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nt_confused · Jan 22, 2008, 09:13 PM

Hi,
Here is my situation

1) I've been on J1 since 1999
2) I've been filing 1040 for 3-4 years now since I think I am now an alien resident for tax purpose
3) I always worked in school and got W2 and no problem with tax

4) Last year, I mistakenly worked for a website as an independent contractor (an online tutor). I thought it was OK since I am not their employee. Then I somehow talked to my school and they said I shouldn't work outside school no matter whether I am an independent contractor or not. So I quited immediately. The website sent me a 1099-MISC and report on box 7 that I got $176.82 nonemployee compensation for what I worked with them before I found out I shouldn't have worked with them.

I guess I should file it, right? Both with IRS and PA?
Is this going to affect my visa status or it doesn't matter?

Thanks.

MukatA · Jan 23, 2008, 10:51 AM

IRS and your Visa status are two different issues.

As far as IRS is concerned you must report your 1099-MISC income, otherwise chances are very high that you will get a letter from IRS, may be after one or two years. To report 1099-MISC income, you will file schedule C (Form 1040). This income is subject to 15.3% SE tax. For this you will file schedule SE (Form 1040).

nt_confused · Jan 23, 2008, 12:52 PM

I see. So I have to file that with IRS.
Since I use the tax software online, it has already filled in the schedule C and schedule SE for me.

Thank you so much for this clarification.

Another question is that will IRS reports this kind of situation to the immigration office? If they will, I want to prepare for it; I know I have to be responsible for my mistake. But if they will not, I can breathe much better and I know I have to be very very careful next time I do things in this country.

AtlantaTaxExpert · Jan 23, 2008, 09:24 PM

As far as the IRS is concerned, you are a resident alien and have been since 2001.

I suspect that the USCIS/ICE will NOT really care about your 1099 job because you have been in the country for so long.

nt_confused · Jan 24, 2008, 08:58 AM

Oh~ Thank you so much everyone :) I really appreciate your help :)

AtlantaTaxExpert · Jan 24, 2008, 10:11 AM

Further, with only $176 on the Form 1099-MISC, you can find AT LEAST that many expenses to claim on the Schedule C to completely offset any taxs owed.

nt_confused · Jan 24, 2008, 10:23 AM

Oh I see.

I did the Schedule SE and it says that if the self-employment income is less than $400, I don't owe any self-employment tax and do not have to submit Schedule SE. The 1099-MISC with $176.82 is the only 1099-MISC form I get. So I do not have to pay the self-employment tax, right?

Moreover, my adjusted gross income was far less than deduction + exemption. So it's the case that I do not owe IRS any tax last year. (Well, I am just a student working part-time to get some extra savings.)

Thank you so much again for your help :)

AtlantaTaxExpert · Jan 24, 2008, 10:47 AM

That is correct; no SE tax is due.

If your personal exemption and standard deduction covers this extra $176, then just enter it as the amount received on the Schedule C and file it. The IRS will not even look twice at your return.