[banakns]

Hi,
I am a student in US with F1 visa status. I started a website recently and put Google adsense and paypal donations. I have 2 urgent questions:

1. Is it legal to run a website that earns money throud ads with F1 status in USA?
2. Am I required to file a tax form for any sort of donations I receive?

I tried to Google about those questions but could not find any appropriate answer. Will someone help me figure this out?

Thanks in advance.

[AtlantaTaxExpert]

Banakns:

1) It is legal.

2) How much are we talking about?

[banakns]

First of all, thanks for such a quick response. I am feeling good now!

I have launched ny site obly for about a month.. I guess I will get about 100-150 on my first Google pay check.

Banakns:

1) It is legal.

2) How much are we talking about?

[AtlantaTaxExpert]

Banakns:

Despite the fact you call it "donations", the IRS considers them payments for products or services provided and therefore taxable income.

For this reason, you must track this income as well as the associated expenses. You pay taxes on the net (gross income minus allowable expenses).

Both the gross income and the expenses are reported on Schedule C. Track both carefully and keep good records. Report it honestly and pay the required taxes and you should have no problems with the IRS.

[banakns]

Thanks. I will keep records of everything. I have no problem paying taxes, I was just not sure if it is legal with F1 visa status. Thanks again. You are really nice and help me a lot!

[kot]

Hi!
I have the similar problem. I am on F-1 visa and want to sell jewelry made by me, just couple of samples. I found a site, some News letter for international student (//infohost.nmt.edu/~stuaffs/Intl/Newsletters/May2003.pdf), where they say self-employment is illegal for F-1. Though I remember I saw somewhere info that things like writing articles or books and getting money for that is legal. So I am confused.
1. What is consider to be a self-employment? Is a little bit of artistry is illegal?
2. If it is legal. How do I state it in my taxes?
Thank you

[AtlantaTaxExpert]

1) Self-employment is any activity where you earn a significant amount of money selling either products (such as jewelry) or services (such as tax preparation or consulting). Your activity may be technically illegal, but unless you are making a large profit (say anything in excess of $20,000), I would not worry about it.

2) If you make a profit (and even if you show a loss), it needs to be reported on Schedule C. There is a provision for Schedule C on Form 1040NR.

[kot]

Thank you, I see now

[simplysrujan]

On f-1 visa, you are eligible to open a C- corp and make checks payable to your corporation. However it is illegal to pull the money out for your personal use. YOu can spend the money for company use and write off taxes. YOu should be able to pull the money out once you get your green card.
PS: I'm not an expert but telling you what I know. PLease contact some experts to confirm.

[casha84]

Hi.
I have a small question about self employment on f visa too. I became a Beauty Consultant for Mary Kay. Is it illegal? Because it's a self employment, they wanted me to give them the tax number or #SS, but I didn't. The Mary Kay sent me a letter that unless I don't give them those numbers "the IRS requires that Mary Kay withold 28% of all my commissions, prizes and awards effective immediately". What should I do now?
Thank You in advance !

[AtlantaTaxExpert]

My original post is OVER three years old, and my outlook has been modified somewhat by research and consultation with other tax consultants.

Being a Mary Kay consultant is definitely self-employment (I have several tax clients who are Mary Kay consultants).

You should give the Mary Kay company your Social Security number (which should have been issued to you as part of the F-1 visa process).

However, being a Mary Kay consultant is also a definite violation of your F-1 visa, because such work is in no way part of your field of study (unless you perhaps are studying entrepeneurialship). However, given the general low levels of income earned while doing Mary Kay work, I doubt that the USCIS will notice or even care that much.

If you become a HUGE success in selling Mary Kay products (it DOES happen; it just has NOT happened with any of MY clients), then the USCIS may take notice and investigate further.

Regardless of what the USCIS does, the IRS will expect you to report the income and pay whatever taxes are due.

[azabunny]

I am on a F-2 visa, meaning a dependent of F-1 holder. I also want to do Mary Kay and DoTerra, an essential oil company. Am I forbidden to have any kind of income on this visa type? I'm not eligible for a social security number, but I have a tax identification number. Can I make some money?

[AtlantaTaxExpert]

Making money in that fashion is FORBIDDEN under your current visa.

If you do so, you risk having the visa revoked and being forced to return to your home country.

Sorry!