This is a great point that I hadn't considered. We've been together for over 10 years and have the kids together, but you're right that it's always smart to think about all scenarios. Do you know if such an agreement would have any impact on how the IRS views the gift? I want to make sure anything we do on the relationship side doesn't create tax complications.

An agreement about what happens to the gift in different scenarios shouldn't change how the IRS views the gift, as long as the gift is complete and no strings are attached at the time it's made. The key from a tax perspective is that you're not expecting anything in return. However, if the agreement makes the transfer look more like a loan or conditional payment rather than a gift, that could potentially create issues. Make sure any agreement you create clearly states that the transfer is a completed gift for tax purposes, and any terms about future scenarios don't make it conditional in a way that would undermine the gift status.

Recipients generally don't report gifts as income or file any special forms. It's only the giver who has to file Form 709 if the gift exceeds the annual exclusion amount (currently $17,000 per person). The girlfriend would just receive the money tax-free. This is one of the nice things about gifts - the recipient has no tax consequences or reporting requirements.

That's a great suggestion! I'll definitely check with our HR department. Do you still use the consultation even for "simpler" tax years, or only when something significant changes?

I use it every year because equity compensation has different considerations annually. For example, last year I needed advice on whether to sell some RSUs immediately upon vesting or hold them (tax implications of each). This year I needed help with ESPP disqualifying dispositions. Even in "simple" years, I've found they catch optimization opportunities I would have missed. Last year they identified a way to time some charitable contributions that saved me about $800 in taxes. The free hour pays for itself many times over.

TurboTax Premier has been pretty reliable for me with RSUs and options. Not perfect, but it has specific interview questions for equity compensation. The key is making sure you have the right forms from your broker - specifically the 1099-B needs to show adjusted cost basis for RSUs.

12 How do you get a Verification of Non-filing Letter though? Doesn't that also require contacting the IRS?

3 You can request a Verification of Non-filing Letter by using IRS Form 4506-T. Mark box 7 on the form to request the verification of non-filing, and you can either mail it in or fax it to the IRS. Some schools will also accept a signed statement certifying that you didn't file and weren't required to file, especially if you had no income that year. Every financial aid office handles these situations a bit differently, which is why it's important to speak directly with your school's aid counselors. They deal with these situations regularly and often have school-specific procedures that can save you time.

23 I used FreeTaxUSA for a 2020 return I had to file late. It was only like $15 for the federal return (state was another fee). The interface is less polished than TurboTax but it gets the job done and asks all the same questions. They keep prior year returns available which is nice.

Thanks for the insider perspective! Do you have any advice on the best way to approach management about fixing this issue? I don't want to come across as accusatory but I'm also worried about the tax implications for myself.

Frame it as a concern about your own tax liability rather than accusing them of doing something wrong. Something like: "I've been tracking my tips and noticed the amounts on my paystub are different from what I'm receiving. I'm concerned about potential tax issues when I file. Can we make sure the reported amounts match what I'm actually earning?" Most managers will correct the issue when approached this way. Document this conversation and any promises to fix it. If they refuse to correct it, that's a red flag that they might be intentionally underreporting to save on taxes, which puts you at risk. In that case, you might need to consider whether this is a place you want to continue working.

All tips are taxable income regardless of how you receive them. Whether you get them directly from customers or as tip-outs from other staff, the IRS considers them all taxable income. The only difference is who's responsible for reporting them. If your employer is including tip-outs on your paystub (even incorrectly), then they're treating them as "reported tips" which means they're handling the withholding. If you receive cash tip-outs that never go through the employer's system, those would be "unreported tips" that you need to track and report yourself.

Wait, I thought the Tax Cuts and Jobs Act eliminated unreimbursed employee business expenses completely for 2018-2025? Aren't we unable to claim those right now?

You're absolutely right, and I apologize for the misinformation. The Tax Cuts and Jobs Act suspended miscellaneous itemized deductions subject to the 2% floor (including unreimbursed employee business expenses) for tax years 2018 through 2025. That's a really important correction - so currently the work-related education expenses would only be deductible if you're self-employed or if your employer reimburses you through an accountable plan. For employees paying out of pocket, the options are much more limited now until those provisions possibly return after 2025.

The Lifetime Learning Credit phases out at higher income levels though, right? I think around $80k for singles? Might not help if OP has a good job in their field already.