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madasty · Sep 4, 2010, 01:12 PM

Hi,
I am on H1B right now and my employer is about to apply for my 3rd term h1B renewal. The problem is, last year my client gave me a bonus of $2200/- and in the end of the year he gave me 1099 form. I filed taxes along with my regular W2 [from my employer] and 1099 [from my client]. Is this going to be any problem for my H1 renewal?

Please help me.
Regards.

wnhough · Sep 4, 2010, 05:30 PM

QUOTE," The problem is, last year my client gave me a bonus of $2200/- and in the end of the year he gave me 1099 form. "---In principle, as you know, as a H1B visal holder, to work for someone who is not your H1B sponsor is ILLEGAL. However, I bet you do not need to worry about too much legal isssue; unless the amount of income that you earned from your client is substantial(i.e. >$10,000), the IRS doesn't get excited on the issue.
" I filed taxes along with my regular W2 [from my employer] and 1099 [from my client]."---You should report the incoem on sch C and sch SE and can deduct all necessary expenses associated with genrating the incoem of $2,200. You also need to pay your own SECA taxes; 12.4% for SST and H.I.taxes2.9% on the net income(92.35% of your net income if > $400).

madasty · Sep 4, 2010, 06:00 PM

Thank you very much for your reply. And yes, when I did my tax returns, I went to H&R Block and I remember they reported 2200/- under section C and SE. But not sure about SECA taxes, I will check that now.

Once again, thank you for taking your time and answering my question.

Regards.

wnhough · Sep 4, 2010, 06:28 PM

QUOTE," But not sure about SECA taxes, I will check that now.
"---Basically, you don't have to worry about paying the SECA tax at all if your net business income( 92.35% of your total net self-employment income) , from your Schedule C, is less than $400.
But if your net business income is $400 or more, you must file a Schedule SE and pay SECA tax on your net business income, including the first $400. As you can see, the 1099-misc income, $2,200, is treated as self-employed income (even if you are a regular employee in lieu of bein' a H1B visa holder).