H1B Stock Trading in USA

Can H1B visa holder do Stock Trading in US? Tax, Day time trading ?

In Living in USA by Kumar9 Comments

One of the most commonly asked questions is,  ” Can I do stock trading in US, I just came to US on H1B visa ? Here are few of my thoughts and experiences.

Can you do stock Trading on H1B visa – Any rules ?
Yes, you can do stock trading in US by creating an account on your name from one of the online stock brokers like Scott trade, Ameritrade, TradeKing, etc. It is perfectly legal to do stock trading. I personally have an account and it is very easy to sign up too. You will be asked for Social Security Number (SSN) and other details when you signup for the account.  You cannot trade on behalf of someone or for someone, it should be your personal account. You can always speak to these agencies to get more information on how trading works for internationals.

Paying taxes for Stocks trading on H1B visa
You should pay taxes for all your Stock earnings you make. No exceptions as it is a source of income and IRS taxes for all income. If you have made money or have done any transactions, it is a good idea to go to a tax consultant to get help with filing taxes. Personally, me and my friends, as we are on H1B visa we use tax consultants for filing taxes for stocks,  as it can get complicated.  Because, if you lose money, it is tax deductible and you can get some advantages. Do NOT mess with tax filing in US.

Day trading vs Delivery based trades on H1B visa ?
It is very common for most of the internationals to do delivery based trades, but some may have thoughts about day trading and having it as a full time job.  The reality is, you cannot do it as a full time job because you are sponsored H1B visa and should work full time for your primary job or company full time. Day trading may be done on and off, but it should not be done so much that it takes away time away from your primary job.  This is based on my knowledge and experience.

Do USCIS have any official references on stock trading ?
Well, actually No. USCIS only publishes anything related to status. You should not violate your main status, when you do these side activities. What it means is that, if you are full time student on F1 visa, you need to be enrolled full time and maintain legal status and not work off camps, etc. Similarly, if you are on H1B Visa, you are supposed to work full time for the companies that sponsor you H1B Visa, you cannot do stock trading on your own as full time job…If you are in doubt, you should always check with your attorney or your DSO, in case of F1 visa to get more clarity on specifics.  My experience has been that you can do stock trading, as a side hobby or after office work, long as you declare everything and pay proper tax for the same.

What has been your experience ?  Share your experiences

Image Credit : http://www.flickr.com/photos/bfishadow/3099537747/

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Comments ( 9 )

  1. Vijayakumar

    Hi Kumar,

    Thanks for the article and I have invested in few stocks and I am on H1B visa. I am not sure is there USCIS info where it says to invest in stocks and mutual funds while in h1B visa. I would appreciate if you can share the info. As I google I don’t see any positive lead except your article.

    Vijay

    1. administrator
      Kumar

      Vijaykumar,
      Well, USCIS does not have any guidance on stock trading. The fact is that, they will only tell the key things to maintain your stauts and key things you should not that violate status. For instance, they will clearly tell that H4 visa holder cannot work, if they do not have EAD through their spouse…but they will not specifically tell that you can study on H4 visa or you can drive on H4 visa, etc. Do you see what I mean ? If you are in doubt, it is always best to speak to the agency that you plan to do stock trading on the visa status and understand more on how to work with stocks as foreigner. This is a good article that talks about the same : http://www.fool.com/knowledge-center/can-a-non-us-citizen-trade-us-stocks.aspx

  2. Neeraj

    Additional info : Although I am on h1 and trade on tradeking.com. I was trying to open a trading account with Merrill Edge and came to know that Merrill Edge requires Green Card. I wish Merrill Edge would have allowed trading with H1, atleast they charge very reasonable commission . Till I don’t get gc, i guess i will have to stick to tradeking.

    1. viktor

      Hi neeraj.. I have a few Questions regarding trading on H1B Visa, I had requested the Admin for some suggestions but didnt get any reply So I am directing the same Qns to U.
      1. SO the initial funding has to be 25000$, or U can trade with less initial Funding?
      2. I know I cant trade much on H1B visa as it can be misunderstood with interfering with my primary Job. But Can I hire some1 to daytrade my account as I know someone who r successful in Daytrading US markets and r willing to manage my account. If I take all responsibility of profit/loss.. then I guess I am not breaking any rules on daytrading for H1B visa holders ??
      Since U r there, I will appreciate ur help/suggestions Thnx.

  3. viktor

    hi Kumar,
    Thanks for the info U provided in this webpage. I have a few Questions regarding trading on H1B Visa.
    1. SO the initial funding has to be 25000$, or U can trade with less initial Funding?
    2. I know I cant trade much on H1B visa as it can be misunderstood with interfering with my primary Job. But Can I hire some1 to daytrade my account as I know someone who r successful in Daytrading US markets and r willing to manage my account. If I take all responsibility of profit/loss.. then I guess I am not breaking any rules on daytrading for H1B visa holders ??
    Pls share ur Views.. thanks

  4. ObjPython

    This is probably related to the topic ,I opened an account with some online broker and they are requesting for visa with photo ID and all i have is approval notice with I-94 card attached to it , how do i explain this person that i don’t have a H1 B visa with Photo Id and it will be pasted into my passport when i travel outside of USA (at least that’s my understanding) , Any suggestions? I explained it to him but the guy says its listed as required doc ,what to do i am in pickle!

  5. easwaran

    @Kumar,
    greetings, and many thanks for the information
    but what about the category who is in US , like students, who is in F1 VISA
    can he trade, and what is the tax structure to pay in case you earn money.
    short term profit attracts taxes, if so
    what about long term profit
    by the by how is your experience as a trader
    or was
    care to shower us with information
    you are doing fantastic service Mr.Kumar
    keep coming and bless us
    love and gratitude
    easwaran
    india

    1. administrator
      Kumar

      Yes, students on F1 visa can do trading provided they have SSN. I am not an expert on the details of specifics of taxing, I usually go to tax consultant. I have not done enough trading in US. The best idea is to talk to customer service of a stock brokerage firm to get more specifics.

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