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Do I have to pay taxes on my relocation and CME stipend?

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  • Do I have to pay taxes on my relocation and CME stipend?

    I'm currently a w2 employee at a private practice and I was wondering if I would have to pay taxes on my relocation and CME stipend? I had to provide receipts for both before I was reimbursed. I also got a signing bonus that was already taxed up front. Thanks!

  • #2
    Same crap happened to me.  The company withheld taxes on it.

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    • #3




      I’m currently a w2 employee at a private practice and I was wondering if I would have to pay taxes on my relocation and CME stipend? I had to provide receipts for both before I was reimbursed. I also got a signing bonus that was already taxed up front. Thanks!
      Click to expand...


      If you are simply being reimbursed for receipts you turned in, you won't have to pay taxes on them. This is called an "accountable plan". otoh, if you are paid a stipend rather than being reimbursed, the payment to you will be treated as income and you will have to report your payments as employee business expenses, subject to a haircut of 2% of your AGI. This sounds like what happened to Winkleweizen.

      I strongly suggest you double-checking with your employer to find out where your payments will fall. Expense reimbursements are almost always the best choice. If you have a stipend you are not using, though, it is obvious that you are receiving taxable income.
      Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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      • #4
        Thank you Johanna!

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        • #5
          Good morning - I have a similar situation and just want to confirm as my new employed hospital partner has been stressing out about CME reimbursement.

          We are both W2 employees of a critical access hospital and have a 4k per year CME account. He is convinced the hospital has to directly pay (with their corporate credit card or similar) for any of his CME activities, worrying that he will be taxed if he pays himself (various dues, CME materials or course fees mainly) and then the hospital reimburses. I have paid my own expenses for CME and had them reimbursed by the hospital for a few years and have not claimed this as taxable income and the hospital does not indicate a taxable event of my tax documents.  So am I correct that he should not worry about taxes on a CME account in this situation?

          Thanks!

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          • #6




            Good morning – I have a similar situation and just want to confirm as my new employed hospital partner has been stressing out about CME reimbursement.

            We are both W2 employees of a critical access hospital and have a 4k per year CME account. He is convinced the hospital has to directly pay (with their corporate credit card or similar) for any of his CME activities, worrying that he will be taxed if he pays himself (various dues, CME materials or course fees mainly) and then the hospital reimburses. I have paid my own expenses for CME and had them reimbursed by the hospital for a few years and have not claimed this as taxable income and the hospital does not indicate a taxable event of my tax documents.  So am I correct that he should not worry about taxes on a CME account in this situation?

            Thanks!
            Click to expand...


            You are correct. The hospital does not have to cut a check directly to the provider. That is the purpose of an accountable plan, which it looks like you fall under.
            Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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            • #7
              Thanks again for the quick response!

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              • #8
                Johanna,

                Question about this.  I have an accountable plan for CME expenses, books, and professional society dues.  I of course have to provide itemized receipts. Our hospital says they can't reimburse for any alcohol because of IRS rules.  One of my partners jokes that when at an out of town CME meeting, he can buy the surf and turf and Ruth's Chris steakhouse for $100 and have it reimbursed, but heaven forbid he turn in a receipt from Appleby's with a beer and burger for $20.  Is there truth to this, or is it just the hospital's way to save a few more dollars?  They similarly say this accountable plan can't be used for equipment (stethoscopes and the like) due to IRS rules.

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                • #9




                  Johanna, Question about this. I have an accountable plan for CME expenses, books, and professional society dues. I of course have to provide itemized receipts. Our hospital says they can’t reimburse for any alcohol because of IRS rules. One of my partners jokes that when at an out of town CME meeting, he can buy the surf and turf and Ruth’s Chris steakhouse for $100 and have it reimbursed, but heaven forbid he turn in a receipt from Appleby’s with a beer and burger for $20. Is there truth to this, or is it just the hospital’s way to save a few more dollars? They similarly say this accountable plan can’t be used for equipment (stethoscopes and the like) due to IRS rules.
                  Click to expand...


                  So, your hospital separates the Christmas party booze from the chicken and green beans and forgoes that legitimate deduction? And doesn't write off their own equipment? Don't think so. Both of the items mentioned above are legitimate deductions as long as they are reasonable and necessary. For some people, a beer with a burger is absolutely necessary - just ask PhysicianOnFIRE.

                  The alcohol excuse sounds like a personal decision, maybe made at the BOD level. Perhaps your hospital is owned by a religious organization?

                  Bottom line: it doesn't matter whether they reimburse someone else for the expense or spend it directly out of the business account, all the same. Ask for the code section.
                  Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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