Taxes on Stock Bonuses

[applejackducks]

I received stock as part of a bonus for the first time.  I know my company sells some to try to plan for taxes but where/what form is this reported on that I need to have when I file my taxes?

[ThomasM125]

You will receive a Form 1099-B which will report the sale of your employee stock. Most likely, the cost basis on that form will be wrong as it may not include the discount you received associated with you receiving the stock for less than fair value. That discount will be reflected on your W-2 form as wages in box 1. There may be an entry in box 14 telling you what the amount of the discount is. Otherwise, you may need to ask your employer.

If you divide the discount amount by the number of shares you received you know what the discount amount per share is. If you multiply that by the number of shares sold you will know what the discount amount is that you may need to add to the cost basis of the stock sale reported on your Form 1099-B.

When you enter the Form 1099-B in TurboTax, there will be a screen where you enter the sales proceeds and cost basis and you will see an option to indicate that the cost basis is incorrect or missing on the Form 1099-B. Check that box and on another screen, you can enter the correct cost basis or request that TurboTax assist you in determining what the correct cost basis is. 

You enter the Form 1099-B in the Investment Income section, then Stocks, cryptocurrency, Mutual Funds, Bonds, etc... section.

[applejackducks]

This seems like if I sold stock, is that correct?  I'm asking about receiving stock as a bonus (which is done at fair market value rather than as part of the 10% employee purchase plan) and how I report that.  Thanks for any help!