[prashcan]

Hi,

My current employer has a small company. It is an animation studio in Los Angeles with a size of 3 (including employer himself). I have been working for the company on H1B work visa since 2008 and prior to that on my OPT.

My employer has been paying me monthly salary without any deductions. This is so because all other employees are freelancers or independent contractors and maintaining tax withholdings on W2 only for me alone would be difficult for my employer.

Can I do my tax returns on 1099 basis? Would it be appropriate for me to do so or is it necessary to file taxes on W4 only? I have only been receiving pay checks from my current H1B employer.

Any help on this topic would be much appreciated. Thanks.

- Prash

[AtlantaTaxExpert]

Prash:

You should point out to your employer that paying you as an independent contractor is a violation of your visa on his part!

The USCIS will not hold you responsible for this violation, and, in all likelihood, will not press your employer for this violation either, though it does NOT change the fact that he IS violating the visa provisions.

That said, you have no choice but to file Schedules C and SE if he does not change your status to that of an employee. If no taxes have been withheld, expect to write a significant check when you file your 2009 tax return, as you will owe self-employment tax at a 15.3% tax rate, PLUS whatever federal income taxes will be due.