484784
Some RSU were sold to cover tax on the vesting date, but the total vested amount still seems to contribute to my annual gross income and taxable. It seems like I’m paying taxes for both the vesting of my RSU on vesting date plus the total RSU amount as income on my W2 even though I did not sell any additional RSU throughout the year.
Appreciate any help.
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It depends. It is considered a capital transaction, however, so it will be reported. Although the value of the RSU was originally reported as income on your W2 (and became the basis price of the stock involved), when you sell the stock for any reason, that is a separate transaction reported on Form 1099-B. You will need to report the transaction.
It is likely that the 1099-B does not show the correct basis, however (might say $0). If this is the case, you must enter in the transaction as it is reported to you (with a basis of $0), and then, at the bottom of the 1099-B screen, click on the button "I'll enter my own adjustments" . On the next screen, scroll down towards the bottom to Cost Basis Adjustment and enter the amount of basis provided on your RSU worksheet (hopefully Form 3922).
You may then show a small capital gain, or even a capital loss. If a gain, you may have a small increase in your tax. If a loss, your taxes decrease. Either way, you are reporting the transaction correctly for the IRS and tax purposes.
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