Thank you for your response, Tom. It was a cashless for cash excercise of NQSO, so I exercised my options and immediately sold the shares. This, as you indicated, created compensation to be reported on W-2.
As I stated earlier, neither the compensation nor the related tax withholding was included in W-2. I know this because 1) I double checked the form adding up all compensation received during the year 2) I confirmed with the payroll. Somehow, the reporting for the transaction fell through the cracks. They said it would take ADP more than a month to issue a corrected W-2. But I have only days to file my return before the extension runs out.
Indeed, some of the money was diverted to pay for federal, state and payroll taxes, with me getting the remainder. Also, when entering the related 1099-B in TurboTax, I do see a small loss for the sale due to commissions and fees.
I know how to report the compensation portion due to this NQSO exercise. How and where can I account for federal, state and payroll taxes that were withheld?
