I've dealt with this exact scenario multiple times, and the good news is that your covered call should definitely qualify for long-term capital gains treatment based on what you've described. The key factors for qualification with short-term options (less than 30 days) are: 1) The option was out-of-the-money when written, and 2) The strike price meets the benchmark requirements for your stock's price range. Since you mentioned it was OTM when written, you should be fine on both counts. What many people don't realize is that the qualification is "locked in" at the time you write the option. The fact that the stock has moved closer to the strike price afterward is completely irrelevant for tax purposes. The IRS looks at the conditions when the option was created, not what happens during its life. I wouldn't recommend buying back the call just for tax reasons - that would likely result in an unnecessary loss with no tax benefit. Your shares have been held for years, so they clearly meet the long-term holding period, and your qualified covered call preserves that treatment. One tip: definitely document the stock price, strike price, and exact date when you wrote the call. I keep a simple spreadsheet for all my options trades with these details, which has been invaluable when my broker's 1099 needed corrections. Most brokers handle basic covered call tax treatment correctly, but having your own records gives you confidence and backup documentation.

I've been in a very similar situation and can confirm what others have said - your covered call should qualify for long-term capital gains treatment. The most important thing to understand is that qualification is determined at the moment you write the option, not based on subsequent price movements. Since you wrote an out-of-the-money call with less than 30 days to expiration, and you've held the underlying shares for years, you should maintain long-term status even if the shares get called away. The fact that the stock has moved closer to your strike price is actually irrelevant for tax purposes. I'd strongly advise against buying back the call just to avoid potential tax issues - that would likely result in an unnecessary loss for no tax benefit. Your situation sounds like a textbook qualified covered call case. One practical tip: make sure to keep records of the exact stock price, strike price, and date when you wrote the call. While most brokers handle covered call tax reporting correctly these days, having your own documentation gives you confidence and serves as backup if any adjustments are needed on your tax return. You're in good shape tax-wise, so don't overthink it!

Make sure you've got the right version of W-8BEN! There's W-8BEN for individuals and W-8BEN-E for entities. I screwed this up my first year and had my foreign contractors fill out the wrong form which caused headaches later.

Great thread - I'm dealing with this exact situation! I have contractors in Canada, UK, and Australia who help with my digital marketing business. One additional tip I learned the hard way: make sure to keep detailed records of exactly what services each foreign contractor provides and where they perform the work. During an audit a few years back, the IRS wanted to see clear documentation that the work was genuinely performed outside the US to justify not issuing 1099s. I now maintain a simple spreadsheet with contractor name, country, service description, payment dates/amounts, and W-8BEN expiration dates. Takes maybe 10 minutes a month to update but gives me peace of mind that I have everything properly documented. Also worth noting - if any of your foreign contractors ever come to the US to perform work (even temporarily), that portion might need to be treated differently for tax purposes. Just something to keep in mind as your business grows.

I've been dealing with a similar situation in my S Corp. One thing I'd add to the excellent advice here is to make sure you're consistent with how you handle these premiums throughout the year, not just at year-end. We set up our payroll system to add the health insurance premiums to our W-2 wages each pay period (subject to income tax but not FICA), rather than waiting until December to make one big adjustment. This gives a more accurate picture of our actual compensation throughout the year and avoids any potential issues with quarterly estimated tax payments. Also, regarding the equity concern with your partner - we addressed this by having our attorney draft language in our shareholder agreement that specifically states how health benefits are handled. It clarifies that the company provides health insurance coverage to all shareholders regardless of premium cost, which removes any ambiguity about one partner subsidizing the other's coverage. This protects both partners if ownership changes in the future.

One important consideration that hasn't been mentioned yet is the timing of when you establish your health insurance policy through the S Corp. The IRS requires that the health insurance plan be "established under" the business for shareholders to qualify for the self-employed health insurance deduction. This means if you currently have individual policies that you're personally paying for, you can't simply have the S Corp reimburse you and get the tax benefits. The corporation needs to either be the policyholder or have a formal arrangement where it pays the premiums directly to the insurance company. Also, make sure you're not mixing this benefit with any health savings account (HSA) contributions if you have high-deductible health plans. The tax treatment can get complicated when you combine S Corp health insurance benefits with HSA contributions, so you'll want to coordinate these carefully to maximize your tax advantages. The unequal premium amounts between you and your partner really isn't uncommon - family vs. individual coverage naturally creates different costs, and the IRS doesn't expect or require equal dollar benefits for equal ownership percentages.

