Hello all,

I have a quick question regarding potential 'extra' money under a H1-B visa:

What is the category of income for Herbalife's "royalty" checks?
We are a couple living in the US on a H1-B and H4 visa respectively.
We are using herbalife products, are currently "distributors", and have some friends who would like to "sign up" under us.

Under our visas, we are not allowed to receive any income from trade other than from the current employer of the H1-B holder.

We understood that Herbalife sends to supervisors "royalty checks" based upon the activity of the persons signed up under them.

Are these checks considered regular income from trade for tax purposes or are they 'royalty' income for tax purposes?

In other words, do our visas allow us to receive periodic checks from Herbalife? Or, for those of you who do receive such checks, what type of income do these amounts fall into?:confused: :confused:

Thank you for your much appreciated help.

It depends upon how Herbalife reports this payment. Most probably, they will issue you 1099-misc, which is income as self employer or independent contractor.

How you will treat the 1099-Misc income, read: Your U.S. Tax Return: W2 vs 1099-Misc: Employee vs Independent Contractor. (http://taxipay.blogspot.com/2008/03/w2-or-1099-employee-or-independent.html)