I know there is a question asking whether the ESPP ordinary income was included on the W2 or not, but can't find it anymore, and I need to change the answer. How do I navigate to that question?
You don't see that question while entering trade information or editing trades you've already entered. That question comes up only if you used the "ESPP" step by step interview and only when you're completely done entering trades and click the "Done" or "Continue" button that takes you further into the "Stocks, Mutual Funds, Bonds, Other" interview. You must work all the way to the very end of the interview.
Tom Young
You don't see that question while entering trade information or editing trades you've already entered. That question comes up only if you used the "ESPP" step by step interview and only when you're completely done entering trades and click the "Done" or "Continue" button that takes you further into the "Stocks, Mutual Funds, Bonds, Other" interview. You must work all the way to the very end of the interview.
Tom Young
Go to the ESP Comp WKS. Uncheck the "yes" box and check the "no" box. The amount will then be transferred to line 7 1040
I originally got to the wks by right clicking on 1040 line 7, clicking "data source", which led me to the Wages, Salaries, and Tips Wks. Then I data sourced line 9 d "Ordinary income..not reported on Form W-2" That led me to Employer Stock Compensation Income Wks Part II Column (g) Total.
But how do you get to the ESPP step by step interview? ESPP is not listed under any income category.
You get to that in Forms View. Tom Young says that you can get to that question in step by step, but I never got that far.
yeah, it is always difficult to get the step by step. Luckily this time I got it. phew..
@LRC11 I used the online version,
- Click on Federal in the left navbar
- Click on the Wages & Income at the top
- Choose on 'All income'
- Click on Show More for 'Investment Income' with subtitle '1099-B or broker statements'
- Click on Start for Stocks, Mutual Funds, Bonds, Other
- Click on Yes for (Did you sell any investments in 2017)
- Click on Yes for question - Did you get a 1099-B or brokerage statement for these sales?
- I chose "I'll will type it myself"
- Choose a broker
- In the section 'Tell us about your 'broker' 1099-B, I chose "I'll enter one sale at a time"
Add all the info and click the button "I'll enter additional info on my own"
- In the screen Tell us about your situation
choose I have sales from an Employeee Stock plan,
(If the above screen does not show up choose the 'Guide me' option instead of "I'll enter additional info on my own"
- Choose ESPP on the next page
- Click continue on next page
- showed me the screen 'we just need a few more details..'. Choose 'Walk me through...' Click continue
- Enter discount, click continue
- asks if you have form 3922 (I did get it)
- Fill in the details, click continue
After couple of screens, it asked me the question 'Is this income reported on W2' Hallelujah!
Honestly, I tried creating another account following the same steps, and it is not showing up anymore. :shrug:
Update : as @TomYoung suggested... You must work all the way to the very end of the interview.
Literally, to the end where you say 'Done' to all. Then the screen comes up saying :
+-------------------------------------------------------------
| On XXXX's Form W-@ (or pay stubs) from Company X, check that the following employee stock plan
| amounts were included in box 1 wages'
| If you're not sure, check with XXX's payroll department or stock plan administrator
+-------------------------------------------------------------
Trick is as Tom said... go to the really really end of the interview....
Ah, I discovered that even if I only have one ESPP transaction from one lot, I must choose "enter one sale at a time" rather than "I'll enter a summary". Unless you choose one sale at a time, you won't see the option to "enter additional info on my own. " Thanks praveenswadi.
When entering the sale of the shares, indicate that the sale involves an employee stock purchase plan. See screenshot below. You will then be prompted to enter information about the sale and the amount that is reported on your W-2.
To enter the sale:
• Select Federal Taxes
• Select Wages and Income
• Select Show More at Investment Income
• Select Start at Stocks, Mutual Funds, Bonds and Other
Employee stock purchase plan shares are purchased at a discount. The discount the employee receives on the stock purchase is considered compensation and is reported as ordinary income. Your basis in the stock purchase will be the amount paid for the stock plus the compensation income reported.
The sale of these shares are reported on a Form 1099-B. The capital gain or loss is the difference between what the stock sold for and your basis.
See the article below for more information.
https://turbotax.intuit.com/tax-tools/tax-tips/Investments-and-Taxes/Employee-Stock-Purchase-Plans/INF12047.html
I don't see these screens anymore. I am using TT Premier online. Instead of the first screen where the information is in column format, the new UI shows tabular entry for each cell. And the second screen, highlighted option - not available. :( I remember seeing this last year's return. Not anymore.
Also, talked with a number of friends and at least 2 acknowledged running into same issue. :(
Has anyone run into this issue in the latest online version for the 2020 tax year?
