For these stock options, I had a strike price that was significantly lower than the exercise price when I sold. I will use some round numbers to give an example of my situation. The 1099-B indicates that my gross proceeds were about $47K. Since my strike price was lower than the selling price, I made a nice profit. The basis shows what I had to pay (sell some shares to buy all the shares). The basis was around $22K. So I had an income/profit of about $25K. My W2 shows this $25K profit as income, along with $5K Federal Income Tax ($2K SS Tax, $500 Medicare, $1.5K State Tax) So total deductions of about $8k were made from my profit of $25K - leaving me with a check from the broker of about $17K. If I leave things here, they seem right - I got credit for the income and all the taxes paid (Fed and State) in my W2 numbers. Here's the problem - now when I go back and enter the 1099-B for this transaction (amending my return), It says I owe an additional $5k in Federal taxes and $1.5K in state taxes. My income is now $25K higher (this is not accurate) than when just using my W2 info - and no additional taxes were listed (my 1099-B shows $0 taxes paid). It seems that entering the 1099-B accounts for the income from the sale twice.
