Why my refund went down a lot after entering my RSU details ?

[taxpayer4]

I imported my W-2 into Turbotax premier software. and I see a refund of 5000 (federal), and 4000 (state). But as soon as I enter my Investment Income (from ETrade) my refund went down dramatically to 2000 (Federal), 2000 (State). (I changed the numbers for readiability).

My situation is last year my company vested RSU's. Before vesting they sold stocks for tax purposes (~40%. which means I paid tax right ?), and I DIDN'T sell any of my RSU's.

But when I enter this information why my refund went down so much ? I thought I will get more as soon as enter this information. 

I'm filing as Married and Filing jointly

[TomYoung · Accepted solution]

" I DIDN'T sell any of my RSU's"

The moment the RSUs vest YOU own ALL the stock in the grant so only "you" can sell the stock.  If you look at the original documents you received and probably signed when the RSUs were granted you might have allowed the company to sell some of the stock "for taxes", but you owned the stock that was sold and got a 1099-B, (I assume). 

Your problem is that you are using the WRONG BASIS when you enter the sale.  The broker is only obligated to provide the "out of pocket" cost of the stock you acquired and that's typically $0 for RSUs, but that's not the correct basis.  The correct basis, per share is: (Compensation reported on the W-2 for the vesting)/(GROSS number of shares in the grant).  That's the basis to use.  For a "same day" sale the typical result is a small loss due to selling commissions and fees.

Enter the 1099-B as it reads.  Then click the blue "I'll enter additional info" button and on the new page that comes up enter the correct basis.

Tom Young