How do I report RSUs sold only for taxes in TurboTax?

[cmilkosky]

Hi!  I haven't had to report anything tied to RSUs in the past.  My employer granted me RSU's this year and sold a portion of those for taxes on my behalf on the day they were issued/vested.  I received a form 1099-B from the brokerage that manages the RSUs and it shows:

- The quantity (Box 1a)

- Date acquired (Box 1b)

- Date sold (Box 1c)

- Proceeds (Box 1d)

- Cost or other basis (Box 1e)

"Proceeds" and "Cost or other basis" are non-zero and are within a few dollars of each other.  The line with those values shows "Short Term - Noncovered Securities* (Short-term transactions for which basis is not reported to the IRS -  Report on Form 8949, Part I, with Box B checked.)"

Some questions:

1. Do I still report this in TurboTax?  I never received money from this sale to cover taxes. 

2. I assume my employer (a very large company) took the money from this sale and paid the IRS.  Is this correct typically?

3. If I do report this 1099-B form in TurboTax, where do I report it and specifically how?  There's a place for "Did you sell any of these investments in 2023?"  If I say "Yes" and select "Stocks, Bonds, Mutual Funds", then skip the import (my specific brokerage name is not listed for imports), enter the brokerage, Continue, then I am asked "Do these sales include any employee stock?".  I did sell the RSUs, but it was only to cover taxes.  

4. Assuming the place in TT I mentioned in #3 was correct to enter this, I chose to enter the sales one by one (there was only one sale in 2023 to cover taxes and I did not sell anything else for myself), how come my Federal Tax Due did not decrease?  Do most employers report sales of RSUs to cover taxes in the main W2 already and this form 1099-B is for something else?

I just want to make sure this sale is not reflected incorrectly in my tax return for 2023 and I haven't had to report this before.  Any help on how specifically to enter in TurboTax is appreciated.  

Thanks!

[JohnW152]

It sounds like you're on the right track.  Yes, you do report this on your tax return. 

Your employer most likely sold enough shares to cover the tax withholding, but you'll need to confirm with your employer (or its payroll office).  You're probably not seeing a significant change to your tax due because, as you say, your proceeds and cost basis were very close -- very little actual gain was realized from the sale.

To enter this income in TurboTax Home & Business:

1. Open TurboTax
2. Select  Federal Taxes in the banner
3. Select  Wages & Income in the banner
4. Select  I'll choose what I work on
5. Scroll down to Investment Income and select Start or Review to the right of Stocks, Cryptocurrency, Mutual Funds, Bonds, Other
6. Select Yes on the Did you sell any of these investments in 2023? screen
7. Select Stocks, Bonds, Mutual Funds, then Continue
8. Select Skip Import
9. On the  Which bank or brokerage is on your 1099‑B? screen, enter your information and select Continue
10. Answer  Yes to Do these sales include any employee stock?  Answer Do you have more than three sales on your 1099‑B? appropriately, then select Continue
11. Input all relevant information

See the TurboTax blog How to Report RSUs or Stock Grants on Your Tax Return for more information.

[Cocovanilla]

I have the same inquiry and received Form 1099-B with note “Short Term - Noncovered Securities* (Short-term transactions for which basis is not reported to the IRS -  Report on Form 8949, Part I, with Box B checked.)".

A portion of the RSU was sold to cover tax and that’s it. When I followed your direction to input all the forms in Form 1099-B, the amount of tax owed increase significantly! On the given 1099-B, it states “Report on Form 8949, Part I, with Box B checked” so my assumption was that I shouldn’t input the amount under 1099-B and just go straight to Form 8949, however, when I click on Open Form, I can’t even edit Form 8949. What is the best approach? 

[Cocovanilla]

After several searching in this form, I understand why my federal tax due jumped significantly. The cost basis showed zero on Form 1099-B. I went to and download my RSU transaction statement for 2023 which listed the #’s of shares sold with the sale price. I entered zero for Cost Basis but selected “The cost basis is incorrect or missing on my 1099-B”. On the next page, I just selected the first option of “I found my adjusted cost basis” and added the calculated amount of shares sold * sales price per sale. The Proceeds and Costs Basis are nearly the same (although some are off by a few amount).

[Vipul]

Only way I was able to enter all the pertinent RSU related info is by doing the following:

1. Box1e cost basis left at $0

2. Check the 'The cost basis is incorrect or missing on my 1099‑B' box

Continue...

TT then gets me to "Next, we'll help you figure out your cost basis" window

Continue...

3. This screen is the key as you would select your employer that gave you the RSU's.  In my case, I selected 'An employer that has an existing W-2 on this return' and then selected my employer from the drop down menu.

Continue...

4. Next screen with 'Let's get some purchase info about this RSU sale', is where you would enter all the pertinent RSU sale related details from the 'EMPLOYEE STOCK PLAN RELEASE CONFIRMATION' from your broker.

Hope this helps.

Intuit really made it difficult to figure this out.  THUMBS DOWN!

[ThomasM125]

The restricted stock units (RSU's) are taxable income and as such the value of them is included in your salary wages (box 1), social security wages (box 3) and Medicare wages (box 5) on your W-2 form. Since you have to pay social security and Medicare taxes on the income, and also income taxes, some of the shares are sold by the company to pay those taxes. They are paid in by the company.

You need to report the sale of those shares to report any resulting gain or loss, but the gain or loss is minimal since you buy and sell them almost immediately. So, the gain on sale when your report the Form 1099-B in TurboTax should be minimal. Often, the Form 1099-B will report a minimal amount for the cost basis as you may have paid little or nothing to acquire the shares. However, the income reported on your W-2 form needs to be included in the cost basis of the shares sold, so you may need to adjust the cost basis reported on the Form 1099-B to compensate for that.

A simple way to determine the cost basis of your RSU shares sold is to divide the income for the RSU's as reported on your W-2 form, plus any additional money you may have spent to acquire them, by the number of shares acquired. That will give you the cost of the shares that you can then multiply by the number of shares sold to arrive at their cost basis.