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  #1 (permalink)  
Old 07-21-2006, 11:36 AM
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Question homebased business

To all gurus here,

I am on H1 and my wife on H4. My wife is also an expert in the art of embroidery and handicrafts, she's become quite famous for her artwork locally. A wholesaler has approached us recently expressing his desire to market her handicraft to other indian stores in the area and beyond. I checked up some info on registering an homebased business and they don't ask you to submit an SSN for registering a proprietary bussiness either at state or local level. A federal or state tax-ID doesn't seem to be an requirement for homebased business either. They just ask you to submit a schedule C attachment with your regular 1040 form when you file tax return.

My questions are following ?

1. If I register a homebased business in my name and include it with my personal tax return, what are the possible implications ? Does IRS or the state business office share info with USCIS regarding business registrations or the only way USCIS would know about the business is if they see my tax returns ?

2. Any other alternative/creative ways to handle it ?

Appreciate your response
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  #2 (permalink)  
Old 07-21-2006, 02:16 PM
xu1 xu1 is offline
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Quote:
Originally Posted by nelsonagn
"creative' would still be illegal

Neither you nor your wife are allowed to violate your 'H' status.

That would include a home based business.

You are only allowed to work for your employer (the H1 petitioner), and your wife is not allowed to work at all.

This is not an issue of whether or not you report the income, nor whether a form asks for an SSN or not. It doesn't even really depend on if there is any income generated.

You cannot WORK at any thing that is not listed on your H1. this includes babysitting and mowing other people's lawns.

about the only legitimate 'home-based' activity is going to school (allowed on H1 and H4) and occasional passive investing in companies .
the statement is not entirely true. You are free to open your one-man corporation as long as you don't get paid. As a business owner you can employ workers or nobody as long as the cash flow remains in the business rather than in the form of your own paycheck.

a friend of mine, prior to getting his GC, opened his own consulting firm while working for some other company. He didn't have tax problems and in fact, he was able to take advantage of the tax benefit. Loophole or whatever, he did deduct quite a lot of car/computer/tech books/equipment depreciation, namingly business expenses. I don't think that was proper but that's what his accountant did on his returns. The morale of the story, you can oopen your own business but better talk to an immigration lawyer and an accountant.
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  #3 (permalink)  
Old 07-21-2006, 02:25 PM
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nelsonagn,
I agree with you. Xu1 I don't know about your friend, was it pre 9/11 ???They havetightened up lots of things in the last 5 yrs.

nelsongan,
can you explain what you mean vby occasional passive investing in companies?

can we own mutual funds? can you define occassional?
thanks.
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  #4 (permalink)  
Old 07-21-2006, 03:52 PM
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Quote:
Originally Posted by nelsonagn
"creative' would still be illegal

Neither you nor your wife are allowed to violate your 'H' status.

That would include a home based business.

You are only allowed to work for your employer (the H1 petitioner), and your wife is not allowed to work at all.

This is not an issue of whether or not you report the income, nor whether a form asks for an SSN or not. It doesn't even really depend on if there is any income generated.

You cannot WORK at any thing that is not listed on your H1. this includes babysitting and mowing other people's lawns.

about the only legitimate 'home-based' activity is going to school (allowed on H1 and H4) and occasional passive investing in companies .
Umm.. I disagree. I volunteer for a non-profit in my spare time. The work is purely social/non-profit, and there are no payments involved. Are you suggesting this is illegal?

If you babysit for your friends, or mow your friends lawn, that is entirely your prerogative. If there is money involved, then it becomes a business transaction and violates the H status.

May be it depends on USCIS definition of 'work' . To throw off your argument, here is my question - Are H-1B holders allowed to gamble? Did you ever buy a lottery ticket? Been to Las Vegas and won some money? What happens to your H status then?

I sent another question to the Q&A session with the attorney. Are H-1B holders allowed to be landlords? If they get income from rental properties, how is it classified - active or passive investment? Does this violate H status?

Keep throwing your questions.
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  #5 (permalink)  
Old 07-21-2006, 03:55 PM
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Quote:
Originally Posted by xu1
a friend of mine, prior to getting his GC, opened his own consulting firm while working for some other company. He didn't have tax problems and in fact, he was able to take advantage of the tax benefit. Loophole or whatever, he did deduct quite a lot of car/computer/tech books/equipment depreciation, namingly business expenses. I don't think that was proper but that's what his accountant did on his returns. The morale of the story, you can oopen your own business but better talk to an immigration lawyer and an accountant.
With EAD, you can open your own business. Your friend must have had his EAD before getting the GC. Good for him. Accountants are employed for obeying the rules, but for exploiting legal loopholes. Thatswhy you pay them big money.
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  #6 (permalink)  
Old 07-21-2006, 03:55 PM
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Nowhere did our friend say that his wife is going to do this work for free. Money will be involved in these transactions. So technically it is illegal, sorry.
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  #7 (permalink)  
Old 07-21-2006, 04:22 PM
xu1 xu1 is offline
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Quote:
Originally Posted by GCwaitforever
With EAD, you can open your own business. Your friend must have had his EAD before getting the GC. Good for him. Accountants are employed for obeying the rules, but for exploiting legal loopholes. Thatswhy you pay them big money.
No, that was before his EAD... He legally registered a corporation on H1b. He told me all about how it saved him some money without jeopardizing anything.
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  #8 (permalink)  
Old 07-21-2006, 04:25 PM
xu1 xu1 is offline
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Default ok ok i got it.

