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

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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.

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.

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.

FAQs

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 related to stock appreciation rights (SARs) 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...

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...
Show More FAQs (18 more)

What's new for tax-return season?

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

W-2 diagram What will my W-2 show after I exercise stock appreciation rights? This is premium content

The gain from your SARs exercise(s) is totaled on the W-2 with other income in the following boxes...

Form 8949 and Sch. D diagrams How do I report sales of shares from stock appreciation rights on my federal income-tax return? This is premium content

Whether you sell all the stock at exercise or hold the stock and later sell it, you need to complete Form 8949 and Schedule D for the year of...

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...

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 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...

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 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...

How are stock appreciation rights taxed? This is premium content

When you you exercise stock appreciation rights, depending on the plan's design and practices, you receive...

When I exercise my stock appreciation rights (SARs), will the amount of tax withheld cover the amount of tax that I must pay when I file my return? This is premium content

Employers usually withhold federal income taxes at the flat rate required for supplemental wages, which is...

What is backup withholding? How do I prevent it or recover it? This is premium content

Backup withholding is a form of tax withholding on income from stock sales, along with interest income, dividends, or other types of payments that are reported on Form 1099. Your brokerage firm is required to make backup withholding if you are...

UPDATES! How does a non-US resident reclaim US backup withholding? This is premium content

If you are a nonresident alien and do not complete and file Form W-8BEN with the IRS upon receiving stock-sale proceeds, such as those stemming from equity awards, your brokerage firm will assess backup withholding on the proceeds. To reclaim backup withholding, take the following steps...

If I exercise stock appreciation rights (SARs), will I need to make estimated tax payments? This is premium content

At a minimum, at the time of your SARs exercise your company will withhold taxes from the proceeds at the required federal withholding rate for supplemental income. However, depending on your income, this minimum withholding may not be enough. If so, you will need to...

What are the federal tax-withholding rates on stock compensation? Can my company use a different rate? This is premium content

Supplemental income, such as stock compensation, is subject to one of two flat rates that are linked to rates in the income tax brackets. The rate that applies to your supplemental income depends on the...

Are my stock grants affected by the rules of deferred compensation under IRC Section 409A? This is premium content

A number of tax law provisions and interpretations that may affect your stock grants occur in...

If I leave my company to become a consultant, retire, or take another job, will taxes be withheld from my equity grants as they were when I was an employee? What if I live in another state when I receive the income? This is premium content

Most companies base withholding on your employment status at the time of grant. If you work elsewhere or are retired at exercise or vesting, then...

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...