I went through the full ESPP workflow, it allowed me to adjust the basis for ordinary income, but never asked me if the ordinary income was on my W2.
As long as you entered the correct stock basis and selected Long term noncovered (held more than one year) or Short term noncovered (held one year or less) this places the sale on the appropriate section of Form 8949. This selection of 'noncovered' clarifies that the basis, if any, on your Form 1099-B needed to be adjusted.
Hi @DianeW777 denoting the correct "noncovered" may allow you to appropriately adjust the basis on the 8949, but I don't believe it impacts whether or not the ordinary income was appropriately reported in the W2. This would need to be adjusted at the income level on your 1040, which in prior years there was the option during the workflow to select if it has already been reported in your W2 or if it needs to be added as ordinary income.
When I select covered or noncovered in the flow, in neither instance does it appropriately add back the income to the total income line when I go to tool > View Tax Summary.
The actions that needs to take place in TurboTax Desktop version are shown below. The following link is helpful as well.
The steps to this screen are entered below for your convenience.
This should allow you to complete this transaction and finish your tax return. Thank you for your patience.
For 2019 I added the information from my 1099-B and 3922 and there was no question about whether the ESPP ordinary income was included on W2. I am unable to find in Turbotax 2019. Was this question not in Turbotax 2019?
Does this mean there is a problem if the ESPP ordinary income / discount was not included in the W2?
No, the question is there. Follow the steps below to reach the question for the ordinary income to be added to the W-2.
The actions that need to take place in TurboTax Desktop version are shown below. The following link is helpful using Situation 1.
The steps to this screen are entered below for your convenience.
This should allow you to complete this transaction and finish your tax return.
I pulled up Turbotax Premier 2019 to look at what I did. Your steps were similar to what I had done except on step 7 I did "Walk me through adding more info (recommended)". In that case it prompted me to enter my discount and my form 3922 information. If you do that way it doesn't show you the compensation income for that entry.
I didn't realize if I keep clicking through it gave me the total compensation income and W2 choice (for all ESPP entries not just the single one). It looks like I did correctly list "no" last year.
Thank you for your help. Think I am going to upgrade and use Premier again!
On this portion in TurboTax, where I "check that the following employee stock plan amounts were included in box 1 wages", the "Amount We Computed" by TurboTax is $0.26 more than the amount that shows up on the W-2.
Do I still answer "YES"? even though the amount doesn't exactly match? should I be concerned about this difference???
(If I answer "NO", my refund amount is a lot lower, and there's no way for me to correct the $0.26 difference.)
Yes, you can answer YES. The 26 cents is due to rounding, which is allowed. You already paid tax on that W-2 income and if you answer NO there, you will be paying tax on it twice. And no one has to pay taxes on income twice. @rw34394
Hi @DianeW777
Thanks for listing the steps below, they work for me. However TT assumes that all ESPP transactions within the same Institution/Account are either included or not included in the W2 which is not the case for me. TT asks the question "is it on W2?" only once for total of all transactions and not for each transaction individually. I have 9 transactions in the same Institution/Account and one of them is not included in the W2 all other 8 are included in the W2. What steps can I follow in TT to report this properly ? (I would prefer not to mess with the forms directly).
The ESPP transaction that is not reported in my W2 is a Long Term, Covered, Qualifying Disposition for which the Bargaining Element (the discount I received) is not reported in the W2. All other transactions are Disqualifying Dispositions and they are included in my W2 box1 and in box14 as ESPP DD (disqualifying disposition)
Thank you in advance for your direction,
It depends. You must add this as a separate sales transaction. If you reach a summary page with all of your transactions reported, except for this, you would choose add more sales underneath the transactions already reported.
Hi @DaveF1006 ,
Thanks for your reply. I followed your directions however TT continues to ask the question "is it on W2?" only once for the total Compensation Income of all the transactions from the same employer. I experimented changing the Institution and Account number just to check and TT still added them all together and asked the question "is it on W2?" only once.
I need to answer the question independently for each transaction because I have 9 transactions from the same Employer, in the same Institution and Account and one of them is not included in the W2 all other 8 are included in the W2. What steps can I follow in TT to report this properly ? (I would prefer not to mess with the forms directly).
I found out experimenting that if I change the employer then TT will ask the question "is it on W2?" once for each employer, however this is not my case, and it still assumes that all transactions from one employer are either all included or all excluded from the W2 which seems to be a fundamental error.
cc: @DawnC , @DianeW777 in case you have a solution for this situation.
Thanks in advance for your help.