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Restricted Stock Units (RSU) and TurboTax: Net Issuance

Please validate the above. I am full-time and Careers Upload a File Locations. The taxes reported in W-2 covers both shares withheld for taxes and reminding shares. Box 1—Wages, tips, other compensation. Do this for each entry on the B. I do not think these were included in my W2 income.

Employer stock sales on both W-2 and are double counted and taxed. On my W-2, my employer reported income from the sale of stock options, non-qualified stock, and restricted stock units. Separately, I received s and entered information for the these sales into TurboTax.

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In Net Issuance you never saw the 13 shares. You only report what you sold. If you sold 1 share you use the compensation element for 1 share. If you sold 2 shares you use the compensation element for 2 shares. Your W-2 or paystub had 47 shares is really beside the point. Hi, this is still confusing to me. My company sells to cover taxes through the e-trade broker and form shows both, virtually everything. When I imported the form in TT, I then need to account for which is what.

The confusing part is though that w2 also reports everything but the sum is different and they do not match, the reports lower than w2. So when I tell TT which of the shares reported on were used for taxes, is it correct if for the ones used for taxes I report it like this? Then for the remaining 17 I do: Also see comment above from Cindy for sell-to-cover. A sell is a sell. It makes TT confused for some reason. You will only confuse yourself if you do. Have you seen this happen as well?

Maybe it should drop because you entered it wrong before. What was the per-share price when the shares vested? What was the basis reported by your broker divided by the number of shares you sold?

I followed a few threads on the TT support pages and found that the best answer is to follow the interview and just tell TT that the amount included on the W2 matches the amount that TT calculates even though it is higher in W2. I tried to enter a sale of 0 shares and include the share that vested and it then matched my W2 and the end refund number ended up the same, so I feel good telling TT that the number on W2 matches the partial calculation.

Hi, correct me if I am wrong that in this case we only need to pay taxes on gains and when Turbotax asks if this amount is included in W2 then we need to choose that yes it is included in wages section of W2? Thanks for your explanation. They appear on my W2 in box 12, code V as exercised stock options.

Hi Harry — Thanks for this article! Do you know a way to find out which RSU grants were associated with each sale. My call to ETrade yielded nothing — I will try again. Considering the insights you provided in the article I thought you might have some guidance. But if IRS gets B, it would seem that they would want instead of me adjusting the basis which would cause inconsistency with B? Or will TurboTax report this correctly anyway? Should be entering the total of 34 shares that were vested or the 21 that were granted to me after withholding taxes.

I ended up selling all the 21 shares in Dec and need to figure out what to report. In-dependent of this, the cost basis is still being calculated on the 21 shares that I sold. Thank you, very helpful. And the only person that gains from these secrets is the government from getting a lot more of my tax money than I can afford. So glad you updated this for the current year also, made it very easy to follow along.

I am wondering if this means I must adjust the cost basis provided on my B for my RSU sales which are specified as not including the compensation portion.

I did not pay a price to acquire shares they were granted. Also, if there is a missing compensation element, how do I calculate it?

Janessa — In RSUs your acquisition cost is zero. Your compensation component is the per-share price at time of vesting times the number of shares sold. Thank you Harry for the quick response. The taxes reported in W-2 covers both shares withheld for taxes and reminding shares.

You mentioned we do not need to do anything specially for shares withheld for taxes portion in our tax return. If we do not do anything for this. David — Take a step back and forget all these about shares. What problem will it cause if the answer is yes but RSU is not noticed in Box 12?

David — Again, think cash bonus. You just say you were paid total X and you had total Y withheld. How do you know whether the number of shares withheld is correct? If it was too much you get a refund when you file your taxes. If it was too little you pay the difference when you file your taxes.

Hence, there are different vesting dates and vesting price per share. The only problem is that the step-by-step guide only allows me to enter 1 vesting price per share for the entire RSU sale transaction. How do I go about this so I can enter in TurboTax my real cost basis for each vesting? Dee — Just as the screenshots shown in this article, one row for each vesting? My ex employer reported both vested and released shares. My company was bought out this December I sold non-qualifying stock options prior to my company being bought out.

These shares were included in my W2 income and taxed at that rate. Thereafter, the remainder of my restricted shares not included in W2 were vested and paid out. According to company documentation, of these new shares had taxes withheld. I do not think these were included in my W2 income. Another shares did not have taxes withheld.

From my understanding, all of it needs to be placed in the Sale of Stocks portion of my software. If the B you received only had your strike price times as the cost basis, you will need to adjust it higher to the full price times the number of shares. Even though it was for ESPP, the adjustment part is similar.

You received the remaining shares. If you received a B for any sales, look carefully to make sure the cost basis is the price on the vesting date times the number of shares sold. If not, you will have to adjust again. The included help in TaxCut was nearly useless, and of course I received no help from my employer. Your explanation made short work of the confusion. I find this very odd. I am trying to understand how so? So TurboTax says I have to pay taxes on the income. My brokerage account shows the shares sold to cover the taxes for vested shares and tax amount.

I am trying to figure out how to enter this amount as paid taxes in Turbo Tax. If you can prove it, contact your employer and tell them they did it wrong. TX is my domicile and my wife remains a VA resident….. Maybe ask Virginia Department of Taxation?

Harry thank you for helping so many people on this forum. I have been spinning my wheels on this forever and hope you can help because Turbo Tax support is not helping. I just need some validation on this…. Please validate the above. Where would I mention that these are RSUs then?

