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-   -   Residency problem again... And 1099 problems (https://www.askmehelpdesk.com/showthread.php?t=467658)

  • Apr 28, 2010, 08:27 AM
    mlk2009
    Residency problem again... and 1099 problems
    1. First question is residency problem

    I've been in the States for 8+ years (first 2 yrs been J-2 and later been F-1, I changed F-1 status when I went from college to grad school) . When I filed tax return this year I used Form1040, because a friend of mine (also F-1 for 5+ yrs) went to a lawyer and they filed Form 1040 instead of 1040NR, so I did the same. It's also my first yr to file tax return because previously I don't have income as undergrad.

    But upon recent research I figured out IRS says exempt individual (F, J, M, or Q visa ) doesn't count (Tax Topics - Topic 851 Resident and Non-Resident Aliens). This is conflicting with my current knowledge in terms of residency (IRS definition, of course).

    Well I checked through IRS and it says tax return check will be sent by the end of this month, so I think there's nothing wrong when my tax return but still I'd like to know how should I determine my (IRS )residency status so next yr I'll be sure to file the right one.

    2. 2nd question is 1099 individual contractor problem.
    I sold some works on a 3D website last year and earned royalty for 10+ K, because I didn't send them my tax information so I didn't receive and payment last year.

    By this month the royalty summed up to 30+ K and I wonder if I can claim the money. I know they will send out 1099 forms next yr once I send them tax info. But I'm not sure if it's conflicting with any tax laws.

    Also I'm not sure if individual contractor counts as employed?

    Thank you.
  • Apr 28, 2010, 10:13 AM
    AtlantaTaxExpert
    You ARE a resident alien for tax purposes, because the F-1 exemption is good for only five years, so filing Form 1040 is fine.

    The individual contractor work IS a technical violation of your visa, though you could argue that, since the income is Internet-based, you could easily have earned the income in your home country.

    Regardless, you WILL owe taxes on this money once you receive it and get the Form 1099-MISC. You will need to file a Schedule C and SE to pay both income and self-employment taxes. Since $30K is a significant sume of money, expect a tax bill of at least $10,000. Once you get the money, you need to make an estimated tax payment using Form 1040-ES.

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