Tax Document Question?

[jklm2010 10]

Hi everyone!

I am currently at the step where NVC and my attorney are waiting for me to pay tha IV and AOS fees and gather together the paperwork for I-864.

But it's the most hectic time ever because it's tax season.

I have always worked for corporations and have always had a w-2 and easy taxes, but since July 2014 I have been doing some bookkeeping for

a friend of my father's who has his own small business.

So apparently he has been paying me as an independent contractor therefore it is on me to pay all the taxes on the salary he's been giving me.

I am sooooooo confused because I've never done this before and wasn't even aware that he was paying me as an independent contractor until

the attorney explained it to me.

Apparently I need a 1099 form from my boss AAAAND a business license???? How much of this is true???

Do I really need to issue myself a business license as a bookkeeper NOW when I'm filing 2014 taxes? And besides, I'm leaving

that job because I just recently got hired back into a corporation again as a sales person.

Sorry if I'm confusing you guys as well, I guess my question is...is NVC really going to look at whether I have a business license for this position?

I only worked for the guy for 6 months out of the 2014 year.

Any advice/help is appreciated!

[NikLR 13,227]

~~moved to taxes and finances during US immigration from IR1/CR1 process and procedures as topic is about how to file taxes and not about the IR1/CR1 process~~

[aaron2020 11,651]

Hi,

The attorney is correct on having a business license to run your own bookkeeping business even if its one customer. Your employer should notify his accounttant about the 1099.

Since you are no longer opperatting the business, you no longer need a business license.

[Sirliner 26]

NVC doesn't care about a business license. They do care about proof of income, which makes a 1099 vital. Without it, any income as an independent contractor is going to be hard to prove. A signed contract would be the next best thing. No big deal if you don't need to show it as part of income for the I-684, although the IRS says you're suppose to report independent contractor income over $400 on your tax return. Of course, if your boss never sent a 1099 then they obviously don't know about it.

[Nich-Nick 3,354]

If you sign and date your I-864 prior to April 15 (tax day), then 2013 is your latest tax return. That may help get you on with the process.

2014 taxes and the IRS are a separate issue. Your employer should have provided you a 1099-MISC by the end of January.

Your tax return as a self employed will include:

Schedule C- Profit and Loss from a Business. It is an opportunity to take some business deductions if you happen to work from home and use printer paper, ink, or various supplies you buy yourself.

Schedule SE- Self-Employment Tax. If you were an employee, the employer would be holding out Social Security and Medicare from your checks. He would actually be paying half the Social Security. This Schedule Is where you figure how much you owe (in addition to income tax) for your Social Security and Medicare. As Self-Employed you are charged the whole amount because there is no employer paying half. It goes on your form 1040 on Line 57 in the section called "Other Taxes". You will get to adjust your income slightly by taking a deduction on Line 27 for half the amount, but the full amount is added to your income tax bill.

Edited March 26, 2015 by Nich-Nick

[Amhara 460]

jklm2010 - Your attorney may or may not be right for the business license part. If you live in California, they may require practitioners to get a license and be registered from/with the state. If it was only for 6 months, you may not need to pursue it and open that can of worms. Since the business license would be on the state level, I would suggest you check the requirements on the CA Secretary of State. However, I don't think that will come into play with the NVC or any immigration issue since it's not an ongoing activity.

For the income part of your question, yes like Nich-Nick said, you will file that on your federal return whether or not you received a Form 1099-MISC. The business is not required to issue you a 1099 if you were paid less than $600 for the year (regardless if the payment was in cash or check). (This way, the business can deduct the payments it gave you as an expense against their income tax.) You may also need to report this on your California state income tax. I think this issue will affect immigration issues.

For your taxes, you may only need to add the two forms that Nick mentioned, so the tax return still may be easy - just a new thing to learn. For what it's worth, I would say report the income and deduct any ordinary and necessary (and verifiable) expenses you may have incurred for this business activity. See if you have any state requirements to comply with. Then you shouldn't have anything to worry about with your immigration petition. I would also suggest that you either prepare the returns yourself with tax software or use a tax preparer. Don't use the attorney because they may overcharge you...

[Nich-Nick 3,354]

I didn't mention the business license because I have no idea what California requires. My husband gets most of his income reported on a 1099-MISC as a self-employed contractor. However he does some IT work for other people. When he does that, he has to charge the customer state sales tax on the labor and materials. He only had to get a state sales tax ID so he can remit the tax he collects to the state. He wouldn't require a license or tax ID with the state if he was only a subcontractor.

I don't think a business license has anything to do with federal income tax in the context of this thread. If it was a business that had employees, then an employer ID number but the OP is only a subcontractor which the IRS defines as self-employed. The state may have requirements that have nothing to do with the IRS or the I-864.

[aaron2020 11,651]

jklm2010 - Your attorney may or may not be right for the business license part. If you live in California, they may require practitioners to get a license and be registered from/with the state. If it was only for 6 months, you may not need to pursue it and open that can of worms. Since the business license would be on the state level, I would suggest you check the requirements on the CA Secretary of State. However, I don't think that will come into play with the NVC or any immigration issue since it's not an ongoing activity.

For the income part of your question, yes like Nich-Nick said, you will file that on your federal return whether or not you received a Form 1099-MISC. The business is not required to issue you a 1099 if you were paid less than $600 for the year (regardless if the payment was in cash or check). (This way, the business can deduct the payments it gave you as an expense against their income tax.) You may also need to report this on your California state income tax. I think this issue will affect immigration issues.

For your taxes, you may only need to add the two forms that Nick mentioned, so the tax return still may be easy - just a new thing to learn. For what it's worth, I would say report the income and deduct any ordinary and necessary (and verifiable) expenses you may have incurred for this business activity. See if you have any state requirements to comply with. Then you shouldn't have anything to worry about with your immigration petition. I would also suggest that you either prepare the returns yourself with tax software or use a tax preparer. Don't use the attorney because they may overcharge you...

The business license (business tax) is paid at the city level in California. The Secretary of State deals with incorporation, etc. and is not relevant.

Since the business is no longer in operation, it's a nonissue.

[jklm2010 10]

Thanks for all your help guys!

Cleared a lot of things up for me

I don't think I'll apply for the business license now because I'm not with that business anymore anyway.