Total RSU Amount on W2 vs RSU amount computed by Turbo Tax ( Desktop) is different

Forum|Forum|3 years ago
February 28, 2023
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I have scenario where I got 20 quantities Vested this year ( Say for total 100$ vested). W2 shows $ 100 gain

I have 2 lines in 1099 B

Line 1- Tax withheld and sold at the time of vesting ( Qty 8 - $40)

Line 2- I sold vested RSU within same year (Qty 12 - $60)

When I enter each line details, it asks for extra information like Total share vested, Total share withheld etc

At the end of summary it gives me Employee stock plan results but there it shows RSU amount computed as $200. It seems to be software bug when vesting and sell happen in same year because as I entered 2 lines

Is there workaround for this issue ? Would it double count total RSU amount ?

DavidD66

RSUs are pretty straight forward; therefore, I recommend you enter your transactions without indicating you are reporting the sale of company stock. When RSUs vest (the stock is delivered) the entire amount is ordinary income. Your employer must collect payroll taxes, or sell shares to pay it. Since you are taxed on the entire amount, you basis is the amount that is added to your W-2 which you are taxed on. If you retain the stock, any gains on the sale will be short term if you hold the stock one year or less, and long term if you hold it more than one year.

You will have two transactions. The cost basis (per share) and acquisition date will be the same for both transactions, and they will both be short term. The proceeds and sales date will be whatever is reported on the 1099-B.

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RichTR1

I have the same issue however imported 1099 from Morgan Stanley with RSUs in there. I walked through each RSU sale and corrected the cost basis (etc.) after entering all the data TurboT shows a page of "Your Employee Stock Plan Results". It states "Amount We Computed" was $88K however the total value of my RSU's was about $33K. Then it ask "Is this income included in wages? If I answer "YES" (even though it is incorrect) the tax due is fine as my RSUs were sold at an actual loss from the Market Value of the shares at time of release. However, if I answer "No" my tax due goes up by $22K. My W-2 includes the $33K of RSUs in my Gross Pay. However where is Turbo tax coming up with this $88K Computed value? THIS IS A BUG AN NEEDS TO BE FIXED! My work around plan is to just answer "YES" and move on.

GeorgeM777

Perhaps the reason why the total value of your RSUs is so inflated could be that your per share market price is incorrect. The per share market price is entered from the screen Enter Vesting (or Release) Information. So you might consider going back to that screen and reviewing your entries.

In the alternative, as it appears you know all of the relevant information about your RSUs, you might consider entering the RSUs as you would a regular stock transaction. Thus, the vesting date would be your purchase date, and the per share market price on the vesting date would be your per share cost basis. Usually, but not always, the market price for the RSUs that were sold to cover the tax withholding, is also the market price for your RSUs when determining the cost basis.

There is no need to be concerned with reporting the RSUs as compensation income, and neither the tax withholding, as such amounts should have already been reported on your W-2.

@RichTR1

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