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Tax Center: Restricted Stock: W-2s & Tax Returns

Want to know more? Listen to our podcast on tax return tips and how to avoid reporting mistakes!

Check out our podcast and video on the tax forms and reporting rules for stock sales.

Articles

Restricted Stock & RSUs: 10 Mistakes To Avoid On Your Tax Return This is premium content

UPDATES! This article explains common errors to avoid when your tax return involves restricted stock/RSUs and offers related helpful tips.

VIDEO! Tax-Return Reporting Of Company Stock Sales: How To Avoid Overpaying Taxes

Learn the rules for reporting stock sales on your tax return, along with costly errors to avoid if the shares you sold came from stock options, restricted stock/RSUs, stock appreciation rights, or an employee stock purchase plan. Among other issues, you must understand your "cost basis" to avoid overpaying your taxes. Running time: 8:05.

Form 8949 and Sch. D diagrams! How To Report Sales Of Company Stock On Your Tax Return

If you sold in 2016 any shares that you acquired from equity compensation or an ESPP, you will need to report the sale on the federal tax return that you file in 2017. Learn here what you must know to avoid expensive mistakes and unwanted IRS attention. Our annotated diagrams of Form 8949 and Schedule D can help you make sense of the reporting rules.
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VIDEO! Tax-Return Forms And Reporting Rules For Stock Sales

Learn how to prevent costly tax return mistakes with this animated presentation on IRS Form 1099-B, IRS Form 8949, and Schedule D.

Avoid Overpaying Tax On Stock Sales: Understand Forms 1099-B And 8949 For Tax-Return Reporting This is premium content

UPDATES! The stock-sale information provided by brokers on IRS Form 1099-B has changed. Cost-basis reporting, both for your broker on Form 1099-B and for you on your tax return, is now more complex, confusing, and vulnerable to errors. This article explains the crucial facts you must know to avoid overpaying tax or attracting unwanted IRS attention.

Presentation! Preventing Costly Tax-Return Mistakes This is premium content

myStockOptions.com
This PowerPoint presentation explains the top 10 most frequently occurring errors involving stock compensation on tax returns and answers common questions about related tax topics.

IRS Guide To Auditing Techniques For Stock-Based Compensation

The IRS tips its hand on what its agents look for in audits related to all types of stock pay to ensure compliance, whether by corporations or executives.

FAQs

UPDATES! What's new for tax-return season?

Here's a quick take on issues to be aware of when preparing your federal tax return...

What are the top 10 questions I should ask about the reporting of stock sales on my tax return?

This FAQ presents 10 questions you should ask to be sure that you report your stock sales accurately and avoid costly mistakes that attract the attention of the IRS...

What are the biggest mistakes with restricted stock or RSUs that I can make on my tax return, and how can I avoid them? This is premium content

It is all too easy to make costly tax-return errors that attract unwanted IRS attention. Learn how to prevent mistakes...
Show More FAQs (26 more)

What are some major issues to be aware of when reporting stock sales on my tax return? Why have these issues arisen?

Major changes have occurred in the tax reporting for stock sales during the past few years, making accurate tax-return reporting more complex and difficult...

W-2 diagram What will my W-2 show after the vesting of restricted stock? This is premium content

Restricted stock results in ordinary income to you. This occurs either at the time...

W-2 diagram What will my W-2 show after the vesting of restricted stock units? This is premium content

Restricted stock units result in ordinary income to you. This occurs when...

I received a notice (CP-2000) from the IRS stating that, according to last year's tax return, I owe money for the sale of my restricted stock when it vested. I thought I paid all the taxes through withholding at vesting. How do I respond? This is premium content

Because the value of the shares at vesting was added to your W-2, and withholding taxes were based on that value, you thought you did not need to file Schedule D with your Form 1040 to report the sale. It is a common mistake to think this...

W-2 diagram What will my W-2 show after the vesting of performance shares? This is premium content

Performance shares result in ordinary income to you. This occurs when the grant vests after specified targets are reached and shares are either delivered or paid out to you. Depending on the structure of the grant, this may occur in the year after the end of the performance period...

What should I do if I don't receive a W-2 or if I lose it? This is premium content

If the company has not issued a W-2 by the middle of February, the IRS suggests...

