All dollar amounts in scenarios are weekly rates unless noted. Stipend amounts are set within GSA per diem limits unless the scenario specifically tests GSA compliance.
Basic Tax Situations
W-2 Nurse with Valid Tax Home
What this verifies: A compliant W-2 nurse with a valid tax home receives tax-free stipends. Federal and California state taxes are computed on base pay only. A CA non-resident return is required.
No-Income-Tax State (Texas)
What this verifies: Texas has no income tax. State tax is zero and no non-resident return is needed.
No Assignments — Zero State
What this verifies: With no assignments, all tax values are zero. The engine handles the empty state cleanly.
Employment Classification
1099 Contractor — SE Tax, Schedule C, QBI
What this verifies: 1099 contractors pay self-employment tax. Business expenses reduce Schedule C income before SE tax. The 20% QBI deduction applies because income is below the $191,950 threshold.
1099 Above QBI Phase-Out Threshold
What this verifies: When net self-employment income exceeds the QBI threshold ($191,950 for single filers), the 20% QBI deduction is fully phased out.
1099 High Earner Above SS Wage Base
What this verifies: Social Security tax (12.4%) is capped at the wage base ($176,100 in 2025). Medicare (2.9%) continues on all earnings. Both assignments are in no-tax states.
1099 Low Income — Full QBI
What this verifies: A low-income 1099 nurse below the QBI threshold receives the full 20% QBI deduction on qualified business income.
Filing Status
Head of Household
What this verifies: Head of household filers receive a higher standard deduction (15,000 for single), reducing federal tax.
Married Filing Jointly
What this verifies: Married filing jointly receives the highest standard deduction ($30,000 in 2025). Even with a 26-week assignment, a significant portion of income is covered by the deduction.
Multi-State Situations
Two States in One Year (CA + NY)
What this verifies: Income from each state is tracked separately. Non-resident returns are required in both California and New York.
Virginia Home, DC Assignment
What this verifies: DC has its own income tax. A nurse working in DC owes DC non-resident tax regardless of home state.
Multiple Assignments, Same State
What this verifies: Income from multiple assignments in the same state is aggregated into a single state entry. Only one CA non-resident return is needed.
State-Level Deductions
W-2 in California — No AGI Floor
What this verifies: California doesn’t conform to TCJA. W-2 employees can deduct business expenses on the CA state return from the first dollar — no 2% AGI floor.
W-2 in New York — 2% AGI Floor
What this verifies: New York allows W-2 expense deductions but applies a 2% AGI floor. Only the amount exceeding 2% of federal AGI is deductible on the NY state return.
1099 in NY — W-2 Deduction Does Not Apply
What this verifies: 1099 contractors deduct expenses on Schedule C, not via state-specific W-2 deduction rules. The NY W-2 deduction does not apply to 1099 workers.
Tax Home Compliance
Itinerant Nurse — No Tax Home
What this verifies: Without an established tax home, the IRS may treat all stipends as taxable income. TaxHomeBase flags the stipend risk.
Long Assignment — 12-Month Rule
What this verifies: The IRS 12-month rule states that if assignments at one location exceed 12 months, that location becomes the nurse’s tax home. A year-long assignment triggers a warning alert.
Property Rented Out — Disqualification Risk
What this verifies: Renting out the tax home property may disqualify it as an IRS tax home. TaxHomeBase flags this as a compliance risk.
No Visit Recorded — Overdue Alert
What this verifies: The IRS recommends returning to the tax home every 30 days. When no visit is on record, TaxHomeBase generates a visit overdue alert.
Expensive Tax Home — Negative Net Benefit
What this verifies: When tax home maintenance costs (rent, utilities, return trips, visit mileage) exceed the tax savings from keeping stipends tax-free, the net benefit is negative. The nurse may be better off going itinerant — TaxHomeBase’s cost-benefit analysis shows this clearly.
