Wait really? I've never heard of state gift taxes before. I live in California and give my kids money every year. Do I need to be filing something with the state? Now I'm worried I've been doing this wrong for years...

You don't need to worry about California - they don't have a state gift tax. Connecticut is currently the only state with a specific gift tax. Previously, Tennessee had one but they phased it out. However, some states do have inheritance taxes that the recipient might pay, though these typically exempt immediate family members and have various thresholds. For regular gifts to your kids in California, there's no additional state filing requirement beyond what's required federally (which is nothing if you're under the annual exclusion amount).

This is really helpful! My daughter is starting college next year and my parents want to help. Does this mean they could pay her tuition directly to the school AND give her gift money up to the limit without any tax issues? Would this work for her dorm costs too or just tuition?

Yes, your parents can absolutely pay your daughter's tuition directly to the educational institution AND still give her up to the annual gift exclusion amount ($17,000 for 2024) with no gift tax consequences! This is a great strategy for education funding. For the second question, the unlimited education exclusion typically covers tuition only, not room and board/dorm costs or books. Those additional expenses would need to come from either the regular cash gift (within the annual exclusion amount) or other resources. The IRS is quite specific that the education exception only applies to direct tuition payments to qualifying educational institutions.

Thanks for sharing your experience! What exactly is an Acceptance Agent and how do I find one in Warsaw? Also, did ETH Denver (or equivalent in your case) actually agree to the extension when you asked?

An Acceptance Agent is someone authorized by the IRS to verify identification documents for ITIN applications. They can certify your original documents so you don't have to mail them to the IRS. You can find a list of international agents on the IRS website - search for "acceptance agents abroad" and filter for Poland. The tech competition in my case did agree to a 45-day extension. They were understanding once I showed them documentation that I had started the TIN application process. I found that being transparent about the timeline and keeping them updated regularly made them more willing to work with me. I sent them the receipt from the Acceptance Agent as proof that I had actually started the process, which helped a lot.

That's not correct advice at all. State ID numbers are completely different from federal taxpayer identification numbers and aren't recognized for federal tax treaty purposes. Either your cousin misunderstood what happened or the organizers made a mistake. Using a state ID in place of a TIN on W-8BEN could actually create bigger problems down the road when the IRS reviews the withholding.

That's really good advice - I wouldn't have thought about the certified mail option. Did your roommate eventually get her refund after all that trouble? And did she have to pay any penalties for filing incorrectly the first time?

She did finally get her refund about 7 months after submitting the amended return, but the IRS actually adjusted the amount slightly based on some tax treaty provisions that applied to her specific country. They didn't charge any penalties or interest since it was clearly just a mistake about which form to use rather than trying to evade taxes or anything. One other tip she learned: call the IRS International Taxpayer line at 267-941-1000 instead of the regular number. They're more familiar with non-resident issues and J1 visa situations specifically. Though getting through is still a nightmare unless you use one of those line-cutting services mentioned above.

This is great advice! I work at a university international student office, and we offer free tax help specifically for situations like this. Most large universities with international programs have resources to help with non-resident tax issues. One thing I should clarify though - the 1040-X form is only for amending a tax return if you're a US citizen or resident alien. As a non-resident alien on J1, you actually need to file a 1040-NR with a statement attached explaining the error. The amendment process is slightly different for non-residents.

I use the simplified method for my Etsy shop and it's so much easier than tracking all those expenses. But remember you still need a space that's EXCLUSIVELY for business use. I converted a small closet (about one-sixth of my apartment's square footage) to store inventory and take product photos, and I only claim that area.

Good point! Do states typically have the same 3-year refund window as federal? And would penalties be similar if I did end up owing?

Many states follow the same 3-year refund window as the federal government, but there are definitely exceptions. For instance, some states like California can look back and collect for much longer periods than the IRS typically does. Regarding penalties, they vary widely by state. Some states have lower penalty rates than federal, while others can be more aggressive with collections for even small amounts. It's definitely worth checking your specific state's department of revenue website or calling them directly. In my experience, state tax agencies are actually often easier to reach by phone than the IRS.

This is accurate. I work in a financial aid office, and we do occasionally request tax transcripts for verification purposes. While we primarily use the prior-prior year for determination, having unfiled taxes can sometimes create issues during verification or if there are special circumstances reviews.