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    F1 visa student - self employment- 1099 tax form

    Asked Sep 11, 2006, 03:58 PM 13 Answers
    I am a phd international student in Houston Texas. I am a citizen of Tunisia.
    I joined the program in fall 2005 and I am on campus employee. I am starting my second year now.
    I am filling W2 form for tax. I have an opportunity to gain extra income as self employed or independent contractor from an online job. They are saying they will send me my check by mail and that I need to fill out at the end of the year a 1099 misc form for tax.
    My question is : Do I have the legal wright to take this "job" (independent contractor) or shall it be a violation of my F1 visa status. Does filling the 1099 form with my W2 will cause any problem? If not how much should I pay for taxes..
    Looking forward to your response. If any information is missing please let me know.
    Thanks in advance for your help.
    Regards

    Last edited by subsab; Sep 12, 2006 at 02:43 PM.
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    13 Answers
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,657, Reputation: 841
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    #2

    Sep 12, 2006, 06:35 PM


    A lot depends on how much you make as an independent contractor AND what your deductible expenses would be. If the amount is relatively small, then it would probably not be a problem.

    I recently prepared a return for another student just like you. My research indicated no violation for working as an independent contractor.
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    taxsearcher's Avatar
    taxsearcher Posts: 222, Reputation: 8
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    #3

    Sep 13, 2006, 05:46 AM
    This is not really a tax question but a question about your immigration status. An F1 visa does not allow you to take off campus employment anywhere or anytime you want. You can only take employment under specific circumstances, such as through OPT or CPT and there are hardship provisions too.

    But generally, an F1 student cannot simply go out and find employment. This is illegal. I would encourage you not to do this because it is a violation of your status.

    You should contact your university's international office to talk about this. Here's something from U of Houston's international office FAQs:


    "Is it true that during the summer I can work anywhere and do not need to obtain special permission?
    This is FALSE! If you are in legal full-time F-1 status, you may work anywhere on-campus during the summer (full-time or part-time) but off-campus employment ALWAYS requires special permission from DHS or ISSSO."

    Good luck with your situation.
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    subsab's Avatar
    subsab Posts: 3, Reputation: 1
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    #4

    Sep 13, 2006, 12:29 PM
    I appreciate your help.
    Thanks
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    subsab's Avatar
    subsab Posts: 3, Reputation: 1
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    #5

    Sep 13, 2006, 12:30 PM
    Appreciate it also Taxsearcher.
    Thanks for advice.
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    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,657, Reputation: 841
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    #6

    Sep 15, 2006, 04:40 PM


    TaxSearcher's word is GOLD!
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    rajeshekara's Avatar
    rajeshekara Posts: 1, Reputation: 1
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    #7

    Dec 12, 2007, 07:52 PM
    I guess the tax searcher can answer my question. But, anyway this question can be answered by anbody. So, here is my question.

    I'm currently on F1 Visa and I got the opportunity to work using my CPT. As you know, if I work directly to any company as a CPT holder, I would get a very less pay per hour. Instead, can I work on 1099 as I get more paid for the same job I'm seeking for.


    The company pays

    $55 if worked using 1099

    OR

    $25 if worked on CPT

    So, can I go for 1099..?

    I desparately need your suggestion.

    Thanks
    Raj


    Quote Originally Posted by taxsearcher
    This is not really a tax question but a question about your immigration status. An F1 visa does not allow you to take off campus employment anywhere or anytime you want. You can only take employment under specific circumstances, such as through OPT or CPT and there are hardship provisions too.

    But generally, an F1 student cannot simply go out and find employment. This is illegal. I would encourage you not to do this because it is a violation of your status.

    You should contact your university's international office to talk about this. Here's something from U of Houston's international office FAQs:


    "Is it true that during the summer I can work anywhere and do not need to obtain special permission?
    This is FALSE! If you are in legal full-time F-1 status, you may work anywhere on-campus during the summer (full-time or part-time) but off-campus employment ALWAYS requires special permission from DHS or ISSSO."

    Good luck with your situation.
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    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,657, Reputation: 841
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    #8

    Dec 13, 2007, 08:52 AM


    Technically, you should NOT work on CPT as an independent contractor (under Form 1099). It is a technical violation of your F-1 visa.

    As a practical matter, the IRS does not really care; all they are concerned about is whether you file a tax return and pay the taxes.

    You will have to file a Form 1040NR with a Schedule C instead of the easier Form 1040NR-EZ.

    You will have to file a quatertly estimated tax return and mail in a payment on 15 April, 15 June, 15 September and 15 January (for the following year) to cover your expected tax liability. This replaces the withholding that the employer is required to do if you get paid under a W-2.

    Many companies do not give the student a choice; they just hire them as independent contractors, or refuse to hire them at all.

    Since, as a student on a F-1 visa working in his field of study, you are NOT subject to either Social Security and Medicare taxes or (as a independent contractor), self-employment taxes, it makes NO DIFFERENCE tax-wise, at least initially.

    BOTTOM LINE: If you can make OVER twice as much money on CPT by working as a contractor, do it. Money talks!
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    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
     
    #9

    Dec 15, 2007, 06:37 AM
    If there is no violation, you should prefer working as independent contractor at higher pay. Normally an independent contractor pays double the social security and medicare taxes than a W2 employee. But in your case, you are exempt from these taxes for five years.
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    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,657, Reputation: 841
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    #10

    Dec 16, 2007, 10:46 AM
    Agreed!
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    knr's Avatar
    knr Posts: 1, Reputation: 1
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    #11

    Jan 9, 2008, 08:16 PM
    As an Independent Contractor, you do not need to wait for your year end 1099 to pay tax. You can pay quarterly tax as you earn. This could keep IRS happy.
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    Visa Taxes Expert's Avatar
    Visa Taxes Expert Posts: 40, Reputation: 1
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    #12

    Jan 10, 2008, 06:57 AM
    Hello

    F1 students are encouraged to perform only on-campus related jobs, or jobs outside campus during their OPT.

    It is not encouraged to work as an independent contractor.

    But if you have 1099 income and W-2 income, as you are considered a Non Resident Alien, file Tax Forms 1040NR EZ , Form 8843 and Schedule C to be in compliance with the IRS.

    Hope this helps!
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    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,657, Reputation: 841
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    #13

    Jan 10, 2008, 11:26 AM
    Subsab:

    Working as an independent contractor is a violation of your F-1 visa. However, NOT reporting the 1099 income is even worse, because the IRS IS EXPECTING that you file a Schedule C to claim that income.

    As to how bad a violation it is, I cannot comment as I am NOT an immigration attorney. I suspect it is not a very bad violation, however. Recommend you post this questionon the LAW forum under Immigration Law.

    To file a Schedule C, you must file Form 1040NR; Schedule C cannot be filed with Form 1040NR-EZ.
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    Visa Taxes Expert's Avatar
    Visa Taxes Expert Posts: 40, Reputation: 1
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    #14

    Jan 10, 2008, 11:36 AM
    Agreed!
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