How do I file taxes with RSU income on my W2 and a 1099 showing zero cost basis?

So I just went through my first year receiving RSUs from my new job, and I'm completely lost on how to handle this for taxes. My W2 from work has the RSU grants listed as income with taxes already withheld, which makes sense. But then I got this 1099 from my brokerage that's showing all my stock sales with a cost basis of ZERO for everything I sold! Basically it looks like I'm being double-taxed on the same income - once on my W2 and again on the 1099 because it's showing the full sale amount as gains since the cost basis is zero. I did get a supplemental document from my broker showing what the actual cost basis should be for each sale. But now I'm confused about how to actually file this correctly. Do I need to manually subtract the proper cost basis from whatever gain/loss is showing on the 1099? Should I just report what's on the 1099 as is? Is there a specific form I need to use to reconcile these? Any help would be seriously appreciated because I'm completely stumped and don't want to mess this up!

0 coins

18 comments

Jay Lincoln

•8M

This is a common situation with RSUs! Here's how to handle it: The RSUs are correctly reported as income on your W2 when they vest (that's why you see withholding there). Then when you sell the shares, you need to report that on Schedule D using Form 8949. The key is to adjust the cost basis on your tax return. Since your 1099 shows zero cost basis, you'll need to use the supplemental document from your broker to enter the correct basis manually on Form 8949. You'll mark the transaction with code "B" which indicates that you're reporting a basis different from what's on the 1099. Your cost basis is generally the amount already included as income on your W2 (the fair market value on the vesting date). This way, you're only taxed on any gain or loss that occurred between when the RSUs vested and when you sold the shares.

0 coins

Jay Lincoln

•8M

If you sold the shares immediately after vesting, you'd likely have a very small gain or loss (or possibly zero) since there wasn't much time for the stock price to change. You still need to report the sale, but the tax impact would be minimal. As for tax software, most programs including TurboTax should walk you through this process. When entering your 1099-B information, you'll have the opportunity to adjust the cost basis. Make sure you select the option that indicates the basis was not reported to the IRS and enter the correct amount from your supplemental document. The software should then properly code this on Form 8949.

0 coins

Marcus Williams

•8M

I was in the exact same situation last year with my RSUs and found this amazing tool that saved me hours of headache - https://taxr.ai actually specializes in analyzing RSU documentation and reconciling exactly this kind of discrepancy. I was getting so frustrated trying to manually figure out the cost basis for each transaction from my supplemental forms, especially since I had multiple vesting dates and sales throughout the year. The tool automatically identified my RSU transactions and correctly calculated the adjusted basis I needed to report. It even explained exactly how to enter everything in my tax software.

0 coins

Marcus Williams

•8M

It definitely works with multiple companies! I actually had a similar situation where I had RSUs from my current employer plus some leftover grants from my previous job that were still vesting. The tool has options to differentiate between multiple sources and handles the different vesting schedules separately. Regarding security concerns, I was hesitant too initially. The site uses encrypted uploads and you can remove personal identifiers if you want. They don't store your documents after processing - they just extract the relevant tax information. They also have a privacy guarantee on their site that details their security measures. I found it much safer than sending all my documents to a random tax preparer.

0 coins

Lily Young

•8M

Just wanted to follow up - I tried https://taxr.ai for my complicated RSU situation and it was a game changer! I uploaded my documents yesterday and it generated a detailed report showing exactly how to handle each RSU sale from both companies. It even created a line-by-line guide for Form 8949 with all the correct cost basis adjustments and codes. The best part was the explanation of how my different vesting schedules affected everything. Turns out I was about to massively overpay on taxes because I didn't realize how to properly adjust the cost basis for some of my older grants. Saved me nearly $3,000 in unnecessary taxes!

0 coins

Wesley Hallow

•8M

If you're still struggling to get this sorted out, you might want to try contacting the IRS directly. I know it sounds intimidating, but I've found that getting actual guidance from them can clear up these complicated situations. The problem is getting someone on the phone can take HOURS. I discovered https://claimyr.com which got me connected to an actual IRS agent in about 15 minutes instead of the usual 2+ hour wait. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The agent I spoke with walked me through exactly how to handle my RSU situation, confirmed I was doing the adjustments correctly, and even told me about some documentation I should keep on hand in case of questions later. Totally worth it for the peace of mind.

0 coins

Wesley Hallow

•8M

They don't have a secret number - they use a combination of tech and timing to navigate the IRS phone system efficiently. Basically, they continuously dial and navigate the IRS menu system until they secure a place in line, then immediately connect you once they're near an agent. They actually don't promise immediate access - just that they'll dramatically reduce your wait time. In my case, it was about 15 minutes instead of the 2+ hours I spent on previous attempts. The system calls you when they're close to reaching an agent, so you don't have to sit listening to hold music for hours. I was pretty amazed it actually worked.

0 coins

Grace Thomas

•8M

I feel like I need to update my previous comment. After being completely skeptical about Claimyr, I decided to try it anyway out of desperation because I had a complex question about my RSU reporting that none of the online forums could answer clearly. It actually worked exactly as described. I got a call back in about 20 minutes saying they were approaching an agent, and a few minutes later I was talking to someone at the IRS. The agent spent almost 30 minutes with me going through every detail of how to properly report RSUs with incorrect cost basis on my 1099. The guidance I got was super specific to my situation and cleared up all my confusion. They explained exactly which forms and codes to use and how to document my adjustments. I'm genuinely surprised and impressed.

0 coins

Hunter Brighton

•8M

Ah Schwab can be tricky with RSUs. Their supplemental document requires some manual work unfortunately. The lot numbers on the supplemental document should correspond to specific grant dates, not necessarily the sale dates on your 1099-B. You'll need to match each sale on your 1099-B with the appropriate lot(s) on the supplemental document. Look for matching quantities and dates that are close together. Sometimes a single sale on the 1099-B might include shares from multiple lots on the supplemental document, which means you'll need to calculate a weighted average cost basis for that transaction.

0 coins