Something else to consider is the potential impact on other benefits. When your WFH stipend is treated as taxable income, it increases your total wages, which can affect calculations for things like Social Security taxes, unemployment insurance, and even retirement plan contribution limits. On the positive side, if you have a 401(k) or similar retirement plan with employer matching, the higher reported income could mean you can contribute more to hit percentage-based limits. However, you'll also pay more in Social Security and Medicare taxes on that additional $2,400. If your company is open to restructuring this as an accountable plan, it's worth emphasizing to HR that this change would benefit the company too - they'd save on their portion of payroll taxes (Social Security, Medicare, unemployment insurance) on the stipend amounts. This creates a win-win situation where both employer and employees save money. I'd recommend calculating exactly how much extra you're paying in taxes on the stipend versus your actual home office expenses to present a compelling case to your HR department.

I went through this exact same situation last year and wanted to share some additional considerations that might help you navigate this with your employer. One thing that worked well for me was putting together a simple cost-benefit analysis to show HR. I calculated not just my personal tax impact, but also what the company was paying in additional payroll taxes on the stipend. When they saw that switching to an accountable plan would save them about $180 annually per employee just in their portion of FICA taxes (7.65% of $2,400), plus reduce their workers' comp and unemployment insurance costs, they were much more receptive to making changes. I also discovered that our payroll provider actually had templates for setting up accountable plans - many companies don't realize how straightforward the administrative side can be. We ended up with a simple quarterly submission process where employees submit receipts through our existing expense reporting system. The key was framing it as a business efficiency improvement rather than just an employee tax complaint. I emphasized how proper expense reimbursement would reduce administrative overhead for payroll processing and eliminate confusion about tax treatment for employees. If your HR team seems hesitant about making changes, you might suggest starting with a pilot program for a few employees to demonstrate how smoothly it works before rolling it out company-wide. Sometimes the fear of complexity is what prevents companies from making beneficial changes like this.

This is a fascinating discussion that touches on some really complex tax planning strategies. As someone who's dealt with multi-state tax issues (though nowhere near NHL player complexity), I can confirm that the jock tax creates real challenges. One thing I'd add is that the advantage isn't just about the player's salary - it extends to their entire financial ecosystem. Players in no-tax states often structure their off-season training businesses, endorsement deals, and investment income to flow through their tax-friendly home state. So a Florida-based player might have their personal training company, equipment endorsements, and appearance fees all structured to minimize overall tax burden. The salary cap issue is the real kicker though. Teams in high-tax markets are essentially operating with a smaller "effective" salary cap because they need to offer more gross compensation to match the after-tax value of offers from no-tax states. It's not just about individual fairness to players - it creates a structural competitive imbalance that the league hasn't really addressed. I'm curious if anyone knows whether the NHL has ever considered adjusting salary cap calculations based on local tax rates, similar to how some other compensation systems account for cost of living differences?

The tax discussion here is spot on, but I want to add something from the IRS perspective that might clarify things. The "jock tax" rules are actually pretty straightforward - athletes pay taxes based on "duty days" in each state, which includes games, practices, team meetings, and even travel days in some jurisdictions. What makes this especially complex for NHL players is that they're not just dealing with state income taxes - they're also navigating different rules for things like signing bonuses (often taxed where the contract is signed), endorsement income (taxed where services are performed), and investment income (taxed based on residency). The 5-8% advantage estimate mentioned earlier is realistic for salary, but the total financial impact can be much larger when you factor in all income sources. A player who establishes legitimate residency in a no-tax state can potentially save on ALL their non-game income, which for star players often exceeds their salary. One thing to watch out for though - states are getting more aggressive about auditing high-income athletes. California and New York in particular have entire departments dedicated to tracking whether athletes are legitimately avoiding taxes or just claiming fake residency. The documentation requirements are getting stricter every year.

Just wanted to add that if you're doing this house flipping thing regularly, you might want to consider setting up quarterly estimated payments for next year too. I got hit with a nasty underpayment penalty my first year flipping houses because I didn't realize I should have been making quarterly payments all along.

