Question

How do I report RSUs sold only for taxes in TurboTax?

Forum|Forum|2 years ago
January 28, 2024
1 reply
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Hi! I haven't had to report anything tied to RSUs in the past. My employer granted me RSU's this year and sold a portion of those for taxes on my behalf on the day they were issued/vested. I received a form 1099-B from the brokerage that manages the RSUs and it shows:

- The quantity (Box 1a)

- Date acquired (Box 1b)

- Date sold (Box 1c)

- Proceeds (Box 1d)

- Cost or other basis (Box 1e)

"Proceeds" and "Cost or other basis" are non-zero and are within a few dollars of each other. The line with those values shows "Short Term - Noncovered Securities* (Short-term transactions for which basis is not reported to the IRS - Report on Form 8949, Part I, with Box B checked.)"

Some questions:

1. Do I still report this in TurboTax? I never received money from this sale to cover taxes.

2. I assume my employer (a very large company) took the money from this sale and paid the IRS. Is this correct typically?

3. If I do report this 1099-B form in TurboTax, where do I report it and specifically how? There's a place for "Did you sell any of these investments in 2023?" If I say "Yes" and select "Stocks, Bonds, Mutual Funds", then skip the import (my specific brokerage name is not listed for imports), enter the brokerage, Continue, then I am asked "Do these sales include any employee stock?". I did sell the RSUs, but it was only to cover taxes.

4. Assuming the place in TT I mentioned in #3 was correct to enter this, I chose to enter the sales one by one (there was only one sale in 2023 to cover taxes and I did not sell anything else for myself), how come my Federal Tax Due did not decrease? Do most employers report sales of RSUs to cover taxes in the main W2 already and this form 1099-B is for something else?

I just want to make sure this sale is not reflected incorrectly in my tax return for 2023 and I haven't had to report this before. Any help on how specifically to enter in TurboTax is appreciated.

Thanks!

TurboTax Home & Biz Windows

J

JohnW152

It sounds like you're on the right track. Yes, you do report this on your tax return.

Your employer most likely sold enough shares to cover the tax withholding, but you'll need to confirm with your employer (or its payroll office). You're probably not seeing a significant change to your tax due because, as you say, your proceeds and cost basis were very close -- very little actual gain was realized from the sale.

To enter this income in TurboTax Home & Business:

Open TurboTax
Select Federal Taxes in the banner
Select Wages & Income in the banner
Select I'll choose what I work on
Scroll down to Investment Income and select Start or Review to the right of Stocks, Cryptocurrency, Mutual Funds, Bonds, Other
Select Yes on the Did you sell any of these investments in 2023? screen
Select Stocks, Bonds, Mutual Funds, then Continue
Select Skip Import
On the Which bank or brokerage is on your 1099‑B? screen, enter your information and select Continue
Answer Yes to Do these sales include any employee stock? Answer Do you have more than three sales on your 1099‑B? appropriately, then select Continue
Input all relevant information

See the TurboTax blog How to Report RSUs or Stock Grants on Your Tax Return for more information.

C

Cocovanilla

I have the same inquiry and received Form 1099-B with note “Short Term - Noncovered Securities* (Short-term transactions for which basis is not reported to the IRS - Report on Form 8949, Part I, with Box B checked.)".

A portion of the RSU was sold to cover tax and that’s it. When I followed your direction to input all the forms in Form 1099-B, the amount of tax owed increase significantly! On the given 1099-B, it states “Report on Form 8949, Part I, with Box B checked” so my assumption was that I shouldn’t input the amount under 1099-B and just go straight to Form 8949, however, when I click on Open Form, I can’t even edit Form 8949. What is the best approach?

C

Cocovanilla

After several searching in this form, I understand why my federal tax due jumped significantly. The cost basis showed zero on Form 1099-B. I went to and download my RSU transaction statement for 2023 which listed the #’s of shares sold with the sale price. I entered zero for Cost Basis but selected “The cost basis is incorrect or missing on my 1099-B”. On the next page, I just selected the first option of “I found my adjusted cost basis” and added the calculated amount of shares sold * sales price per sale. The Proceeds and Costs Basis are nearly the same (although some are off by a few amount).