Taxes withheld on stock options sold

[jonathan-willick]

When I sold my options it says taxes were with held but I don't see that when the forms were imported from Etrade it just shows the proceeds without the taxes withheld deducted and I can't find a box for that

[TomYoung · Accepted solution]

Those taxes have already been reported in your income tax return when you entered your W-2 information.  The cash raised by the sale of shares "for cash" is passed back to your employer, who pays the government(s) and then scatters those taxes among the various "tax" boxes of your W-2.  This amount is typically not reported to you separately as is the compensation created by exercise of the option (non-qualified option) or the sale of the stock (qualified option).  You can check with your payroll department to be sure.

IF the reason that you think that you need to report the taxes is because you believe the sale of the stock is double reporting income, THEN that's because you are using the wrong basis to report the sale.  Your basis in the stock is the same as the stock's "fair market value" on the date of exercise.  It's the same per share figure as the one used by your employer to calculate the compensation that's been reported to you.

Since this would be a "same day" sale then the typical result would be a small gain or loss due to selling commissions and fees.

Tom Young