start rather than trying to fix it later during tax season. The classification issue is definitely something I need to figure out too - sounds like there's more to it than just calling someone a contractor.

Great question! I actually do pay them separately - I have two different "invoices" essentially. One for business tasks (which I track for tax deductions) and one for personal tasks (which comes out of my personal funds). This creates a clean paper trail that clearly shows the business vs personal split. For task descriptions, I get pretty specific. Instead of just "organizing files," I'll note "organizing client contracts for 2024 tax year" or "filing business receipts by category." The key is showing how each task directly supports my business operations or income generation. You're absolutely right about the classification issue - it's more complex than just the payment method. The IRS looks at factors like: Do you set their schedule? Do you provide equipment/workspace? Do they work for other clients? Do you control HOW they do the work vs just WHAT work needs done? If you answered yes to most of these, they might legally be your employee even if you pay them as a contractor. Getting it right from the start is definitely the smart move. Consider consulting with a tax professional early on - it's much cheaper than dealing with misclassification penalties later!

This is incredibly helpful! The written agreement angle is something I hadn't considered but makes total sense. It sounds like having everything documented upfront could save a lot of headaches later. I'm particularly interested in the home office aspect you mentioned. I do work from home and have a dedicated office space that I use for client calls and business operations. If my assistant helps organize that space or maintain business equipment there, that seems like it would have a pretty clear business connection. Do you have any templates or examples of what should be included in that written agreement? I want to make sure I cover all the important points about task categorization and documentation requirements. Also, for the business travel coordination piece - would that include things like booking flights for client meetings or research trips, or are you thinking more broadly about travel-related support? I really appreciate the emphasis on showing direct contribution to income generation. That framework makes it much clearer how to evaluate whether a specific task would be deductible or not.

You're absolutely right about getting the written agreement in place! For templates, I'd recommend checking with your state's small business development center - they often have contractor agreement templates that include the specific language needed for task categorization. You'll want sections covering scope of work (with clear business vs personal task examples), payment terms for each category, confidentiality clauses for business information, and documentation requirements. For travel coordination, I mean both - booking flights for client meetings definitely counts, but also broader support like researching client locations, coordinating schedules across time zones, managing travel expense tracking, etc. Anything that directly supports your client relationships or business operations. The home office angle is really solid in your case. Tasks like organizing your business filing system, setting up technology for video calls, maintaining your professional workspace, or even coordinating deliveries of business supplies to your office would all have clear business purposes. One more tip: consider having your assistant help with client onboarding processes, managing your business calendar, or handling initial client communications. These activities have obvious income generation connections that would be hard for the IRS to question. Just make sure every task ties back to "this helps me serve clients better" or "this allows me to take on more billable work.

This is excellent insight about the percentage test and measurable business value! I hadn't considered that the IRS would look beyond just time allocation to actual business outcomes. That makes total sense though - they want to see real business justification, not just arbitrary categorizations. Your point about documenting metrics is particularly valuable. I'm thinking I should start tracking things like how many additional client hours I can bill when my assistant handles administrative tasks, or how much faster I can respond to new client inquiries when they're managing my calendar. Having those concrete numbers would definitely strengthen the business case. The 1099 requirement is something I need to make sure I understand correctly too. If I'm paying them for both business and personal tasks, do I only issue a 1099 for the business portion that exceeds $600, or does the total payment (business + personal) need to be considered? I want to make sure I'm compliant with all the reporting requirements from the start. This whole thread has been incredibly helpful for thinking through all the nuances involved. It's clearly more complex than just "hire someone and deduct the cost" - there's a lot of documentation and strategic thinking required to do it properly.

Great question about the 1099 reporting! You only need to issue a 1099 for the business portion of payments that exceeds $600 in a tax year. So if you pay your assistant $1,200 total but only $700 was for business tasks, you'd issue a 1099 for the $700 business amount. The personal payments don't factor into the 1099 threshold since those aren't business expenses anyway. This is actually another reason why keeping separate payment records is so important - it makes the 1099 reporting straightforward and creates clean documentation for your deductions. I'd recommend setting up a simple spreadsheet to track business vs personal payments throughout the year so you're not scrambling to figure it out in January. Your idea about tracking billable hours gained and response time improvements is spot-on. I'd also suggest documenting any new clients you're able to take on because you have administrative support, or any client retention improvements due to better service. The IRS loves to see quantifiable business impact, and this kind of documentation makes your deduction bulletproof. One more metric to consider tracking: time saved on administrative tasks that you can directly convert to revenue-generating activities. If your assistant saves you 5 hours per week on admin work and you bill those hours to clients instead, that's measurable ROI that clearly justifies the expense.

You've really captured the essential points perfectly! Starting with a business-only assistant is a smart approach - it eliminates any gray areas and lets you focus on documenting clear business benefits. For time-tracking, I've had good success with Toggl and Clockify - both let you create detailed project categories and add notes for each time entry. The key is being specific with task descriptions (like "client onboarding for Smith account" rather than just "admin work"). Some people also like Harvest since it integrates well with invoicing systems. For documentation beyond time tracking, I'd recommend a simple shared Google Sheet or Airtable base where your assistant can log daily activities with business impact notes. Something like: Date | Task | Time Spent | Business Purpose | Client/Revenue Impact. This creates the narrative the IRS wants to see about how each task contributes to income generation. One thing to consider as you get started - have your assistant help with client follow-ups and relationship maintenance. These activities have obvious business value and can often lead to additional work or referrals, giving you concrete metrics to track. Good luck with getting this set up - sounds like you're approaching it exactly the right way!

That's a really important point about confidentiality agreements that I hadn't thought of! As someone just getting into this, I'm realizing there are so many layers to consider beyond just the basic tax deduction question. Your point about client confidentiality actually raises another question for me - if my assistant needs access to client information to do their job effectively (like managing my calendar or handling initial client communications), does that create any additional documentation I should keep for tax purposes? Like showing that access to confidential information was necessary for legitimate business functions? I'm also curious about your comment on the record-keeping not being that complex once you have a system. Did you start with something simple and build up, or did you set up a comprehensive tracking system from day one? I'm trying to balance being thorough with not making this so complicated that I spend more time on admin than the assistant saves me! The peace of mind aspect is definitely appealing. I'd rather put in the effort upfront to do this right than worry about it during tax season or potentially face issues later.