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Your W-2 has two important pieces of information about your exercise of the stock options.
The withholding reported on the Form W-2 doesn't need to be entered anywhere else in your tax return. You get full credit for the tax withheld by reporting it on the W-2.
The income attributed to the grant is included in Box 1 of the W-2, and is used to calculate the cost basis for the sale reported on the 1099-B.
My work is telling me that this might not be the best way. They recommend using the 1099B form and enter as separate stocks which I did. I did not remove the money in "V" so the tax owed by me jumped significantly. My thought is that I keep the money in the stock section and remove it in the W2 area. Is that correct??
@jfurukaw The amount you are being taxed on your W-2 is the 'discount' you received as an employee (15% average), when you exercised your option to purchase stock.
The 1099-B shows the Sales Proceeds from the actual stock price when the stock was sold, so you need to enter both your W-2 and the 1099-B.
You will need to adjust the Cost Basis on your 1099-B when you enter it to match what you actually paid for your stock, which may be the reason your tax goes up.
Click this link for detailed info on How to Enter 1099-B for Employee Stock.
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