Tax related, pls help!!!!

[Jaggy]

Pls help me out with the foll queries. I would really appreciate it.

Will any of the foll have an effect on my I485 processing

1. In 2002 I had been paid by my employer who holds my H1B 9000 USD in the form of 1099. But it was added in my regular paycheck and I showed that while filing my returns as self employment.

2. In 2001 the taxes that had to be paid to NY state were paid to PA state(thanks to my accountant). So now I have to request a refund from PA and pay some amnt to NY. I was basically living in PA and my client was in NY(was flying in and out of PA).


Pls help me out with the above queries as I am really worried about it. You'll can email me at jeetu248@yahoo.com

Thanks in advance!

 

[wik]

Pls help me out with the foll queries. I would really appreciate it.

Will any of the foll have an effect on my I485 processing

1. In 2002 I had been paid by my employer who holds my H1B 9000 USD in the form of 1099. But it was added in my regular paycheck and I showed that while filing my returns as self employment.

2. In 2001 the taxes that had to be paid to NY state were paid to PA state(thanks to my accountant). So now I have to request a refund from PA and pay some amnt to NY. I was basically living in PA and my client was in NY(was flying in and out of PA).


Pls help me out with the above queries as I am really worried about it. You'll can email me at jeetu248@yahoo.com

Thanks in advance!

1) If your sponsoring employer is the same name on your W2 and 1099, I don't think it matters how you got paid, just that the company who paid you was the company you were authorized to work for. My wife (H1B) had a similar situation some years back. When we filed our 485s, we sent tax returns, but not the attachments. If we get an RFE, then we might be asked to send the attachments, but most RFEs I see request last three years returns (sometimes with W2s, but no mention of 1099s). Just tell the truth - it doesn't sound like you have anything to hide.

2) I don't see how accounting for the payment of certain state taxes will be a question for the USCIS. Typically, tax return are requested for two reasons: one, to prove you actually worked and earned money in accordance with your approved status, and two, that you earned enough to not be a public charge, or in the case of having a derivative applicant, like a spouse, that you are able to demonstrate financial support.

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[pralay]

.1. In 2002 I had been paid by my employer who holds my H1B 9000 USD in the form of 1099. But it was added in my regular paycheck and I showed that while filing my returns as self employment.

I am confused (and obviously ignorant). Can you do that in H1? What I understand is that 1099 is not an employee status, rather you are a self-employed and working as a contractor for the company. 1099 does not come under the rules of Labor department. On the other hand, for H1 employee, H1 sponsoring employer must follow LCA. And, in H1 status one cannot be self-employed.

 

[wik]

I am confused (and obviously ignorant). Can you do that in H1? What I understand is that 1099 is not an employee status, rather you are a self-employed and working as a contractor for the company. 1099 does not come under the rules of Labor department. On the other hand, for H1 employee, H1 sponsoring employer must follow LCA. And, in H1 status one cannot be self-employed.

I don't know the letter of the law here, or even if there is one, but consider the following two examples:

1) an H1 specifies a finite amount of time to the contract between employeer and worker. It is not an indefinite engagement (because the visa is not indefinite). So, in that case, the employee is - to some extent - a contractor, obligated to work for the prescribed employer for a set amount of time. By tax law, therefore, they could easily be paid via 1099.

2) an H1 employee gets paychecks and a W2. At the end of the year, the employer pays them a bonus check but it is not processed through payroll. Therefore, it is reported via 1099.

While there might be some nit-picking about the forms of payment, as long as you work only for the entity you are legally allowed to work for, and they pay you at least the income in the original application, then what difference does it make what form the income is reported via, especially if you declare everything properly and pay your taxes?

 

[tammy2]

I am confused (and obviously ignorant). Can you do that in H1? What I understand is that 1099 is not an employee status, rather you are a self-employed and working as a contractor for the company. 1099 does not come under the rules of Labor department. On the other hand, for H1 employee, H1 sponsoring employer must follow LCA. And, in H1 status one cannot be self-employed.

Other than that which 1099 was given (like name of the Form (1099 MISC) )and in which column employer put the amount? Has he put in the wages column? If so According to our tax consultant your employer cannot issue W2 as well as 1099 for same year. He was telling me that some employers do this to avoid the Social security and some other money. But IRS declared it as fraud and punished some people.

This may become problem if BCIS asks for tax returns.

 

[pralay]

I don't know the letter of the law here, or even if there is one, but consider the following two examples:

1) an H1 specifies a finite amount of time to the contract between employeer and worker. It is not an indefinite engagement (because the visa is not indefinite). So, in that case, the employee is - to some extent - a contractor, obligated to work for the prescribed employer for a set amount of time. By tax law, therefore, they could easily be paid via 1099.

2) an H1 employee gets paychecks and a W2. At the end of the year, the employer pays them a bonus check but it is not processed through payroll. Therefore, it is reported via 1099.

While there might be some nit-picking about the forms of payment, as long as you work only for the entity you are legally allowed to work for, and they pay you at least the income in the original application, then what difference does it make what form the income is reported via, especially if you declare everything properly and pay your taxes?

Here the problem. Say, if LCA (for H1) says that the H1 employee should be paid atleast $70000.00 per year, the employer must pay that amount as wage. 1099 payment is NOT considered wage. If the employer pays $70000.00 on W2 (as wage) and pays bonus $10000.00 on 1099, that's OK. But employer cannot pay whole $70000 + $10000 on 1099. If employer pays like that, it indicates that employer paid only $0 as wage, therefore did not follow LCA.
In IRS and Labor dept rule, self-employed are not considered employee, but someone who is doing business with the company. In short,
1. Accordingly the rule, H1 sponsorer employee must employ H1 employee as "employee" in temporary basis.
2. H1 cannot do business when he/she is in H1 status. Therefore, he/she cannot be self-employed.

Regarding your argument about term-limit. No employment is indefinite. If so, layoff, firing would not happen at all. In case of layoff, the termination is not well-defined (when it will happen or how it will happen) and employer can enforce is anytime. So, can an employer pay whole company in 1099? On other otherhand, for aliens the term-limit is set by US government (not employer).
See IRS documents about 1099 rule. tammy already explained some of it.

 

[Jaggy]

But will this cause an issue for I485 stage and also the incorrectly filed returns will that cause an issue

 

[pralay]

But will this cause an issue for I485 stage and also the incorrectly filed returns will that cause an issue

Absoluetely not. Don't worry about it. It's more of employer's issue, than employee's.

 

[Jaggy]

Thanks for the reply really appreciate it. Also what about the incorrectly filed tax returns for 2001?. Pls refer my original posting

 

[ginnu]

Thanks for the reply really appreciate it. Also what about the incorrectly filed tax returns for 2001?. Pls refer my original posting

---you should seek the advice of your CPA for correct answers