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Stock Options and RSU income

Hi, we started taxes and wondering if we are doing something wrong because the ticker at top shows we owe so much.  Wondering if it's related to exercising stock options and RSU grants.  Or if I need to file something separately because of these activities.  

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3 Replies
GeorgeM777
Expert Alumni

Stock Options and RSU income

Check the cost basis for your RSUs.  If your RSUs were sold through a brokerage firm, or other firm that can handle sales of RSUs, many times those firms do not know your cost basis, and therefore, they will enter a zero as the cost basis.  If you have a zero cost basis, that will result in a capital gain equal to the total proceeds and thus, you will be taxed on the total proceeds.

 

RSUs are a type of compensation.  When they vested with you, your firm likely withheld and sold a certain number of shares to cover your tax withholding requirements.  The value of the remaining shares was likely included on your W-2 because compensation of this type belongs on your W-2.  For tax purposes, you only need to pay capital gains tax on any gain you have after selling the RSUs.  If you have a loss, then you may be able to use that loss to offset other capital gains and possibly some of your ordinary income.  

 

To review your cost basis for the RSUs, in TurboTax online, go to Income & Expenses, scroll down to Investment Income and revisit the category Stocks, Cryptocurrency, Mutual Funds, etc.  

 

@bfong22

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Stock Options and RSU income

Thank you for the response.  What form do I fill out to adjust the cost basis on the stock option.  I wonder if that is the case.  When I entered the info on TurboTax, there was no "prompt" about the cost basis.  So wondering if that is the issue.

DianeW777
Expert Alumni

Stock Options and RSU income

As indicated by our awesome tax expert @GeorgeM777 you would go to the specific stock option(s) and change/adjust the cost basis when you reach that screen.

  • TurboTax online, go to Income & Expenses, scroll down to Investment Income and revisit the category Stocks, Cryptocurrency, Mutual Funds, etc.
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