Minimizing Tax implications for selling RSUs

[mjspenn96]

I have approximately $ 200,000 in RSUs that have already vested. Fortunately, they are in the green. If I wanted to sell $50,000 worth, what would be the amount of taxes I would have to pay? My wife and I file jointly, and we make approximately $ 400,000 a year combined.

[dev145]

Amount of the tax that you have to pay will depend on type of gain. Is it short term gain or long term gain? Will you have any other capital losses or carry over losses that you can use to reduce RSU gain?

Any short term capital gain will be taxed at your regular income tax rate ( 10% to 37%). Any long term capital gain tax rate can be either 0%, 15% or 20%.  It is hard to say which long term capital gain tax rate you will fall under without knowing your total other income or deductions. But here is a IRS link about tax brackets. 

https://www.irs.gov/taxtopics/tc409

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Regards,
TurboTax Expert

[evelynm]

Turbo Tax has a great tax calculator tool that will be great in assisting with estimating your taxes:   TurboTax Tax calculator 

Also, you may want to stay up to date with the Big Beautiful Bill - TurboTax Blog:  One Big Beautiful Bill 

Tax-reform-calculator 

Here is a great link on how to report RSU's in TurboTax:   How-to-report-RSU's-on-your-tax-return 

[Tax Hero Niki]

Hi mjspenn96,

When you say "sell $50k worth", are you considering your basis? Remember to consider your basis in the shares, as you will only be taxed on the gain-- the difference between the proceeds and the basis. 

[mjspenn96]

Our combined income is $400,000.   The vesting period is 5 years with an RSU that was awarded in 2019.  We do not have any capital losses.

[pk]

@mjspenn96 , agreeing with the answers and refs. of my colleagues @evelynm, @Tax Hero Niki  and @dev145 , I just wanted to add ( and as I see the situation):

1. Since the RSUs have vested over a period of X years, you have been taxed  and have a basis of each tranche  ( the yearly vested # ) that may be different.

2. You have already paid the ordinary tax on each of the vested tranches

3. Thus when you sell  a tranche ( or a part thereof ), your capital gain is only based on current price less basis.  Hence depending on the tranche ( or part thereof ) you sell, there may or may not be any gain to consider.

4. I am assuming that  your tax-home is US and the  RSUs are of a US entity

Does this help ?

[mjspenn96]

This helps a lot.  I didn't realize that I had already paid the taxes on the original amount.  I will have to check to see what the gain amount is and as a result what the long term capital gains tax amount would be.

[evelynm]

Check the brokerage that is holding the RSU's as they likely have a supplemental report reflecting the cost basis based on what was already reported/taxed through your wages.