Getting Referral money on EAD

[gcCircle]

I got two quick questions:

I am working on EAD(I-485 pending) from last year or so and I am wordering if I can get paid a referral bonus of $1500 from a differnent comany than whom I am working with ? And how should I handle this in the year end returns.

Another question : Lets say if the company pays the same amount as an expense, can I get the check that way and then how do I mention in my tax retunrs ?

thanks

[businesswoman]

Originally Posted by gcCircle

I got two quick questions:

I am working on EAD(I-485 pending) from last year or so and I am wordering if I can get paid a referral bonus of $1500 from a differnent comany than whom I am working with ? And how should I handle this in the year end returns.

Another question : Lets say if the company pays the same amount as an expense, can I get the check that way and then how do I mention in my tax retunrs ?

thanks

Make sure the company reports this as the " Other Income" on the 1099( Box 2). Because this is just a fee that they are paying you and its not the income that you have earned working for them. ( I am assuming that you just get this as you refer and you do not operate a business)

Otherwise, you end up paying SE taxes(if income is in box 7 of 1099). Last year I had a Taxpayer come with a situation like you and we had to get the 1099 corrected before we could file the return other wise you end up getting a sweet nice letter in few days from Uncle Sam.

I hope this helps. My advice is based on your posting and from what I have understood from it.

[gcCircle]

Businesswoman/****

Thanks for your encouraging answers!

you are correct in understanding that I don't operate any business, but I do some sort of recruiting and for every recruit I get paid pretty small amount of money < $100 but as you can imagine over the period 12 months this money could become some where around $1000-%1500.

What actually I am wondering is: I spend lot of time in calling people and good part of the money what I am getting is actually being spent because of phone/internet/driving and meeting. Can I get that referral money as a part of expense? If I can I hope this won't look suspicious because I won't be declaring that money in my returns?

Please advice!

Thanks for your help in this regard

[businesswoman]

Originally Posted by ****

If you claim your phone calls as expenses, then you would indicate that you are running a business.

I agree with ****. In that case you are running as business.

In case of other income, it is reported on the last line in Income section on 1040. But you want to claim expenses certainly do so on Sch C and end up paying Self EMployment Taxes.

You cannot claim expenses on Sch A as the expenses have not been incurred when you are working as an employee.

You have exactly figure out what you are doing first.