@home_owner  "Basically employees cannot take advantage of QSBS." That is not literally true.  Any "employer stock" program, QSB or not, has a "compensation" element built-in.  Basically and without going into detail, stock acquired from an employer for the employee's services is (or has the potential to be) considered compensation.  You, as the employee of a QSB, can take advantage of the benefit of QSBS exactly like any outside investor. ... View more

@GeorgeM777   @pr0  "Yes, for a NQSO, t he cost basis is equal to the exercise price, multiplied by the number of shares exercised. " That is incorrect.  The correct cost basis for stock acquired via a NQSO is the sum of the exercise price paid plus the the compensation created by the exercise.  In other words, each share of stock has a basis that's the same as the "fair market value" used by the employer to calculate the compensation created by the exercise.  The stock broker's 1099-B will report the cost basis as the out of pocket exercise price, but that needs to be adjusted to include the compensation element for income tax purposes. ... View more

@ivatan  I dropped out of the TurboTax "SuperUsers" group some years ago when they changed the program from SuperUsers to "Champions" whereby we were required to promote TurboTax via social media and sign NDA's, but I still get emails when posts are made to my old answers.  In the main I never reply unless some "expert"  - @RobertB4444 in this case - gives really bad advice. Let's start with your 1099-R where you say "The 1099-R I received from my former employer shows the same amount in box 1 and box 2a."  That strikes me as completely wrong so the first thing I'd do is go back to the employer and asks "what gives?"  Based on your made-up numbers it seems like box 2a should be $12,000 such that $90,000 - $12,000 = $78,000.  So the basis for ALL THE SHARES should be $12,000. Next, the statement "long term sale occurs over a year after the purchase of the stock sold. In your case because it is less than a year between purchase and sale you will enter short term" just isn't the case.  The whole point of taking stock with NUA is that the NUA is LONG TERM by definition, even if you sell the stock the same day you acquired it. TurboTax just doesn't have any sort of "guidance" when it comes to this situation, so you need to sorta fake things a bit to get it entered properly. ... View more

"Meaning, we asked for a significant amount more than the usual 22%, which they did hold back. But this additional amount is not reflected on the W-2." and "They were supposed to have withheld 33-35% on the RSUs and it looks, from our W-2, like only 22% was withheld. This is where we're hoping that something additional will show on the 1099-B because the W-2 doesn't seem to include everything."   Well, maybe the payroll department didn't do what you asked, maybe they did and you're just not seeing it, but talking it over with the payroll department is the only way to determine what they did.   "In the statements we can see on our brokerage website, the shares held represent a much higher percentage. So why is this not reported on the W-2?"   I think what you're saying here by "shares held" is that the shares that got sold "to pay for taxes" is higher than you'd normally expect it to be and you can't trace that "higher" amount to your W-2?   One answer to the question as to "where are the extra taxes showing up in my W-2?" could be a misunderstanding on your part.  Shares sold "for taxes" encompass all the taxes normally associated with a paycheck; federal withholding, state withholding, local taxes, FICA, possibly state unemployment taxes, state disability tax, etc.  So those "extra taxes" could and should be showing up in more than just your federal income tax withholding.  Again, the payroll department should be able to map this out for you.   "I'm not sure what it means to use the "wrong basis," so I guess we'll have to look into that once we receive the 1099-b."   Here's the problem; ever since (I think) 2010 brokers have been reporting the wrong basis for employer stock on the 1099-B.  They are supposed to supply the correct numbers with some sort of additional statement that comes with the 1099-B but it seems like lots of people don't see this statement and only look at what's on the 1099-B.  In the case of RSUs they report $0 as the basis since the broker's requirement is to only report what you paid out of pocket for the shares.   The actual per-share basis is the same per-share number used by the employer to calculate the compensation created by the vesting of the RSUs.   ... View more

I stopped answering tax questions a few years ago because I was unwilling to become a TurboTax "Champion" when TurboTax adopted that structure for their user-to-user help.  However I frequently receive emails from the TurboTax "community" when there are add-on posts to questions that I answered in the past as a SuperUser.   I have never responded to add-on posts, until now.    The answer provided by @RaifH to @bkhinrichs is just too wrong to let it pass unaddressed.    A "sell to cover" sale, or a sale of that same stock 10 years from now, WILL NOT result in a 1099-B showing taxes withheld BY THE BROKER.  The only situation where you'd expect to to receive a 1099-B with taxes withheld by the broker would be a situation where you're subject to "Backup Withholding."  You are subject to Backup Withholding if you fail to provide a correct taxpayer identification number to the broker, or have had Backup Withholding imposed by the IRS.   Absent the obligation for the broker to withhold taxes, all payroll taxes associated with the compensation created by an employer stock option program should be reported on the W-2.  The taxes will be scattered around the "taxes" boxes of the W-2 and, typically, are not identified separately to you.  IF you think that the taxes are not on your W-2 THEN you must get a corrected W-2 from your payroll department.   The cash raised "to pay the taxes" by a sale - that's the 50 shares in @RaifH 's example - is passed back to the employer, and the employer pays the taxes "for you", in the same manner that cash is withheld from your paycheck for taxes.   In my experience the most common reason users think that there must by withheld taxes reported on the 1099-B is that when they enter the sale their taxes go way up, they think they are being "double taxed", and conclude that the withheld taxes they think they'll see on the 1099-B will put things to right.  Usually the reason their taxes go way up when they record the sale is because they are using the wrong basis. ... View more

Well, TurboTax is right, you can't enter a sale that occurred in 2018 in a 2020 income tax return.  And, because you didn't use TurboTax last year it can't simply transfer the remaining capital loss from the 2019 income tax return.  You have to enter the capital loss remaining as of 12/31/19 yourself.   Here's where you do that in the desktop program.  I assume the online program is similar: ... View more

"No grant of RSU in 2020. Just vested 1000 RSU, not sold/exercised. "   "Exercised" isn't a word typically used in an RSU situation.  IF they vest THEN they are yours.   If this was really Restricted Stock then the grant would have happened some time in the past.    You're going to have to go to your payroll department and ask "Why isn't the $20,000 created by the vesting of the RSUs included in my taxable income?  Everybody says it should be."  (Copy this down and repeat it word for word.)  If the payroll department tells you the presentation is correct and WHY it's presented this way, then ask them to write that down so your tax advisor can understand. ... View more

"Then my total income is 10000 + 20000 = 30000 which should be in Box-1, but today Box-1 is just 10000."   If this is a genuine "vested RSU" situation then that doesn't make sense.    Instead of  RSUs did you get a grant of Restricted Stock (RS) and make an 83(b) election at the time of the grant?  This still wouldn't make a huge amount of sense as the vesting of the restricted stock wouldn't be a taxable event, an event requiring withholding, but it could, sort, kinda, explain the W-2 presentation (though I'm not at all sure that presentation is actually correct if that's the case.)   ... View more

"Thank you! One of the payroll team told me that my W-2 is correct, which also confused me. I am doubling check with them. My base salary is 10000, RSU income is 5000, but the Box-1 is ~10000 while Gross Pay is ~15000. " I continue to be confused.  $20 x 1,000 (your figures) = $20,000 and if those shares vested in 2020 Box 1 should equal $10,000 + $20,000 = $30,000.  I can't get "$5,000" from anything you've posted.  I think you're misunderstanding something.  RSU income is fully taxable when the shares become yours. ... View more