How to fix RSU under-withholding

[darkstar10]

Hi, I have had RSUs vest in 2021 and from what I understand, the IRS withholding for supplemental income is a flat 22%. I am above the 22% bracket and I probably owe more taxes on the RSU income than what was withheld. I haven't sold any RSUs yet, so I don't have a 1099-B.

Is there a way to accurately calculate the extra tax I owe in TurboTax? Will the tool tell me if I owe any extra taxes after I'm done with entering all the information? Even if I arrive at a figure that I owe by manual calculations, how do I verify that it's correct? Will the IRS inform me in case of under-payment or refund me if I overpay?

[HelenC12 · Accepted solution]

The IRS won't inform you if you under paid the tax on your RSU's at the time you received the proceeds. When you're filling out your tax return, if you under pay, TurboTax will calculate the amount of underpayment (amount you owe). If you over pay, TurboTax will calculate a refund.

Per IRS: Generally, most taxpayers will avoid this penalty if they either:

• owe less than $1,000 in tax after subtracting their withholding and refundable credits, or
• if they paid withholding and estimated tax of at least 90% of the tax for the current year or 100% of the tax shown on the return for the prior year, whichever is smaller.

How should you figure what you owe? Please see Estimated Taxes: How to Determine What to pay and when.