ISO increase federal tax own.

[sam5985]

My federal tax refund is $1028. I enter the info of ISO (restricted stock option) for the year. I don't sell any of the ISO for this year. Now Turbo Tax shows I own about 2K in federal. I thought all of the ISO tax liability were taking care of at the time the company gave me the share as they had sold some share to pay for tax. What is the reason for the change in the tax own?

[HelenC12 · Accepted solution]

Since the gain on that stock sale was included as income on your W-2, you're getting taxed twice. To avoid double taxation:

• You will need to change the stock basis on the date of the sale, to the price on the date of sale.  
• The result is zero gain or a minor loss due to brokers commission/fees.  
• The IRS will expect to see that information on your tax return.  

To enter your 1099-B form, see Where do I enter a 1099-B?

For additional information, see the TurboTax article: Non-Qualified Stock Options.

[sam5985]

Thank you.