Hello!
I sold some RSUs in 2022 and received the requisite 1099b from my brokerage. RSU value was included as compensation at the time of vesting in 2019 on my w-2 for that tax year. I fixed my cost basis using the supplemental form received from my brokerage, and went through the prompts to enter shares vested (6) and shares traded/withheld to pay taxes (2). However, when I enter in the number of shares withheld for tax it actually increases my tax liability. How can this be? If 2 shares were sold to pay taxes why would I owe more than if no shares were? Could it be because shares sold to pay taxes count toward income but are not included as part of the W2 portion typically and so I pay taxes on them when sold?
I've gotten some good information thus far on the forums already about what RSUs are and how taxes work, but nothing on why I'm seeing this specific scenario.
Thanks!
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Yes. If the price per share you sold at was higher than the price per share when vested (acquisition cost) then there will be a gain that you pay taxes on. To go back to the beginning, you paid taxes on the value of the stock when vested as part of your W2 in that tax year. Now that you are selling the stock(s) you pay taxes on the gain from the sale (value increased since vested).
Be sure you are using the correct cost basis from the vesting date of the shares. So if there was a gain on the sale your tax would be higher than if you didn't show a sale.
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