One thing I'd add that helped me tremendously when I was in a similar situation - make sure you keep detailed records of all your expenses related to the property renovation. Things like materials, contractor fees, permits, even mileage to/from the property can be deducted against your capital gains. I was so focused on figuring out how to pay the estimated taxes that I almost forgot to properly document all my renovation expenses. Ended up saving me about $3k in taxes when I filed. Keep all receipts and take photos of major work being done - the IRS loves documentation if they ever audit real estate transactions. Also, since you mentioned this was with a business partner, make sure you're both on the same page about how you're reporting the income and expenses. If you split everything 50/50, your tax calculations should reflect that split consistently.

I'm new to this community but have been following this discussion closely as I'm considering helping my daughter with her upcoming IVF treatments. The conflicting advice from tax professionals that everyone's mentioned really resonates with me - I've gotten completely different answers from three different CPAs about this exact issue. What strikes me most is how unanimous the consensus has become once the actual tax code references were cited. It's clear that IVF treatments qualify under Publication 502's fertility enhancement provisions, and the IRC Section 2503(e) exclusion for direct medical payments is well-established law. I'm particularly grateful for the practical advice about working with the IVF clinic to ensure proper billing procedures. As a parent wanting to help my child during this difficult time, knowing that the tax system actually supports this kind of medical assistance gives me great comfort. For anyone still dealing with resistant tax preparers on this issue, it might be worth finding someone who specializes in gift and estate tax matters. Sometimes general practitioners just aren't familiar with these specific provisions, even though they're clearly defined in the tax code.

Thank you all for this incredibly thorough discussion! As someone who's been lurking in this community for a while but never posted, I felt compelled to share my experience after reading through all these helpful responses. I actually went through this exact situation about six months ago when I helped my sister-in-law with her IVF treatments. Like many of you, I initially got conflicting advice from tax professionals - one said it was definitely a gift tax issue, another said it wasn't, and my regular CPA admitted he wasn't sure about fertility treatments specifically. What ultimately gave me confidence was doing exactly what several people here suggested: I contacted the IVF clinic directly and worked with their billing department to set up payments. They were incredibly helpful and even provided documentation showing that the treatments were medically necessary for fertility enhancement. I ended up paying about $28,000 directly to the clinic over the course of her treatment cycle. When tax season came around, my CPA (after doing his own research into Publication 502 and IRC Section 2503(e)) confirmed that no gift tax return was needed. The direct payment to the medical provider for qualifying medical expenses made it completely exempt from gift tax limitations. My sister-in-law is now 7 months pregnant with twins, and knowing that I could help without creating tax complications for either of us made the whole experience that much more meaningful. For anyone still on the fence about this issue, the law really is clear once you dig into the actual IRS publications rather than relying on general assumptions about gift tax rules.

Has anyone addressed the retirement account angle here? One major benefit of S-corp employment is that you can contribute to a Solo 401k as both employer and employee. If you're not on payroll anymore, you're missing that opportunity. When I cut back my S-corp involvement, I kept myself on a minimal salary partly to maintain my retirement contributions. Worth considering if retirement planning is important to you.

This is a really common situation post-COVID, and you're handling it correctly from what I can see. Since you're not performing any services for the S-corp anymore and your parents are properly W2'd as the actual workers, you shouldn't need to take a salary. The key documentation points others mentioned are crucial though. I'd add that you should also keep records of your new W2 employment showing you're working full-time elsewhere - this helps demonstrate you're not available to provide substantial services to your S-corp. One thing to watch out for: if you're still involved in any major business decisions (like whether to take on new clients, major expense approvals, etc.), document exactly what those activities are and how minimal they are. The IRS generally looks for a pattern of regular, ongoing services rather than occasional ownership decisions. Your situation sounds legitimate, but having clear documentation will save you headaches if you ever get questioned about it.