I have been granted RSUs in On my W2 I am showing the RSU non cash taxable income for all five years in those 3 categories and taxed paid in those categories from RSU withheld for taxes. How do I account for this on my ? You saved my almost big mistake. My HR was not helpful in this area and E-trade can not comment of your taxes.

I was at a loss till I found your post. Also TurboTax works the same but new screenshots would be necessary. My situation is a bit different. My employer was acquired during the time-frame when my RSUs vested.

They claim that the transaction is captured on W2, and no other tax forms are needed for this transaction. Does this seem accurate? Has anyone been in this situation? How will the IRS know that the employer withheld correct number of shares for tax purposes, since W2 neither shows the number of shares, nor the price per share? If too many shares were withheld you get more back as a tax refund. In other words, do I need to go through the steps described in this topic, or simply entering W2 details will be enough?

How exactly is it reported on the W-2? Is it in box 12v or should it be in box 14 Other? What tax rate is used? Following the TurboTax step-by-step procedure was creating a mess asking questions regarding vesting, share price, etc. Hi, I wonder if you could help. Can you please explain? In this case, how do I fill in using Turbo Tax? First contact your employer to find out what the 55 shares were. No one else would know besides yourself and your employer.

This blog post here is only about net issuance. If the sale involved multiple lots you will have to get the information for each lot. Dude, your post really helped! My company provided me RSUs accrued over a 3 year period , they all became vested , and they held back for taxes. I sold the remaining shares the day after vesting. There is nowhere in TurboTax to enter in the shares held back to pay the taxes, or the taxes that were paid on the RSUs. I also do not see these taxes included anywhere on my W2s, so where do I enter this info, or do I need to?

Since the taxes for the RSUs on the shares were paid for with the shares, is every dollar received on the shares sold, also taxable as income?

Both questions were addressed in the post if you follow along with your own numbers. The value of the shares withheld for taxes were already included in the W Nothing extra to do there. If you imported the , click on Edit and put the basis in. Or delete it and manually enter it as the screenshots show. These tips are highly appreciated. The imported e-Trade form leaves this info out — but does show it in their supplemental pages on their website. Your email address will not be published.

Notify me of follow-up comments. Send me future articles by e-mail. Comments This was a great post. Thanks for the help and the laughs!

And let us know as you expand blog posts on RSUs!!! Thank you so much for your post. Your post is more helpful than any of the supports TT provides.

I have exactly the same question as Emily above: I have 2 questions I have a situation where a total of RSUs from 3 different grants vested Sept employer withheld shares for tax and distributed shares to me. I ended up selling all these shares on Jan 9 If you insist, the tip jar. Just enter your W-2 as-is. Thanks for your help. How do I do this in version of TurboTax? It looks completely different. You can then type in all the info for the RSUs. I appreciate your time. Thanks for the great guide!

This seemed the best solution out of all of them. I completely understand my situation. Hi, Thanks for your explanation. You are in luck.

I totally missed expanding on the sale. Thanks for your writeup. Do you know how to handle ESPP disqualifying dispositions? Doing tech support for TurboTax again. I just wrote it up here: This is indeed a great summary for many people who are doing it the first time like myself.

Thanks for all your help. Hi Harry; Thank you so much for your article. I have questions related to the shares withheld for taxes portion in Net Issuance. Here are two examples. Thanks for the post. Hi, My ex employer reported both vested and released shares. Ko — You had two different events. I assume that my calculations are good, then. This has been very helpful. Harry, Thanks so much. Harry, thanks so much for the detailed steps and explanation.

Just to follow up on my previous question. Harry, your detailed steps and explanation still useful here in According to "The Payroll Source," a qualifying disposition is a stock sale that meets two specific conditions.

First, the stock sale cannot occur less than two years after the point in which the employee is given the option to buy the stock even if he does not immediately do so at the time of eligibility.

The other requirement is that the stock must be held for at least a year after the stock is purchased. For example, if an employee becomes eligible to buy the stock in January and does so in March , he would have to hold the stock until March for any sale to be a qualifying disposition. This is because the two year eligibility requirement would lapse in January and the one year holding requirement would be met in March The advantage to selling as a qualifying disposition is that the income is not reported on the W-2 as taxable income and is simply taxed at the capital gains rate which is typically lower than it would be for standard income.

If either of the two conditions mentioned by "The Payroll Source" are not met, the sale is a disqualifying disposition. The income that is realized by the employee must be reported in box 1 of the W Box 1 is the federal income taxable. Disqualifying dispositions are not subject to Social Security or Medicare tax. As such, the amount of the benefit should never be reported in box 3 or 5.

The amount of the disposition is usually posted in box 14 and notated as "ESPP. Whether or not the employee that exercised and subsequently sold the stock is terminated is not relevant as it relates to how the W-2 reporting is handled. If the employee does not meet the required holding requirements noted by "The Payroll Source," then the income must be reported on the W-2 as taxable for federal income tax but no withholding should be done when the amount is recorded.

Ryan Donovan has worked in payroll and human resources since

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Review Boxes 12 and 14 as they list any income included on Form W-2 related to your employee stock options. Form B You will receive . From through , brokers had the option of making this adjustment for the employee and reporting the correct cost basis on Form B. Under the new rules, brokers cannot make this adjustment on shares acquired on or after Jan. 1, , through an employee stock option or purchase plan. On my W2, in box(other) there is an amount of RSU Stock reported, which the amount is included as income in Box-1, and also taxed. But I did-not sell any part of that RSU, it is sitting in my E-Trade account.