Tax Center › NQSO Tax Returns

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! If you sold shares in 2020 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 2021. 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.

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.

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.

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.

Major changes have occurred in tax-return reporting in recent years, making accurate tax-return reporting more complex and difficult...

The mistake that triggered the notice is easy to make with a cashless exercise. Because the stock sale upon a cashless exercise does not generate any gains, taxpayers often do not realize that they still need to report the sale on Form 8949 and Schedule D of the Form 1040 tax return...

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...

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...

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

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...

You need to complete Form 8949 and Schedule D for the year of your stock sale and file them with your IRS Form 1040 tax return. You must...

You should list this stock sale on your Form 8949 and include it in the totals on Schedule D. These forms are used to...

To report the sale of shares in a sell-to-cover exercise, you complete Form 8949 along with Schedule D for the year of...

Don't confuse NQSOs with incentive stock options. This situation is different...

The details of the shares you sold go on Form 8949, and Schedule D collects just the column totals from that form. The instructions of Form 8949 require you to...

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...

The full spread is included in your gross income for the year of exercise and is taxed in the same way that your...

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

You should almost always receive Form 1099-B. The only exception occurs if certain requirements under IRS Rev. Proc. 2002-50 are met. This revenue procedure allows...

Let's first review the tax rules and the W-2 reporting. The tax basis for...

The tax law says that you can offset losses against only the same type of income. This means you cannot use capital losses to offset ordinary income. However...

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

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...