F1 Student Co-op on 1099 is eligible work ? Is it illigal??

Hi,
I am f1 Student in Louisiana, I am working 4m 2 weeks in small company on CO-op(cpt). I am asking same question you answered many times, bt I want to make sure I am doing right.

University internationa service issed me a new I20 to able to work in that company as an intern, My empleyer , he is going pay me 2000$ month with out cutting any taxes, and he said I am going to get an 1099 tax form at end of tha year.

I found mixxed results in internet , this going to give problems in future while filing H1 visa.

Am I eligible to worlk???? Is it giv any problem in the future(H1)???

Can any one explain me Y / Y not ????

If am eligible to work, can any 1 explanin me process for tax filing?/

And 1 more thing, on 2009 tax filling I filled wrong 1040 form as a US citizen, and I realized it this year 2010 I amended that form an reapplied
1040NR_EZ. And this yr 2010 i forget to file state taxes as a non resident, What can I do now, Is it goin to giv any problem in future (H1) toooo????

Tax-wise, it is irrelevent whether you work under a W-2 or under a 1099, because you are exempt from either FICA (Social Security and Medicare) taxes or the 1099-equivalent self-employment tax.

If you work under a Form 1099, you would file Form 1040NR with a Schedule C (but NOT Schedule SE).

Visa-wise, it is a technical violation of your visa to work under a 1099, but the practice is so common that most universities do not challenge the practice and, given that there are NO adverse tax consequences, I submit that they should NOT challenge it. After all, which is best: challenge the practice and lose the employment opportunity for the student, or allow it and give the student a chance to get the work experience for which CPT and OPT were designed. The violation is so small in the eyes of the USCIS that they do not even bother to investigate, and it will NOT have any effect on your H-1 application.

BOTTOM LINE: If you are offered a CPT position under Form 1099, TAKE IT. You will need to save about 25% of each paycheck so you have the money to pay the taxes when you file both the federal and state income tax.