Here is how you should report this in TurboTax correctly so you won't get charged for the added income.
- To remove the $500 from your taxable wages:
- Go to Wages & Income > Less Common Income > Miscellaneous Income.
- Select Other reportable income.
- Enter a description like: "W-2 Adjustment - Foreign Source RSU (Rev. Proc. 2004-37)".
- Enter the amount as a negative number (e.g., -500).
- This pulls the $500 out of your Adjusted Gross Income (AGI) on Line 1 of your 1040.
Since you are adjusting a W-2, you must attach a statement to your return.
- The name of the employer.
- The total RSU grant amount.
- The calculation of the US vs. UK work days during the vesting period.
- Reference to Article 14 (Income from Employment) of the US-UK Tax Treaty.
TurboTax does not support the filing of attachments. After completion, you will need to print and mail your return in accordance with the mailing and filing instructions TurboTax provides.
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