Comments on: Restricted Stock Units (RSU) Sales and Tax Reporting

By: confused

confused — Tue, 18 Aug 2009 08:48:24 +0000

I have yet another RSU question. I'm doing my taxes. On my W-2 the amount of money I made from the sale of my RSU's is included with "Wages, Tips & Other Compensation." My company sold shares for taxes also. How do I avoid double counting this. I've included Wages, Tips and Other Compensation on line 7 of the 1040, but then it asks about the schedule D on line 13. If I add those 2 together I'm double counting proceeds from my RSU's. I'm going crazy. Note, I'm not using Turbo Tax or anything.
Thanks!

By: Linda Dalton

Linda Dalton — Fri, 14 Aug 2009 21:08:50 +0000

That was so well explained–thank you very much!! We have never received RSU's before, and I had many confusing questions in my mind regarding the tax handling of these shares. Your article explained everything very clearly!!

By: TFB

TFB — Wed, 22 Jul 2009 23:17:35 +0000

Liz – Did you ask the company in question? I believe the tax is calculated based on the date when the RSUs are not subject to forfeiture (vesting date). When the RSUs are actually delivered to you or when you are able to sell the shares are not relevant.

By: Liz Mitchell

Liz Mitchell — Wed, 22 Jul 2009 20:22:02 +0000

How is tax computed on RSU's if the company does not deliver the RSU's to the employee until 15 days after the vesting date, and does not allow any transactions during this period (ie employee still is restricted from using the RSU's)? Assume company withholds just enough shares to cover the tax withholding as calculated on the date of vesting (Sell to Cover).

By: TFB

TFB — Tue, 24 Mar 2009 21:28:18 +0000

@J – I said this a few times in the replies already. I think the simplest way to do this is bypassing the TurboTax handholding for RSUs. Use the Spreadsheet-Style Entries. Not all versions have the extra guidance. That guidance really confuses you more than helping you. The Spreadsheet-Style Entries are much simpler and clearer.

By: J

Tue, 24 Mar 2009 18:52:18 +0000

Regarding your Oct 13th post: "I suggest that you either say YES to that question so TurboTax doesn’t modify your W-2 or not use the RSU section altogether and just enter 3 regular investment sales instead."

What are the implications of saying YES or entering regular investment sales?

I ran into a similar situation where Turbotax wanted to correct my R2. Its RSU calculation (that it wanted to use to update my 2008 W2) seemed to add the vesting value for RSUs from 2007 to the vesting value for 2008 because I sold some RSUs during 2008 that vested in 2007. The vesting value for 2007 had already been account for on my 2007 W2.

By: Paul

Paul — Sun, 22 Mar 2009 21:46:58 +0000

I received an RS award in 2008 (334 RSUs @ $4.30). I am using Turbo Tax Deluxe, Where is this info reported, so I can pay the tax on this?

By: TFB

TFB — Wed, 18 Mar 2009 02:04:10 +0000

@Ali – You do nothing.

By: Ali

Ali — Wed, 18 Mar 2009 01:51:01 +0000

My RSU situation is sort of complicated. I had 108 shares given to me by my company in March 2008 that were not supposed to completely vest for 2 years. My company was purchased in late 2008 (prior to the shares being vested) and as part of the buyout, the company paid out the shares (as if they were fully vested) in the form of a ash payout to a brokerage firm. I was taxed at my normal tax rate, as if the award was a cash bonus. The income and taxes were included on my W-2. However, I received a 1099 with all $0 amounts. After speaking with the brokerage firm that handled the transaction, they explained that the shares were never officially awarded (since the company dissolved) and that they were only used by my company to ditribute the cash equivalent to the shares. So my question is, do I treat the money as an Asset that generates Capital Gains (like it's a stock sale) and complete Schedule D or do I treat it as additional income that's already included on my W-2 and do nothing further? I'm using TaxCut to prepare my taxes.

By: TFB

TFB — Thu, 05 Mar 2009 04:46:46 +0000

Tom – It's possible but only your employer knows for sure.