1099B stock option income, but already reported in W2 wages

[tmeetze57025]

How do I report? Do I need form 8949?

[ToddL · Accepted solution]

Enter the Form 1099-B (see steps below) and it will automatically create Form 8949.  Y ou won't get taxed on the income again, because you will have a cost basis in the stock that is approximately equal to what your proceeds were.

You will need TurboTax Premier to make the necessary entries in the Stocks, Bonds, Mutual Funds and Other interview in the Investment Income section of Federal Taxes tab > Wages & Income category.

Steps:

1. Start/Revisit/Edit the Stocks, Bonds, Mutual Funds and Other interview.

2. Select Yes in the "Did you sell any investments in 2015?" screen (or add another investment).

3. If the Form 1099-B was already imported, you will  need to go through the interview screens until you come to where you can Edit the Form 1099-B. Select Edit. Otherwise, just follow the prompts to type the information in. 

4. On the Review (or Tell us about) your Box A (or whatever Box the import showed)  sales from your 1099-B screen, make sure the information in Boxes 1a, 1b, 1c, and 1d are as you imported them. Select Continue

5. Check "This sale involves an employee stock plan (including ESPP) or an uncommon situation." and Start now

6. On Tell us about your situation screen, check I have sales from an Employee Stock Plan, including ESPP, NQSO, ISO, RS, and RSU. Select Continue

7. On What type of employee stock plan was this sale from? check whatever type ESP you had (I used NQSO, since that is the most common and the income is included on your Form W-2). Select Continue

8. When you come to Did You Do a Same-Day Sale? answer the question (I used Same-day sale (cashless exercise), again the most common).Select Continue

9. Enter Your Sale Information (sample screenshot attached). Select Continue

10. Total Proceeds Summary (this is calculated, but you were probably charged a small commission which you can enter in the  Sales Expenses section at the bottom. Select Continue

11. Proceed to Enter Your Purchase (Exercise) Information and enter your exercise price (sample screen attached). Select Continue

12. Does Your Cost Basis Match Your 1099-B Statement?  I assumed the broker didn't report a cost basis. (sample screen attached) Select Continue

13. Your Nonqualified Stock Option (NQSO) Sale Results - the previous steps result in zero gain (or a small loss for commission costs) which is correct since your W-2 already reported the proceeds as income. (sample screen attached).

Please post a Comment if you have additional questions, but these steps should help you avoid any IRS issues.

[dngo01]

I had Turbo Tax Home and Business version. The screens were different. When I finished it still showed I had a gain amount which matched of what was reported on the W2 Box 12 V. How do I fix it?

[erenerik]

On my W2, in box-14(other) there is an amount of RSU Stock reported, which the amount is included as income in Box-1, and also taxed. But I did-not sell any part of that RSU, it is sitting in my E-Trade account. This amount NOT reported on 1099-B. Do I have to do anything inTurboTax interviews since I did NOT sell anything from that RSU?

[erenerik]

On my W2, in box-14(other) there is an amount of RSU Stock reported, which the amount is included as income in Box-1, and also taxed. But I did-not sell any part of that RSU, it is sitting in my E-Trade account. This amount NOT reported on 1099-B since there is no sell yet. Do I have to do anything inTurboTax interviews since I did NOT sell anything from that RSU?

[erenerik]

On my W2, in box-14, there is an amount of RSU Stock reported, which the amount is included as income in Box-1, and also taxed. But I did-not sell any part of that RSU, it is sitting in my E-Trade account. This amount NOT reported on 1099-B. Do I have to do anything inTurboTax interviews since I did NOT sell anything from that RSU?

[susan-short]

I reported Stock Option NQSO and followed the screens and have the right total from my adjusted 1098 form but turbotax keeps telling me I need to fix a problem on review that the totals don't add up.  I have been through adding the two purchases about 6 times each and I think I may just submit it as is even though it ties to correct it on review

[john d barlow]

moved funds from vanguard to morgan Stanley is this taxable

[JW888]

ToddL,

Your answer here on the 1099B is very helpful, but I am not able to see any of the sample screen shots mentioned in your response. Would it be possible for you to resend them in this thread?

Thanks.

[LindaS5247]

Here's where you enter or import your 1099-B in TurboTax:

1. Open or continue your return, if you haven't already.
2. Select Search, enter 1099-B, and select Jump to 1099-B.
   1. You can also go to Federal, then Wages & Income, then Investments and Savings.
   2. Select Start or Revisit next to Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B).
3. Select Okay! on the screen Time to kick off your investments! OR Yes on the screen Did you sell any of these investments? then Continue.
   • If you see Your investments and savings or Your investment sales summary, select Add investments or Add more sales.
4. When you reach Let's import your tax info, choose how you want to enter your 1099-B:
   • To import your form, select your brokerage or financial institution from the list. Enter your sign-in credentials for your account, then select Get my form.
   • If you want to enter your 1099-B manually, select Enter a different way, then select your investment type on the next screen.
5. On the following screens, answer the questions about your 1099-B.
6. When you reach the Review your sales screen, the form you just entered should be listed.
   • If you need to add another 1099-B, select Add another sale. Otherwise, select Continue.

If this was reported on both a Form W-2 and 1099-B you may have to make an adjustment, but report the Form 1099-B on your tax return.

The IRS will be matching the 1099-B form with your Social Security number (SSN). If the 1099-B form is not on your income tax return, you may get a letter from the IRS with the entire 1099-B amount treated as taxable income and additional income tax due.

How do I fix the basis for an NQSO sale that was also reported on my W-2?

Oftentimes, the cost basis of an NQSO sale reported on a 1099-B doesn't include the stock's discount (also called the compensation). If the compensation was reported on your W-2 in box 12, you could be paying more taxes than you need to.

Here's how to make sure the cost basis is right when reporting the sale from your 1099-B:

1. Open your tax return and go to Federal, then Wages & Income.
2. Go to Investments and Savings, and then select Start or Revisit next to Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B).
3. Enter your 1099-B if you haven't already. If you have, select Edit under your 1099-B.
4. On the Tell us about the sales on your 1099‑B screen, select Yes when asked Do these sales include any employee stock? Answer the rest of the questions and select Continue.
5. Continue through the screens, and on the Now, enter one sale on your 1099‑B screen, fill out the fields and select The cost basis is incorrect or missing on my 1099‑B and Continue.
6. On the We noticed there's an issue with your cost basis...Let us know if you'd like to make any changes screen, select I know my cost basis and need to make an adjustment and enter the correct cost basis from your W-2 (box 12, code V).
   • If you have more than one sale on your 1099-B, you may want to reference the supplemental statement provided by your broker that shows the Box 12, Code V amount by individual sale, rather than the one amount on your W-2.
7. Select Continue and the transaction will now reflect the corrected cost basis.

A same-day (cashless) NQSO transaction will usually net out to a small loss, representing the commission and fees associated with the transaction.

Click here  for Instructions to Form 1099-B.

Click here for additional information regarding Form 1099B.