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posted Feb 5, 2022 1:12:24 PM

I have an ESPP and made several disqualifying dispositions. When this occurs my company removes the expected taxes from my next paycheck. How is this accounted for in TT?

My company listed the amount they withdrew from my paychecks on W2 box 14. I don't see anywhere in TT where it's clear that I'm not paying double taxes on this. 1) Being the taxes already withheld from my paycheck and 2) Being the amount of taxes I'm paying on the Stocks. I'd like to see: amountYouOweOnESPPSales - amountYouAlreadyPaidThroughLowerPaychecks = x

Hopefully that makes sense.

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1 Best answer
Expert Alumni
Feb 7, 2022 6:22:24 AM

The proceeds from the disqualifying disposition are already included in your Box 1 Wages amount and the taxes withheld are also reported on your W-2. Since Box 14 does not have standardized codes, there is nothing that differentiates the ESPP sales from your regular wages to the software. 

 

You are not being taxed twice on this as long as the W-2 is reported accurately. The place where people potentially run into trouble is when they get a 1099-B that reports the sale of ESPP stock because sometimes the basis is under-reported. There should be supplemental information on the 1099-B and your employer should provide Form 3922 which will have the adjusted basis that you would want to report. 

1 Replies
Expert Alumni
Feb 7, 2022 6:22:24 AM

The proceeds from the disqualifying disposition are already included in your Box 1 Wages amount and the taxes withheld are also reported on your W-2. Since Box 14 does not have standardized codes, there is nothing that differentiates the ESPP sales from your regular wages to the software. 

 

You are not being taxed twice on this as long as the W-2 is reported accurately. The place where people potentially run into trouble is when they get a 1099-B that reports the sale of ESPP stock because sometimes the basis is under-reported. There should be supplemental information on the 1099-B and your employer should provide Form 3922 which will have the adjusted basis that you would want to report.