GeorgeM777
Expert Alumni

Get your taxes done using TurboTax

To enter income as "other income" follow these steps:  

  1. Go to Income & Expenses, scroll down the page to the last item Less Common Income,
  2. Select Miscellaneous income, then from the list select Other reportable income
  3. You will have to enter the amount you earned plus a short description of the compensation. 

In TurboTax Online, here are the steps to follow to preview your Form 1040:

 

       Open or continue your return.

  1. Select Tax Tools in the left menu (if you don't see this, select the menu icon in the upper-left corner).
  2. With the Tax Tools menu open;
  3. Select Tools.
  4. Next, select View Tax Summary in the pop-up.
  5. Then Preview my 1040 in the left menu.
  6. Line 8 on Form 1040 is where you will find Other Income

Because you mentioned your disposition (sale) was a disqualifying disposition, the difference between the exercise price and the FMV of the stock on the date of exercise is considered ordinary income to the employee.   However, such income is not subject to Social Security tax or Medicare tax. 

 

Additionally, if the value you received upon sale was less than the FMV on the date of exercise, the income you recognized does not exceed the difference between the disposition price and the exercise price of the ISO stock.  And you are correct that this income is taxable in the year of disposition of the stock.

 

Do you have a gain from the sale of the ISO stock?  If so, such gain needs to be reported on Form 8949.  Thus, you will need to enter your purchase and sale information in the Investment Income category.  With that category window open, select Stocks, Cryptocurrency, Mutual Funds, etc

 

A possible reason you may not be seeing questions that directly relate to your ISO sales is because you may be trying to edit entries that you have already made.  If you start over from the beginning you will see questions that relate to ISO sales.  Thus, start the process as discussed in the above paragraph.  Across from Stocks, Cryptocurrency, Mutual Funds, etc you will see the Start button.  Clicking on Start triggers TurboTax into loading additional questions.  When you see the page Investment Sales Summary, click on Add more sales.  Respond to the questions that follow and you will see the option to select ISO.  

 

@anilk

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