Additional Filing Statuses
Married Filing Separately
What this verifies: Married filing separately receives the same standard deduction as single filers ($15,200 in 2025). This filing status is sometimes used when spouses want separate tax liability.
Edge Cases & Special Situations
Assignment Spanning Year Boundary
What this verifies: Only the portion of the assignment within the selected tax year is counted. For year 2025, the Jan 1 through Mar 31 portion (~13 weeks) is included. The November–December 2024 portion appears only in the 2024 tax year.
Assignment with Bonuses
What this verifies: All three bonus types (sign-on, completion, referral) are tracked separately and added to taxable income.
Zero-Stipend Assignment — No Risk
What this verifies: Without stipends, there is nothing at risk from tax home compliance issues. No stipend risk alert fires even though the nurse has no tax home.
Very Short Assignment — 2 Weeks
What this verifies: A 2-week assignment generates only 15,200 standard deduction. Federal tax is zero.
Tax Year 2024 — Different Rates
What this verifies: 2024 uses different tax parameters: standard deduction 15,200 in 2025), IRS mileage rate 0.70). The engine correctly applies year-specific values.
Self-Employment Deep Dives
1099 Business Loss — Expenses Exceed Income
What this verifies: When business expenses (6,000), net self-employment income is zero. No SE tax, QBI deduction, or federal tax applies.
1099 Additional Medicare Tax Trigger
What this verifies: When SE base (92.35% of net SE income) exceeds 4,400/wk for 50 weeks (203,170, triggering the surtax.
MFJ 1099 — Higher QBI Threshold
What this verifies: Married filing jointly has a QBI threshold of 191,950 for single). A nurse earning $160,000 net SE income would lose QBI filing single but retains the full 20% deduction when filing jointly.
1099 with Significant Mileage
What this verifies: The IRS standard mileage rate generates a significant Schedule C deduction that reduces SE income. At 5,000 miles and 3,500 deduction directly reduces self-employment tax.
State-Level Deductions (Extended)
W-2 in Alabama — 2% AGI Floor
What this verifies: Alabama does not conform to TCJA and still allows W-2 expense deductions on the state return, with a 2% AGI floor (same rule as New York).
W-2 in Hawaii — 2% AGI Floor
What this verifies: Hawaii does not conform to TCJA and still allows W-2 expense deductions on the state return, with the same 2% AGI floor as New York and Alabama.
W-2 in Illinois — No State Deduction
What this verifies: Illinois conforms to TCJA. Even with significant tracked expenses, no W-2 expense deduction applies on the IL state return. Only five states (NY, CA, AL, HI, AR) allow this deduction.
Multi-State (Extended)
1099 Multi-State — Florida + California
What this verifies: For 1099 contractors, SE tax applies to total income from all assignments. Florida generates no state tax, so only California contributes to the state tax total.
Three States in One Year (CA + NY + IL)
What this verifies: Income from each state is tracked separately. Three non-resident state returns are required. Each state’s tax is computed independently using that state’s brackets and the income earned there.
W-2 Multi-State — CA (Deduction) + TX (No Tax)
What this verifies: When working in multiple states, the CA W-2 expense deduction applies to the California portion of income, while Texas generates no state tax or filing requirement.
GSA Compliance
Stipends Exceed GSA Per Diem Limits
What this verifies: The GSA per diem rate for Houston is 74/day M&IE. This nurse’s stipends exceed both limits (100/day M&IE). The IRS allows tax-free stipends only up to GSA rates — the excess is flagged.
Tax Home Cost-Benefit Analysis
Positive Net Benefit — Large Stipends, Low Costs
What this verifies: With large stipends (500 rent + $280 visit mileage), the tax savings far exceed maintenance costs. The net benefit is clearly positive.
High ROI Tax Home
What this verifies: With minimal tax home costs ($400/month rent, no other expenses) and large tax-free stipends, the return on investment for maintaining the tax home is extremely high — every dollar spent on maintenance generates many dollars in tax savings.