Get your taxes done using TurboTax

You do need to adjust the cost basis on the Form 1099-B to reflect the income reported on your W-2 form. If the additional income reported in box 1 on your W-2 form is all from the sale of the stock reported on the Form 1099, then you can add that income to the cost basis on the 1099-B form if it isn't already listed there. You will see an option that says The cost basis is incorrect or missing on my 1099-B when you enter the stock sale information reported on your 1099-B form:

Choose that option and on another screen you will see where you can enter the correct cost basis:

This is a common entry so it won't attract negative attention from the IRS.