Once again Turbotax appears to allow double counting of employee stock purchase plan proceeds already reported in W2.
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New Member

Once again Turbotax appears to allow double counting of employee stock purchase plan proceeds already reported in W2.

 
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Level 12

Once again Turbotax appears to allow double counting of employee stock purchase plan proceeds already reported in W2.

TurboTax several years ago abandoned the old interview where for each and every sale you had to go through a long and intensive interview where the question was asked if the stock was acquired via some sort of employee stock plan.  Now you are encouraged to be a simple "fill in the boxes" data entry monkey and YOU have to recognize that the stock you are selling, by its very nature, requires more than that.  A fairly recent change by the IRS which now allows broker's to report ONLY your "out of pocket" cost basis and not the correct cost basis - which includes the compensation - has made this situation worse.

After you enter the basic 1099-B information on TurboTax's default entry form, wrong broker-reported basis and all, there are two blue buttons that are available to you and two ways to get that basis corrected.

The easiest way by far, if you know your correct basis and the compensation HAS been reported on the W-2, is to simply click the blue "I'll enter additional info.." button and on the page that opens up, enter the CORRECT basis.  That's it.

The second way of dealing with this situation, one that I generally don't recommend if you know your correct basis and the compensation has been reported on the W-2, is to click the "Guide me step by step" interview.  That interview DOES ask about whether the stock is employer stock and under which program - SRU, NQSO, ESPP, etc. - it was acquired.  That's interview, properly conducted, will also get your basis corrected.

Tom Young

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Level 2

Once again Turbotax appears to allow double counting of employee stock purchase plan proceeds already reported in W2.

You need to look for the blue link that says What if I sold employee stock? on the entry for your ESPP sale from the 1099-B.  To get to the right location,

  • In your Federal return, choose Wages & Income
  • Scroll down to Investment Income and Show more
  • Start or Revisit Stocks, Mutual Funds, Bonds, Other
  • Edit the sale 
  • On the page "Tell us about your Brokerage 1099-B" choose the radio button for "I'll one sale at a time."  
  • Fill in your information and look for the blue link at the bottom which says What if I sold employee stock?  Click on it  and complete the interview.

Generally, the final amount will be a small loss or gain.  This is the gain or loss on the sale of the stock after deducting the price you paid for it, as with any other stock transaction.

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New Member

Once again Turbotax appears to allow double counting of employee stock purchase plan proceeds already reported in W2.

Thank you @TurboTaxKitty.  The software fails to guide the user to avoid double taxation on this issue.  I just happened to know about the issue, and anyone could easily import their 1099 data and miss this fault in the software.  I can't believe Turbotax misses this year after year.  Also, the gain is already included in the W2.
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New Member

Once again Turbotax appears to allow double counting of employee stock purchase plan proceeds already reported in W2.

@TurboTaxKitty -- your guidance worked.  You just saved me $2800.  Thank you.  Others beware and heed the advice.
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Level 2

Once again Turbotax appears to allow double counting of employee stock purchase plan proceeds already reported in W2.

@f412xb70 My pleasure.  Is there anything else I can do to be helpful?
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New Member

Once again Turbotax appears to allow double counting of employee stock purchase plan proceeds already reported in W2.

My W2 clearly states I contributed $24K toward retirement accounts.  TT has inexplicably reported I contributed $24, 400.  I dealing with that perplexing question.
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