I am on H1B in the US. A relative owed me some money ($450) and he transferred that to my account via Zelle. I realized after the transfer that, he has registered some company XYZ Inc. and sent money from the account of that company (transaction detail shows that).
It is just a personal loan payment that he did to me.
Could this be an issue for me in the future? If so then what is the best remedy at this stage? Should I return the money to him and get it in cash or something else?
Will he show this amount as an expense in his accounting books? Most probably yes. He might report it to IRS as a consulting payment or similar, which is considered an earned income for you.
So, ideally, this would be considered your income and should be added to your total income and pay tax on it.
The problem is, being on an H1B visa I am not allowed to do any additional work other than my main job. I am worried about this being a trouble for my visa at a later stage.
What is the remedy for this? I can request him that he should not show this as an expense as it is not his expense but a loan return.
Is there a better way to handle this?