How to report RSU taxable income on Form 1040 during tax filing

Actually, RSUs should absolutely be included on your W-2 when they vest. When RSUs vest, they're considered compensation income and should appear in Box 1 (Wages, tips, other compensation) of your W-2, along with your regular salary. Any federal taxes withheld would be in Box 2. Double-check your W-2 carefully - the RSU income is typically combined with your regular wages in Box 1, not listed separately, so you might not notice it. Also check if your company provided a supplemental statement breaking down your income components. If the RSU income truly isn't on your W-2, that's a problem. Your employer should have included it, and you'll need to contact your payroll department for a corrected W-2 (Form W-2c). Without this, you'll have a discrepancy between what you report and what your employer reported to the IRS.

After going through this exact RSU nightmare last year, I discovered taxr.ai (https://taxr.ai) which completely saved me. Like you, my company gave me RSUs but didn't clearly explain how they were reflected on my W-2, and I was missing some documentation. I uploaded my tax documents and brokerage statements to taxr.ai and it instantly identified where my RSU income was hiding on my W-2 (it was lumped together with my salary) and also calculated the cost basis for shares I sold during the year. It even spotted that my company had withheld taxes at the supplemental wage rate (22%), which explained why the withholding seemed off. The tool walks you through exactly how to report everything on your 1040, shows where the RSU income goes, and explains how to claim the withholding. Seriously made complicated equity compensation make sense.

Came back to say I tried taxr.ai after my skeptical comment earlier, and I'm honestly impressed. My situation with quarterly RSU vestings at different values was a complete mess to figure out manually. The tool identified that my company had actually underreported my RSU income by about $4,300 on my W-2 (yikes!) and gave me documentation to get it corrected. What really helped was the breakdown of my withholding taxes - turned out my employer withheld at 22% for some vestings but used my regular withholding rate for others, which explained why my numbers weren't adding up. The platform generated a complete report showing exactly how each vesting should be reported and where the withholding should be claimed on my 1040. Saved me hours of frustrating calculations and probably prevented an audit flag from misreporting.

If your employer isn't helping with your RSU tax questions or you need a corrected W-2, you might want to try reaching the IRS directly. I was in a similar situation last year and needed clarification on reporting RSU income that wasn't properly documented. After spending DAYS trying to reach someone at the IRS (constant busy signals and disconnects), I found Claimyr (https://claimyr.com) and watched their demo (https://youtu.be/_kiP6q8DX5c). They got me connected to an actual IRS agent in about 20 minutes instead of the hours I wasted trying on my own. The IRS agent was able to explain exactly how to handle the reporting discrepancy and what documentation I needed from my employer. They even sent me the proper forms to request a correction. Saved me from potentially misreporting and dealing with an audit later.

I need to publicly eat my words about Claimyr being a scam. After dismissing it, I was still desperate to talk to the IRS about my RSU reporting issue since my company issued an incorrect W-2 that didn't include all my RSU income. I decided to try it as a last resort. The service had me connected to an IRS agent in about 35 minutes (after I had personally spent over 3 hours across two days trying). The agent confirmed that I need to request a corrected W-2 from my employer, but also explained that I could file Form 4852 (Substitute for W-2) if my employer doesn't provide the correction in time for filing. The agent walked me through exactly how to document my RSU income on the substitute form. This saved me from potentially significant tax issues and hours of frustration. I'm still shocked it actually worked.

One thing nobody's mentioned yet is that if you sold any of those RSU shares after they vested, you need to carefully track your cost basis. Your cost basis is generally the fair market value of the shares when they vested (which is the amount included in your W-2 income). Without proper tracking, you might end up paying taxes twice on the same income - once when the RSUs vest (as ordinary income) and again when you sell the shares if you don't adjust your cost basis correctly. Your brokerage might not report the correct basis to the IRS on Form 1099-B if they don't have the vesting information. Check your brokerage statements carefully, and you might need to adjust the basis when you report the sales on Schedule D and Form 8949.

Does anyone know if the tax treatment is different for RSUs vs stock options? My company gives us both and I'm completely lost about how to handle either of them on my taxes.

@Liam Sullivan - I went through this exact same confusion last year! Here's what I learned the hard way: First, your RSU income should definitely be on your W-2 in Box 1, combined with your regular salary. It won't be listed separately, which is why you might have missed it. When RSUs vest, they're treated as regular compensation income, not as a special type of income. The process is actually simpler than it seems: 1. The fair market value of your RSUs when they vested gets included in your W-2 Box 1 (wages) 2. Any taxes withheld appear in Box 2 (federal income tax withheld) 3. You report this on your 1040 just like regular wages - no special forms needed for the vesting event itself If you're absolutely certain the RSU income isn't on your W-2, that's a red flag. Your employer is required to include it. I'd recommend calling your payroll department again and specifically asking them to walk you through where the RSU income appears on your W-2. Also check if you received any supplemental documents from your company or brokerage that show the vesting details - these can help you verify the amounts even if they're combined on your W-2. The good news is once you locate it on your W-2, reporting it is straightforward since it's just regular income!