I am H1B visa holder and made about $2000 on eBay before I realized it is not legal to have other income under H1B.

I stopped immediately, but the question is how to correct this honest mistake. I have no problem with reporting this income to IRS and pay tax, but I am afraid once it shows on my tax records it may cause a bigger problem with my upcoming green card application.

Can I just donate the money to a charity, so that technically I do not make a profit, then will it be okay not to report this income to IRS? Of course I am not going to claim tax credit on the donation.

Thanks in advance for your help!

1. You must declare this income on your tax return. This is income as self employed. You will report your income and expenses on schedule C or C-EZ (Form 1040). This income is subject to SE tax at 15.3%. Read: Your U.S. Tax Return: Tax Filing by Self Employed Sole Proprietor or Independent Contractor (http://taxipay.blogspot.com/2008/04/tax-filing-by-self-employed-sole.html)

2. Do what ever you want do with this money, you must declare it. If this is your only deduction as charity, you will not get any deduction.

3. IRS is more concerned about your filing correct tax return than any other work.

Thanks MukatA!

Agreed; claim the income on your tax return and drive on. It is, at most, a minor violation of your visa, one that the USCIS will not even bother with unless they see a pattern ofabuse.

AtlantaTaxExpert, thank you as well for your response!

Glad to help!