This session, led by Nanda Kumar from I Lead Tax, addressed whether H4 EAD holders can start a business in the US, with a focus on Indian nationals and non-US citizens.
Key points included permissible work activities, compliance requirements, and step-by-step guidance for business formation.
The importance of maintaining legal status, proper tax planning, and separating personal and business finances was emphasized.
Attendees were encouraged to seek professional advice and contact the tax team with further questions.
Action Items
N/A: No explicit action items or due dates were given in the transcript; audience is invited to reach out with questions.
H4 EAD Eligibility and Permitted Activities
H4 EAD (Employment Authorization Document) allows eligible H4 visa holders (dependents of H1B holders) to work legally in the US.
H4 EAD holders can:
Work for any US employer, full- or part-time, or for multiple employers, as long as the EAD is valid.
Start and run their own business (LLC or C Corporation).
Work as freelancers or independent contractors.
EAD must remain valid at all times; employment or business must cease if EAD expires or if the H1B spouse loses status.
Restrictions and Compliance Considerations
H1B spouses cannot actively work in the H4 holder’s business without their own work authorization, but they may have ownership.
Compliance with all federal, state, and local tax and business laws is required.
It is strongly recommended to hire a qualified accountant or tax advisor for proper payroll, bookkeeping, and legal compliance.
Non-compliance can result in significant fines and penalties.
Steps to Start a Business as an H4 EAD Holder
Choose an appropriate business structure (LLC, partnership, S corp, C corp) based on needs and state requirements.
Register the business with the relevant state authorities and obtain any required licenses or permits.
Obtain an Employer Identification Number (EIN) from the IRS.
Open a dedicated business bank account and keep personal and business finances strictly separate.
Maintain sound bookkeeping and regularly review financial statements.
Tax Planning and Professional Guidance
Tax planning should be done proactively (ideally quarterly or monthly), not just annually during the filing season.
Engage consultants for optimizing income, expenses, liabilities, and achieving personal and business goals.
Review personal finances, including income, liabilities, expenses, assets, and dreams (“I-LEAD” framework).
Decisions
H4 EAD holders can legally start and operate a business in the US — Confirmed based on current USCIS policies; provided operational and compliance guidance.
Open Questions / Follow-Ups
No explicit open questions were noted, but the host invited viewers to submit further questions for future sessions.