I filed married jointly and have a kid. Last year we were refunded some money but this year, I had some stocks that company gave me. I went over the form few times already but it's just sad to pay 10k this time. About 45% tax on stock! Am I doing it in a wrong way? I dont have 401k or espp or other fancy things.
check that you're not double counting the tax on your stock.
Most brokers don’t accurately withhold the correct amounts based on what bracket your sales will put you into. Also they transmit the unadjusted cost basis to the IRS, what that means is if you don’t submit the corrected or adjusted cost basis for your sales, you’ll be double paying your taxes on your stock sales. If you use someone like E*TRADE look for a supplemental 1099 form which should have the adjusted cost basis numbers for you to manually type in
Ditto this- I used the broker tax documents and paid double taxes one year. Next year I didn’t have the time so I paid someone who manually calculated it and then fixed the previous year a I got a ton of money back.
Check if the cost basis for your RSUs is correctly set. TurboTax seems to be unable to correctly import these values from a 1099-B form.
Second checking cost basis, sometimes brokers set it at zero.
You can also pay an estimate and file an extension
Is this stock from MSFT? Go to the Fidelity website and find the tax documents. You need to get the correct cost basis. MSFT should have included the stock as part of your income on your W2.
Yes it is.. and its part of wage in my w2. I will check the fidelity then. Thanks!
Tax should have been withheld on RSU grant when it vested. Likely, you only got part of the shares. Rest went to taxes and was reported on your w2. This is done now to avoid that big tax surprise for people. RSUs are taxed as ordinary income so tax rate should be same as the top rate on rest of income unless RSUs put you into a higher bracket.
The auto share withholding generally is 25% for federal which usually isn't enough for tech workers.
Just file for an extension it is a one page form in turbo tax . this is an extension to file not to pay so pay an estimate
Is this for RSU?