🎓 Understanding Your O1 Visa & U.S. Taxes

An interactive guide to navigating work authorization and taxation in the United States

Author: Duke Alexander

on behalf of Duke Tax | The Tax Firm for Creators and the Entertainment Industry

Start Learning
Getting Started

What You'll Learn

IRS Fundamentals

Understand how the U.S. tax authority works and what it means for you

O1 Visa Rules

Learn who you can work for and what activities are permitted

Tax Obligations

Discover how your time in the U.S. affects your tax requirements

Payment Structure

Get the cleanest payment setup for visa and tax compliance

Chapter 1

Understanding the IRS

What is the IRS?

The IRS (Internal Revenue Service) is the United States tax authority. It works the same way as the Cyprus Tax Department or any other country's tax authority.

Key Point:

When you are inside the United States and work for a U.S. employer, the IRS handles the taxes for that income.

How Does It Apply to You?

1

Location Matters

The IRS jurisdiction applies when you physically work inside the United States

2

U.S. Employer Income

Income earned from U.S. employers while in the U.S. is subject to IRS taxation

3

Compliance Required

You must follow IRS rules for reporting and paying taxes on U.S. income

Test Your Knowledge

Question: When does the IRS have authority to tax your income?

Chapter 2

O1 Visa Work Authorization Rules

Who Can You Work For?

Your O1 visa is very specific about who can employ you while you are in the United States.

Primary Sponsor:

Your O1 visa will name the U.S. employer that is allowed to hire you. In your case, this is JC and Sondra LLC, since they are sponsoring you.

Allowed

  • Work every day for JC and Sondra LLC
  • All work done while physically in the U.S.
  • Full-time employment with your sponsor
  • Own foreign companies (Cyprus companies)
  • Make high-level decisions for your foreign companies

Restricted

  • Cannot work for Alture unless added to O1
  • Cannot do daily work for Cyprus companies in U.S.
  • Cannot work for any non-listed employer
  • Cannot perform operational tasks for foreign companies

Adding Additional Employers

Want to Work for Alture?

If you want to work for Alture while in the United States, Alture must be officially added to your O1 as another authorized employer. Without this addition, you cannot do work for Alture while physically in the U.S.

Your Foreign Companies

Cyprus Companies

You can own your Cyprus companies with no problem. Ownership is not restricted.

Strategic Decisions

You can make high-level, strategic decisions for your companies with no problem.

Daily Work Prohibited

You cannot do daily operational work for your Cyprus companies while inside the U.S., as the O1 does not give permission for this.

Test Your Knowledge

Question: What must happen before you can work for Alture while in the United States?

Chapter 3

How Taxes Work for You

Time in the U.S. Determines Your Tax Status

Your tax obligations depend on how long you stay in the United States during a calendar year.

Under 6 Months

Non-Resident Status

What Gets Taxed?

Only U.S. source income

  • Pay from JC and Sondra LLC is taxed
  • Pay from Alture (if added to O1) is taxed
  • Cyprus company income stays with Cyprus
  • No need to report foreign income to IRS
Simple Situation:

Only the income you earn from work done in the U.S. is taxed by the IRS.

Over 6 Months

Resident Status

What Gets Taxed?

Worldwide income

  • Pay from JC and Sondra LLC is taxed
  • Pay from Alture (if added to O1) is taxed
  • Cyprus company income goes on U.S. tax return
  • Must report all foreign income to IRS
Important:

The IRS sees you as a U.S. tax resident and requires you to include Cyprus income on your U.S. tax return.

Foreign Tax Credit - No Double Taxation!

You Won't Pay Tax Twice

Cyprus will still tax you on your Cyprus income. However, the United States gives something called a Foreign Tax Credit.

  • This credit reduces U.S. tax by the amount you already paid to Cyprus
  • You do not need to apply for anything special
  • Your accountant simply reports the Cyprus tax on the form
  • The credit is automatically given

Test Your Knowledge

Question: If you stay in the U.S. for less than 6 months in a year, what income does the IRS tax?

Chapter 4

Cleanest Payment Structure

Best Practices for Payments

Following the correct payment structure keeps everything legal, simple, and safe for both your visa and taxes.

JC and Sondra LLC

Primary Sponsor
What they should pay you for:
  • All work done while in the United States
  • As a normal U.S. employee or contractor
Why This Works:
  • Keeps your visa clean - paid by O1 sponsor
  • Keeps taxes clean - IRS can clearly see U.S. work income
  • Full compliance with visa requirements

Alture

Conditional Employer
Two scenarios:
If Added to O1

Can pay you for work done while in the United States

If Not Added to O1

Can only pay you for work done while you are outside the United States

Your Cyprus Companies

Foreign Entities
What they should pay you for:
  • Work done while physically in Cyprus
  • Work done in other countries outside the U.S.
  • NOT for any work done while in the U.S.
Why This Matters:
  • Keeps your O1 visa safe
  • Avoids any visa violation problems
  • Clear separation of foreign vs. U.S. work
Follow This Structure:

If you follow this payment structure, everything stays legal, simple, and safe for both your visa and your taxes. You'll have clear documentation, proper compliance, and peace of mind.

Test Your Knowledge

Question: What work should your Cyprus companies pay you for?

Quick Reference

Simple Summary

Work Authorization

  • ✓ Work every day for JC and Sondra LLC in the U.S.
  • ✓ Work for Alture only if added to O1
  • ✗ Cannot do daily work for Cyprus companies in the U.S.

Taxation Rules

  • Under 6 months: Only U.S. work income taxed
  • Over 6 months: U.S. and Cyprus income on U.S. return
  • ✓ Foreign tax credit prevents double taxation

Payment Best Practices

  • JC and Sondra LLC: Pay for U.S. work
  • Alture: Only if on O1, for U.S. work
  • Cyprus Companies: Pay for non-U.S. work only

Need Professional Guidance?

For personalized tax advice and support, contact Duke Tax

Duke Tax

The Tax Firm for Creators and the Entertainment Industry