Box 14 W2 RSU other

[huonglavender]

w2 box 14  The company paid tax for RSU restricted stock units.  It is important that Turbotax allows to enter RSU and the amount in box 14. The system wants me to enter Other.  I do not think that is correct.  RSU must appear on the screen as it is printed on W2 box 14.  Company sold RSU shares to pay for federal income tax. Please review box 14 and discuss with CPA about this issue.

[TomYoung]

You are wrong in your assertions.

First, Box 14 on the W-2 is, in the main, only a "memo" box.  It's a box where the employer provides some additional information to the employee about what the employee is seeing on the W-2.  Generally entering Box 14 information, or not, does not affect your income tax return.

Second, Box 14 in this case should be reporting the compensation created by the vesting of the RSU, not the taxes withheld.

Third, your employer almost certainly did not pay the "employee" portion of any taxes withheld.  Almost certainly "you" paid those taxes and "you" paid those taxes by selling some of the stock you received.  The cash raised by the sale of stock "for taxes" gets passed back to your employer, who pays the government(s), and those payments are included on the various "taxes" boxes of the W-2, though these amounts are typically not separately reported to you in Box 14.

IF you somehow think that these taxes need to be reported again somewhere in your income tax return, (which you can't do), because your tax liability increases dramatically when you enter the sale of the stocks "for taxes" in your income tax return THEN your problem is that you are using the wrong basis in reporting the sale.  The correct basis is not the $0 the broker is almost certainly reporting on the 1099-B, the correct per share basis is the same as the per share "fair market value" used by your employer in calculating the compensation created by the vesting.

Tom Young

[esoetjahja]

How and where to add the adjustment of vested RSU cost basis when part of your vested shares already taken as tax ? Is this just a matter of reporting to IRS or actually can change your amount owed ? For my case is same day sale.

Under investment section ? or modify directly to box 2 (Fed Income withheld) - under W 2 section which I believe is not the right way ?

Thanks in advance !

[WeiguoLiu]

Your reply is very informational. But it is odd that turbo tax does not recognize RSU and replace it with Other.

[hudsoncaldwell]

Box 14 has 14-Description, 14-Amount, Category

Company provides RSU and PSU and converts the amount into stock

While vesting, a portion of stock is sold by company and paid as tax.  Remaining stocks are transferred to the account.

Now W2 has 14-Description as RSU PSU, 14-Amount as $$$ (Value before tax), What is the Category need to be entered in TurboTax

[AmyC]

The amount in box 14  should already be included with your box 1 wages. 

Box 14 has some state specific information that gets carried but for RSU - it is just other information. It does not affect your tax return in this location. It has a great impact and must be added to the basis of your stock. 

I want to urge you to create a financial notebook that is kept separate from your tax return. Keep it safe and each year, add your year-end statements from all your financial accounts plus a copy of your W2’s, your  carryover information, and proof of your basis in your various investments. You must keep tax records  from the time you purchase until sold/ loss used plus 3 years. It is very easy to lose track of disallowed losses, carryforwards,  and basis.

This can be a digital or paper notebook.

@hudsoncaldwell