Let me add one more thing, because it is not clear if your wife is using this virtual assistant directly or through an agency.
If your wife normally pays for the virtual assistant through an agency, but made this direct tip to the assistant, then:
1. your wife does not have to issue a 1099-NEC to the assistant because the payment to the assistant was less than $600. You wife probably doesn't have to issue a 1099 to the agency, although she should request the agency give her a W-9 form which will identify what kind of business the agency is, so your wife can determine if a 1099 to the agency is required.
2. the direct tip to the assistant is still taxable income to the assistant, but it is not your wife's responsibility to follow up.
3. yes, it's still a business expense. Even if the virtual assistant is paid partly directly and mostly via the agency, it's all part of your wife's business expenses.