Quote:
Originally Posted by xu1
No, that was before his EAD... He legally registered a corporation on H1b. He told me all about how it saved him some money without jeopardizing anything.
My friend didn't make a single penny on his corporation. This is prob a different story from the wife trying to open a craftsshop.
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  #9 (permalink)  
Old 07-21-2006, 05:11 PM
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Default Yes and No

As per the law it is illegal. But most of the violations are pardoned as long the money involved is meagre and the intention is not that bad. But if INS / IRS goes strictly by law, they can deport you even if you earn .01 cents outside your H1b employer.

Again, there are several people doing below:

1. Cooking for parites and earning money. Yes illegal.
2. Baby sitting for friends and getting paid. Yes Illegal.
3. Moving houses for friends and getting paid. yes Illegal.
4. bla bla bla....

As long as you dont earn a huge sum and go to back everyday with cash and deposit it, you are safe. As long as you dont involve youself with corporations you are safe. Work with only trusted friends. I dont recommend making some crafts and selling it to stores. The stores will have some billing systems and etc etc.

Again there is a saying. A thief is not a theif unless he is caught red handed. Everyone in this world is a thief at one time or another, big or small does not matter.

Attorneys and accountants will answer to your questions. They will not give sugesstions and advice on how to ...... Throw your questions in shrewed way to them, they will tell you whether the law permits it or not. Also they will tell you what are the consequences if you donot go by the law.



Quote:
Originally Posted by xu1
My friend didn't make a single penny on his corporation. This is prob a different story from the wife trying to open a craftsshop.
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  #10 (permalink)  
Old 07-21-2006, 05:13 PM
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Default Yes and No

As per the law it is illegal. But most of the violations are pardoned as long the money involved is meagre and the intention is not that bad. But if INS / IRS goes strictly by law, they can deport you even if you earn .01 cents outside your H1b employer.

Again, there are several people doing below:

1. Cooking for parites and earning money. Yes illegal.
2. Baby sitting for friends and getting paid. Yes Illegal.
3. Moving houses for friends and getting paid. yes Illegal.
4. bla bla bla....

As long as you dont earn a huge sum and go to bank everyday with cash and deposit it, you are safe(MY VIEWPOINT). As long as you dont involve youself with corporations you are safe. Work with only trusted friends. I dont recommend making some crafts and selling it to stores. The stores will have some billing systems and etc etc.

Again there is a saying. A thief is not a theif unless he is caught red handed. Everyone in this world is a thief at one time or another, big or small does not matter.

Attorneys and accountants will answer to your questions. They will not give sugesstions and advice on how to ...... Throw your questions in shrewed way to them, they will tell you whether the law permits it or not. Also they will tell you what are the consequences if you donot go by the law.



Quote:
Originally Posted by xu1
My friend didn't make a single penny on his corporation. This is prob a different story from the wife trying to open a craftsshop.
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  #11 (permalink)  
Old 07-21-2006, 06:39 PM
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Can those who say it is illegal to run a business under a corp on H1 provide some evidence in support of their arguments. It is not illegal just because they think it is illegal.

In US, anyone can run a business...even your grandma in some remote indian village can start a business and set an office here. As long as your business is not taking a job from the pool( meaning you are taking salary which could go to an american employee), you should be safe.

Ofcourse do your own due deligence.
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  #12 (permalink)  
Old 07-21-2006, 07:15 PM
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You could register a business on H1 as long as you do not work for the business. I know H1 holders who have started consulting firms but have employed citizens/LPR to work for them. It is legal. The only thing that would make that illegal is if you work and earn a salary from the business registered in your name.
In the question that started this thread, you cannot register a business and employ your wife (who is on H4) to work for the business. That would be illegal.
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  #13 (permalink)  
Old 07-21-2006, 07:46 PM
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Quote:
Originally Posted by bodhi_tree
To all gurus here,

I am on H1 and my wife on H4. My wife is also an expert in the art of embroidery and handicrafts, she's become quite famous for her artwork locally. A wholesaler has approached us recently expressing his desire to market her handicraft to other indian stores in the area and beyond. I checked up some info on registering an homebased business and they don't ask you to submit an SSN for registering a proprietary bussiness either at state or local level. A federal or state tax-ID doesn't seem to be an requirement for homebased business either. They just ask you to submit a schedule C attachment with your regular 1040 form when you file tax return.

My questions are following ?

1. If I register a homebased business in my name and include it with my personal tax return, what are the possible implications ? Does IRS or the state business office share info with USCIS regarding business registrations or the only way USCIS would know about the business is if they see my tax returns ?

2. Any other alternative/creative ways to handle it ?

Appreciate your response

I've read a command about you can opened the company in your homecountry
and all business matter and the check paid to that company and you can work virtually or fulfilled the ordered anywhere included in united stated.

I think that is a posibility but you can't get the check under your name nor sign the contract under your name/your wife.

It has to be somebody else (some one you can trust).
It quite risky to give other people responsibility and handle your money but that is the only choice when you are H1 and H4 status.

Other than that any kind of work/ freelance / own your business for profit in US is consider illegal or violated your status for H4 and H1 (2 lawyer have confirm this since me and My husband try to find possible additional income to feed our family).




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  #14 (permalink)  
Old 07-21-2006, 08:03 PM
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Question USCIS Publication

I have read different opinions, comments and thoughts from several forums pertaining to non-immigrants opening bussiness. Sometimes, I wonder where all these come from. Isn't there an official publication/guideline by the USCIS on this??? Who knows?
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  #15 (permalink)  
Old 07-21-2006, 11:50 PM
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Quote:
Originally Posted by fromnaija
You could register a business on H1 as long as you do not work for the business. I know H1 holders who have started consulting firms but have employed citizens/LPR to work for them. It is legal. The only thing that would make that illegal is if you work and earn a salary from the business registered in your name.
In the question that started this thread, you cannot register a business and employ your wife (who is on H4) to work for the business. That would be illegal.

I know several doctors who created corporations and then sponsored themselves for GC without problems.
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