Great question! Based on your situation, I'd recommend having the 529 withdrawal made in your daughter's name (the beneficiary). Here's why this makes the most sense: Since your daughter will receive the 1098-T in her name and she's in a much lower tax bracket ($6K income vs your $190K), having the withdrawal recipient match the 1098-T recipient creates cleaner documentation. This is especially important if the IRS ever has questions about the qualified expenses. Also, if there's ever any miscalculation that results in a small non-qualified portion, the tax impact would be minimal on her return versus yours given the income difference. One timing tip: make sure you take the withdrawal in the same calendar year you're paying the tuition. Taking a December withdrawal for January tuition can create unnecessary complications. Keep detailed records matching your 529 withdrawals to the qualified expenses on the 1098-T. This documentation will be crucial if you're ever audited. The good news is that as long as you're using the funds for qualified education expenses, the withdrawal is completely tax-free regardless of whose name it's in.

Just wanted to add another perspective on this - I've been managing 529 withdrawals for three kids over the past few years, and I always go with having the withdrawal in the student's name. Beyond the tax benefits others have mentioned, there's also a practical advantage: if your daughter ever needs to provide documentation to the school's financial aid office about how expenses were paid, having everything in her name makes that process much smoother. One thing I learned the hard way with my first kid - make sure you understand exactly what counts as "qualified expenses" beyond just tuition. Books, supplies, and even a computer can qualify if it's required for coursework. Room and board qualify too, but as someone mentioned, they're capped at the school's official allowance amounts. I keep a folder (digital and physical) with all the receipts, the 1098-T, and the 529 statements together. It takes a few minutes of organization each semester, but it's saved me hours during tax season. The peace of mind knowing everything is properly documented is worth it, especially when you're dealing with tens of thousands of dollars in education expenses.

Great question! I went through something very similar last year when we switched from daycare to having my in-laws help out. You're absolutely right that grandparents are allowed as care providers for FSA purposes - they don't fall under the restrictions that apply to spouses or dependents under 19. Your approach sounds solid, but here are a few things that helped me avoid any issues: **Documentation tips:** - Have your mom include specific dates of service, hours of care (like "M-F 8am-6pm"), and a note that care was provided to enable both parents to work - Make sure the invoice has her full name, address, and SSN/Tax ID - Pay by check or electronic transfer so you have a clear paper trail **Timing considerations:** - Make sure you pay her and submit for reimbursement before Dec 31st for this year's FSA - The dates of service on her invoice should align with when you actually needed the care for work **Tax implications for your mom:** - She'll report this as income (likely on Schedule C if it's occasional, or as household employee income if regular) - If she's on Social Security, this extra income might affect the taxability of her benefits depending on her total income - She may need to make an estimated tax payment if this pushes her over the threshold for owing taxes Since you're only doing $1,250 and it sounds like a one-time arrangement, you should be well under the $2,700 household employee threshold, so no employment tax complications for you. The process really is pretty straightforward - just make sure the paperwork is clean and professional-looking. Good luck!

One additional tip that saved me some headaches - when you have your mom create that invoice, make sure she keeps a copy for her own records and consider having her send it from an email address rather than just handing you a paper copy. Some FSA administrators prefer electronic documentation, and having an email trail can help establish the date the invoice was created if there are any timing questions later. Also, since you mentioned this is mid-year and you're trying to use up remaining FSA funds, double-check with your FSA administrator about their specific reimbursement timeline. Some take 2-3 weeks to process claims, especially near year-end when everyone's rushing to use their funds. You'll want to make sure you submit everything with enough time for processing before any plan deadlines. The arrangement you've described is totally legitimate and common - lots of families make similar switches when daycare situations change. Just keep good records and you should be all set!