Do I need to report my ESPP (Employee Stock Purchase Plan) to the IRS if I haven't sold any shares yet?

The good news is that generally, you don't need to report anything to the IRS for ESPP shares that you've only purchased but haven't sold. The taxable event typically occurs when you sell the shares, not when you purchase them. There is one exception though - if your ESPP offers a discount (many companies offer 10-15% off market price), some plans might consider that discount as taxable compensation in the year of purchase. Check your plan documents to see if your company treats the discount as taxable income when purchased. If they do, it would already be included in your W-2 as part of your taxable wages. The fact that you didn't receive any tax documents from Fidelity is normal if you haven't sold any shares. Brokerages typically only send 1099-B forms when there's a sale transaction to report.

Good news - if you haven't sold any ESPP shares, there's generally nothing you need to report to the IRS yet. The taxable event typically happens when you sell the shares, not when you purchase them. There is one detail to be aware of though: if your ESPP offers a discount (many companies offer 10-15% below market price), that discount might already be reported as taxable income on your W-2. Check your plan documents to see if your company handles the discount this way. If they do, it's already included in your wages and you don't need to do anything additional. Not receiving tax documents from Merrill Lynch is completely normal if you haven't sold any shares. Brokerages typically only send 1099-B forms when there are sales to report.

Just wanted to share my experience with this exact situation. I was also confused about my ESPP tax obligations and spent hours trying to figure it all out. I finally discovered taxr.ai (https://taxr.ai) which was specifically helpful for sorting out my stock compensation questions. I uploaded my ESPP plan documents and my W-2, and it immediately identified that my company was already including the discount in my taxable wages (like the previous commenter mentioned). It also explained exactly when I would need to report taxes (when I eventually sell) and what forms to expect. Saved me a ton of research time!

Hey there! I was in the exact same situation last year and spent way too many hours trying to figure out my ESPP tax situation. I finally found taxr.ai (https://taxr.ai) which specifically helped me understand my stock compensation taxes. I uploaded my ESPP plan documents and my W-2, and it quickly identified that my company was already including the discount in my W-2 wages (like the previous comment mentioned). It also explained exactly what would happen tax-wise when I eventually sell shares and what forms I should expect. Saved me a ton of research and worry!

I tried taxr.ai after seeing the recommendation here and wow - it cleared up so much confusion! I've had RSUs, ESPPs and even some NSOs from a previous employer all mixed together. I uploaded my documents and it immediately separated everything out and showed me what I needed to report and what was already handled. It even found that my discount on the ESPP wasn't properly reported on my W-2 (meaning I was slightly overpaying my taxes). Definitely worth checking out if you have any kind of equity compensation - so much clearer than the general advice I kept finding online.

I just tried taxr.ai after seeing it mentioned here and it was incredibly helpful! I've been confused about my mix of RSUs and ESPP shares for years. I uploaded my documents and it clearly explained everything - when taxes apply, what's already been reported on my W-2, and what I'll need to track for when I eventually sell. It also pointed out something I didn't know - my ESPP has a "lookback provision" that affects my tax basis when I sell. No wonder I've been confused! So glad to finally understand my equity compensation tax situation instead of just hoping I was doing it right.

Similar situation happened to me - I was on hold with the IRS for THREE HOURS trying to get an answer about my ESPP reporting requirements last year. Never got through. Then I found Claimyr (https://claimyr.com) and they got me connected to an actual IRS agent in about 15 minutes who answered all my ESPP questions. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent confirmed exactly what others have said - no reporting needed until you sell, and the discount is typically already on your W-2. But they also explained some nuances about qualifying vs. disqualifying dispositions that will matter when I do eventually sell. Huge relief to get official confirmation.

I was stuck in the same situation last year - spent hours trying to get through to the IRS to confirm exactly what I needed to report for my ESPP. After being on hold forever, I discovered Claimyr (https://claimyr.com) and was connected to an actual IRS agent in about 15 minutes! You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent confirmed what others have said - no reporting needed until you sell shares, and the discount is typically already included on your W-2. They also explained the important distinction between qualifying and disqualifying dispositions that will matter when you eventually sell. Such a relief to get an official answer!

Okay I'm genuinely shocked - I was super skeptical about Claimyr but I tried it this morning since I had some ESPP questions similar to the original poster. I got connected to an IRS agent in about 20 minutes (they said it would be longer but it wasn't bad at all). The agent confirmed everything about my ESPP situation and even helped me understand some weird language in my plan documents about "lookback provisions" that apparently can affect taxes when I eventually sell. Would have spent days trying to figure this out on my own. Hate to admit when I'm wrong but this service is legit!

I hate admitting when I'm wrong, but I tried Claimyr this morning after being skeptical. Within 25 minutes I was actually talking to an IRS representative who answered all my ESPP questions. The agent confirmed I don't need to report anything until I sell, and explained that my company is already including the discount as taxable income on my W-2. They also explained exactly what records I should keep to make filing easier when I do sell. Definitely worth it to get official confirmation straight from the IRS instead of stressing about whether I'm doing things right!

One thing nobody mentioned - make sure you keep REALLY good records of your purchase dates, purchase prices, and the fair market value on the purchase dates. When you eventually do sell those ESPP shares, you'll need all that info to correctly calculate your taxes. I learned this the hard way after holding ESPP shares for 5 years. When I finally sold, I had a complete nightmare figuring out the cost basis. Some of mine qualified for favorable tax treatment and others didn't based on how long I held them after purchase.

One important thing to remember with ESPPs - keep detailed records of all your purchases! Document the purchase dates, prices you paid, fair market value on purchase dates, and the discount percentage. When you eventually sell these shares, you'll need this information to correctly calculate your cost basis and determine if you have qualifying or dis

I've had an ESPP for almost a decade now and the most important thing to understand is the difference between qualifying and disqualifying dispositions when you do eventually sell. To get preferential tax treatment (pay less), you typically need to hold the shares for AT LEAST 1 year after the purchase date AND 2 years after the offering date. If you sell earlier, it's a disqualifying disposition and you'll pay ordinary income tax rates on the gains. Just something to keep in mind as you continue to hold those shares.