Poll: RSU Sell to Cover Double Tax? Fidelity Wrong?
When my RSUs vested, I sold to cover the taxes. Now, my W2 shows the value of all my new RSUs (box 14) and it doesn’t seem to give me credit for the RSUs I sold (taxes to cover that income). My withholding on the W2 doesn’t reflect the RSUs I sold to cover (money I basically never got). But, when I add my 1099-B; my taxes grow, based on the RSUs I sold to cover (the ones I kept don’t show up). I read some earlier posts that Fidelity is doing something wrong. Are they? (Or did other people in Blind just make a mistake?) EDIT: Thanks a lot for the comments. It makes perfect sense now; the software was doing it wrong. If you think otherwise, feel free to DM and I can share what I learned so you can save on your taxes too. EDIT2: If you really think me/others are wrong, please tell us why so we can figure this out. TC: 270
You need to update the cost basis manually for the RSUs that sold to cover the tax. Tax software doesn’t handle it automatically.
Awesome tip! I guess you make that change on the 1099-B?
So, the cost basis is basically the same price as the sale price, right? Since it sold upon vesting
In 1099 there is a page called supplement stock plan lot details. It has correct info like date of acquisition, date sold, proceeds, ordinary income reported, adjusted cost
I think I found it… do you put the same value as the sale value? (Since it sold upon vesting?)
Thanks for the extra info; will review
Iirc they sell to cover federal tax you also need to withhold to account for state tax. Also gets more complicated if you get rsu from two diff companies or sell your rsus and etc
I talked to fidelity about this as well and was told that for vesting RSUs they are required to send us 1099 form, but we do not need to include when filing taxes since 1099 supplement says that vesting shares were reported as income. Still waiting my tax return to be approved by IRS though....
TurboTax has a way to properly adjust for RSUs but it’s all manual. So yes it shows up on W2, shows up on 1099, but generally your withheld federal tax is also added on W2 paid taxes and then manually go in and mark which lots are RSUs (same with ESPP) and get cost basis input correctly and then it will reflect correct tax.
Use the adjusted cost basis
If you think they are doing it right, do you care to elaborate? Or can I DM you for a quick question?