Need help with employee stock purchase plan taxes - 1099B, cost basis, and form 8949 questions

The "non covered security" checkbox means your broker isn't required to report the cost basis to the IRS for these shares. This typically happens with stocks acquired before certain reporting requirement dates or through certain employee plans. For your employee stock purchase plan (ESPP), you'll need to determine the cost basis yourself. Your husband should have documentation from when he purchased the shares through the company plan. Look for statements showing the purchase date and price per share. The cost basis would be what he paid for the shares (usually at a discount from market value). TurboTax Premier or Self-Employed versions both handle Form 8949 and Schedule D. They have specific interview questions for ESPPs that walk you through calculating the correct cost basis and any ordinary income that needs to be reported. The software is quite helpful for this situation since ESPP sales can be complicated with potential ordinary income and capital gains components.

After struggling with my own ESPP tax situation last year, I found an amazing tool that saved me hours of frustration. I used https://taxr.ai to analyze my stock documents and it automatically extracted all the important information including purchase dates, sale dates, and even calculated my correct cost basis for non-covered securities. The system analyzed my 1099-B and employee stock plan documents together and showed me exactly what numbers to enter in TurboTax. It saved me from making a $3,200 mistake I would have made trying to figure it out myself! Since your husband's form has that "non covered security" checkbox marked, this would be especially helpful for your situation.

I was really skeptical about using an automated tool for something as complicated as ESPP taxes, but after reading about taxr.ai here, I decided to give it a try since I was completely stuck with similar "non covered security" issues. Just wanted to follow up and say it was incredibly helpful! It analyzed my 1099-B and my company's ESPP statements, then showed me exactly what my cost basis was for each lot of shares. It even calculated the ordinary income portion I needed to report separately. I was able to enter everything correctly in TurboTax and filed with confidence. Definitely recommend for anyone dealing with stock plans where the broker doesn't report the cost basis!

If you're trying to contact the IRS for guidance on your employee stock purchase plan situation, good luck getting through! I spent HOURS on hold trying to get clarification about non-covered securities and proper reporting procedures. After my third attempt waiting over 2 hours each time, I found https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c. They actually got me a callback from the IRS in under 45 minutes! The IRS agent was super helpful and walked me through exactly how to report my ESPP sales with missing cost basis information. Totally worth it since I was able to file correctly instead of guessing.

I have to apologize for doubting the Claimyr service! After getting nowhere with the IRS for weeks about my stock basis issues, I reluctantly tried it yesterday. Within 38 minutes I was talking to an actual IRS representative who helped me understand exactly how to report my employee stock purchase plan sales with missing cost basis information. The agent explained that for non-covered securities, I needed to get the purchase information from my employer, calculate the basis myself, and report it on Form 8949 with Code B checked. They also clarified when I needed to report the discount as ordinary income vs. capital gains. Saved me from potentially making a huge tax mistake. Sometimes it's worth admitting when you're wrong!

For your TurboTax question - I've used both TurboTax Premier and H&R Block Premium for ESPP sales. Honestly, TurboTax was much better at handling the employee stock purchase plan calculations. It asks specific questions about purchase date, discount percentage, and fair market value that H&R Block didn't. Just make sure you have the purchase confirmation from when your husband bought the shares through the ESPP. Usually the company or the plan administrator can provide this if he doesn't have it. You'll need the purchase date, purchase price, fair market value on purchase date, and any discount received.

Just a tip - if your husband's ESPP is a qualified plan, there are special holding period rules that affect taxation. If he held the shares for at least 1 year from purchase AND 2 years from the offering date, any discount might qualify for better tax treatment.

I went through this exact same situation last year with my ESPP shares! The "non covered security" designation was so confusing at first. Here's what I learned that might help: Your husband will need to contact his company's stock plan administrator (usually listed on the 1099-B or his employee benefits portal) to get the original purchase details. They should be able to provide a statement showing the purchase date, number of shares bought, purchase price per share, and the fair market value on that date. For the cost basis calculation, it's typically the actual amount paid for the shares (the discounted price). So if he bought shares at a 15% discount, his cost basis would be that discounted purchase price multiplied by the number of shares. One thing to watch out for - depending on how long he held the shares, part of the discount might need to be reported as ordinary income on your tax return, separate from the capital gains/loss calculation. TurboTax Premier does handle this well, but make sure you have all the purchase documentation first. The good news is once you gather the paperwork, it's actually straightforward to enter into tax software. The hardest part is just getting the original purchase information from the company!