How to report RSU withheld to pay for taxes?

Forum|Forum|6 years ago
June 3, 2019
2 replies
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Let's say 100 shares of my RSU vested in 2017, and 30 shares of it were withheld to pay for taxes. Assume each share worths $10 and my base salary is $60000. So I got 70 shares, which worth 70 * 10 = $700 and my total income on w2 becomes 60000 + 700 = $60700. If I use w2 in Turbotax then I need to pay taxes on all of $60700, but I already payed the taxes for the $700, right? Where in the Turbotax I can indicate that I already payed the taxes for the $700? If I don't indicate that I will be double taxed on the $700, right? I am using Turbotax premium and didn't sell any of the 70 shares.

Thanks!

TurboTax Premier Online

Best answer by ToddL

If they sold 30 shares for $700 to pay your taxes, then that $700 (or most of it) would also be included in Box 2, Federal Taxes Withheld of Form W-2 (some portion may be in Boxes 4 and 6 for your SS and Medicare Tax).

This is a "sell to cover" exercise, where you sell only enough shares to cover the option costs, fees (fees, if any) and applicable taxes. The proceeds of the 30 shares are reported as income (Box 1 of W-2) and applied to taxes withheld and option costs/fees (if any).

ToddLAnswer

Employee

aghosh03

What if the taxes withheld in the W2 do not include the amount from shares sold for sell-to-cover? Do I have to ask my employer for a corrected W2 or can I make the adjustment in a form using TurboTax?

kwell1208

Where in Turbo tax do I report the RSUs released to me because of vesting as income? What if I did not receive a tax document to reflect this activity? My brokerage statement reflects activity and shares sold to have taxes withheld on the transaction. Should I report all of this even though I do not have a 1099 B?

AmyC

Employee

No. I think you received RSU due to vesting. Once it vests, you own the stock The fair market value of the stock is reported as ordinary income, usually in box 1 of your W2. This is already reported for you, on your W2. This was the easy part, stay tuned.

When you decide to sell the stock down the road:

you will receive a 1099-B which will report the sale.
you have to know how much was added into this year's box 1 wages to use as your basis for the sale.

I want to urge you to create a financial notebook that is kept separate from your tax return. Keep it safe and each year, add your year-end statements from all your financial accounts plus a copy of your W2’s. This will protect you down the road as proof of your basis in your various investments. As you go through life, rollovers, RSU sales, and more will be captured for you.

@kwell1208

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Grace1991

Help - ADP W-2 Assistant said my RSU earnings (Gross) were incorporated in the W-2 already. However, the RSU tax withheld was not recorded in the W-2.

I checked e-Trade, and it said they do not issue any 1099-B related to our investment account.

So where on earth should I report this tax withheld?? Please help!!!!