I am a US citizen resident in USA employed by a foreign entity. I was allotted stock options in 2022 which I exercised in 2023. At the time of exercise, the employer deducted tax based on fair market value and exercise price. My W2 excludes this notional income. Do I need to add this income while filing taxes? Under what category? And how do I report the taxes they deducted before exercising the stock. Note that I have not sold the stock so this is about income tax and not capital gains if that arises on sale, which I know I will have to pay taxes at the time of sale.
