I started working for the new employer in 3rd week of November 2007. And my H1-B transfer is still in process - ie. status pending. My previous employer did not pay me for the last 2 weeks, untill Jan 2008. He sent me check for $2000 (from company's name). He says that he will issue me a 1099. So my question is is it leagal to accept it? will it cause any problem for me in future? how can I file my taxes if I get a 1099?

Thanks in advance.

Vivek

Vivek:

YOU really do not have a choice in the matter.

If you get paid under a W-2, you can file a normal tax return (Form 1040NR-EZ).

If you get paid under a Form 1099, you have to file a Schedule C (but NOT Schedule SE because you have not yet converted to H-1B) with Form 1040NR.

Working under Form 1099 is a technical violation of BOTH your F-1 and H-1B visa IMHO. However, YOU DID NOT COMMIT THIS VIOLATION!!

Your employer committed it.

Do not worry about it; the IRS does not care about your visa status. Their only concern is the payment of the taxes.

In my opinion, if ICE/USCIS is concerned about this violation, they will go after the employer, NOT YOU.

Thanks for your quick answer ATE.

Glad to help!