RSU included in W-2 and on 1099-B. Am I paying tax twice?

[CB1406]

My employer has included an RSU grant on my W-2 in box 14 (code "RS") and I can see this was also included in box 1. I've also received a 1099-B from my brokerage describing stock sales over the RSU vesting schedule to cover the RSU cost at each vest. The proceeds from these sales are being treated as realized income on the 1099-B and taxed as short-term cap gains. According to the 1099-B, no taxes were withheld for these sales.

I've input all of the compensation info from my W-2 (including the value of the RSUs) as well as the proceeds from the 1099-B into the TurboTax software and the amount I own went up dramatically. I'd like to confirm this was correct and that I did not input the information incorrectly/redundantly resulting in the software taxing that amount twice.

Thank you.

[RaifH]

No, if your taxes went up dramatically with the entry of the 1099-B, you probably need to adjust the cost basis on the sale of the stocks so that you are not being double-taxed on the vesting. 

Since your compensation from the RSUs was added to your W-2, the proceeds from the sale should have also been added to the taxes withheld. The taxes withheld may have been split between state, federal, and local taxes but they should be on the W-2. 

The 1099-B may not have a cost basis for these shares. That is incorrect. The cost basis should be the value of the stock on the vesting date since that value has already been added to your W-2. There may be information in the supplemental to the 1099-B with the adjusted cost basis for the RSU sale to cover taxes. If not, you can determine the cost basis using that Box 14 amount on your W-2. For example, if RS in Box 14 is $10,000 and you sold 25% of the shares to cover the taxes, you should adjust the cost basis to $2,500. 

Once you adjust the basis, you should have little or no capital gains from the sale. There may be a small loss if they charged fees on the transaction. To report the RSU sale:

1. In the Federal > Income & Expenses > Investment Income section of your return, click Start/Revisit next to Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B)
2. Answer Yes and then select stocks. Import or enter your transactions manually. 
3. For the RSU transactions, make sure to select Yes to Do these sales include any employee stock?
4. Enter the transactions as they appear on the 1099-B with RSU selected as the type of investment.
5. If the basis reported on the 1099-B is not correct, you will be able to adjust it to match the supplemental information provided. 

For more information on RSUs and how to report them, please see this TurboTax article.