Why sign in to the Community?

  • Submit a question
  • Check your notifications
Sign in to the Community or Sign in to TurboTax and start working on your taxes
Level 2
posted Apr 1, 2023 6:34:53 AM

I exercised NSO stock options in 2022. Wondering how to enter that in TurboTax Desktop Home & Business. I was a contractor, not employee, so no W2 and they were not ISOs.

I don't see how or where to enter those in the desktop product. Appreciate any help. Thank you!

0 3 430
3 Replies
Expert Alumni
Apr 3, 2023 5:41:04 PM

If you are a contractor that reports your business income and expenses on Schedule C, you would include the bargain element of the non-qualified stock options in your Gross Receipts on line 1 of Schedule C.   The bargain element is spread between the option price you paid, and the value of the underlying stock at the time of exercise.  

Level 2
Apr 4, 2023 4:53:52 AM

Thank you. Is there a particular place where I should enter that using Desktop Business & Home edition? Or should i just enter the number directly into the form?

Expert Alumni
Apr 4, 2023 7:39:48 AM

You do have the option of entering the bargain element (i.e., the difference between the option exercise price and the market value of the stock at the time of exercise) while in Forms mode; however, the preferred method is to use the step-by-step process.  Thus, select the Business tab, and then while in the Business Income and Expenses section, scroll down to Business Income.  Here are the remaining steps:

 

  1. At Business Income, select Start or Update
  2. On the next screen you will have the option of selecting the character of your business income.  Given the income you need to report, you might consider the General Income option.
  3. Next you can enter a description and the amount of your bargain element income. 
  4. Then just continue through the section, or if you need to enter additional income, the application will take you back to the screen where you can repeat the process and enter additional business income if necessary.

@tax111119991