What tax statement will I receive from my broker after a sale of company stock? This is premium content

Form 1099-B or the equivalent substitute statement is necessary for the accurate completion of your tax return. Five facts you must know about this reporting to avoid tax-return mistakes are...

How have IRS Form 1099-B and cost-basis reporting changed for sales of stock acquired from my stock options, restricted stock, or ESPP? What do I need to do differently because of the changes?

If you sold shares during the calendar year, your brokerage firm will issue IRS Form 1099-B by mid-February of the following year. This is an important document that you must have to complete your tax return for the year of sale...

What is the cost basis for calculating gains on my tax return after I sell stock acquired from stock options, restricted stock/RSUs, performance shares, or ESPPs? This is premium content

This is an area in which mistakes often occur. The cost basis, also called the tax basis, is calculated in the following way...

In the cost basis I use to report sales of company stock on my tax return, what part comprises the W-2 income from stock compensation or an ESPP? This is premium content

When your W-2 income is added to the price you paid for the stock, this is your cost basis on your tax return. The table below presents the compensation portion of your tax basis for all types of stock grants and ESPPs...

What if the wrong cost basis is reported on my 1099-B? How do I report the right cost basis on Form 8949 of my tax return? This is premium content

From our interpretation of the forms and their instructions, myStockOptions.com recommends the following reporting steps to avoid overpaying taxes...

Form 8949 and Sch. D diagrams How do I report a sale of restricted stock on my federal income-tax return? This is premium content

You need to complete Form 8949 and Schedule D for the year when you sold your stock and file them with your Form 1040 federal income-tax return. You do this even if...

Form 8949 and Sch. D diagrams In the tax-return reporting for restricted stock, do I need to report shares that I sold for taxes or that my company used for tax withholding? This is premium content

You should definitely report a sale for taxes at vesting if you received a 1099-B that shows the proceeds. The IRS will...

Form 8949 and Sch. D diagrams How do I report a sale of shares from restricted stock units (RSUs) on my federal income-tax return? This is premium content

You need to complete Form 8949 and Schedule D for the year of the sale of your stock and file it with your Form 1040 federal income-tax return. You do this even if...

Form 8949 and Sch. D diagrams How do I report a sale of performance shares or PSUs on my federal income-tax return? This is premium content

You need to complete Form 8949 and Schedule D for the year when you sold your stock and file them with your Form 1040 federal income-tax return. You do this even if...

If I need to file an extension to complete my tax return after the IRS deadline, are there any mistakes I should avoid that involve stock grant income?

In any tax year, stock compensation income, such as from an NQSO exercise, an ISO or ESPP disqualifying disposition, or the vesting of restricted stock, can raise your income tax and make your return complex. Mistakes include not paying taxes owed with...

Do the restricted stock/RSU tax rules, withholding, and tax-return reporting differ if I am an independent contractor, a consultant, or an outside director and not an employee? This is premium content

In some ways they are similar. The tax treatment of restricted stock is the same for everyone. The reporting and withholding income is different. If you are an employee...

The value of my restricted stock at vesting is reported on my W-2 as ordinary income. Can I use my stock-trading losses to offset this income? This is premium content

You have different types of taxable income. The tax law says you can offset losses against only the...

How are the dividends on restricted stock taxed and reported to me? This is premium content

Dividends that are earned on restricted stock are considered compensation income, which is reported on your W-2 (1099-MISC for nonemployees, such as directors). Once the shares vest, dividends are no longer compensation and instead become...

In what ways can I pay my taxes if I don't have the money to pay them with my tax return?

If you simply lack the funds to pay your income tax, you may want to apply for a payment agreement on the...

Has the likelihood of a tax audit increased? This is premium content

Yes, substantially. In addition, fluctuations of income, which can be caused by stock compensation, are a red flag that can trigger an audit. According to research...

My company's stock is now essentially worthless because of securities fraud by senior executives. Can I claim a casualty or theft loss on my tax return? This is premium content

A casualty or theft loss would allow you to deduct the lost amount against your ordinary income, subject to some limits. However, Treasury regulations and court rulings would probably stand in your way. Nevertheless, what you can do is...