TurboTax and RSUs: Unaccounted shares when reporting - help!

Thanks for responding! I just checked my 1099-B and you're right - the cost basis section is showing $0 for all those transactions. So even though my W-2 has the right income amount, the brokerage didn't report the cost basis correctly? Should I just manually enter the vesting price as the cost basis for each lot of shares that were sold for tax withholding? I'm worried about double-reporting income.

Yes, you should manually adjust the cost basis to match the price on the vesting date. This isn't double-reporting - it's actually preventing double taxation. When your RSUs vested, you already paid income tax on their full value through your W-2. When you enter the correct cost basis for the shares sold, you're telling the IRS "I already paid tax on these when they vested." Without this adjustment, the IRS might think you owe capital gains tax on the entire sale amount. The 483 shares you still hold should eventually be reported with this same adjusted basis when you sell them in the future. TurboTax has a specific section for RSU basis adjustments - look for it in the investment income section.

Does it work with other tax software too? I'm using H&R Block and having the same issue with my RSUs. Their support wasn't helpful at all and I'm worried about getting it wrong.

I'm skeptical about these tax tools. How does it actually know what's wrong? My situation is complicated because I had multiple vesting dates with different FMV amounts. Can it handle that, or would I be better off just hiring a CPA?

Yes, it works with any tax software because it analyzes your documents independently and shows you exactly what to enter regardless of which program you're using. I know people who've used it with H&R Block, TaxAct, and even when working with a CPA. It handles multiple vesting dates perfectly - that was actually my situation too. You upload your RSU grant documents and brokerage statements, and it creates a schedule showing each vesting date, FMV at vesting, shares sold for taxes, and the correct adjusted basis for each lot. It was surprisingly detailed and made it easy to enter everything correctly, which saved me from paying taxes twice on the same income.

Wait, how does this actually work? I thought it was impossible to get through to the IRS these days. Is this like paying someone to wait on hold for you?

I'm not buying it. There's no way to "skip the line" with the IRS. Even tax professionals have to wait on hold forever. This sounds like you're just paying for someone to wait on hold, which I could ask my teenager to do for free.

It's actually a service that keeps your place in line with the IRS and calls you back when an agent is about to be connected. They use a system that maintains your spot in the queue without you having to stay on the phone yourself. They don't skip the line or have special access - they just handle the hold time for you, which is why I actually got through instead of giving up after an hour like I usually do. When my turn came up, I got a call back and was connected directly to an IRS agent who was super helpful with my RSU questions. Much better than trying to interpret conflicting advice from random internet forums.

Thanks for mentioning this! We use E*Trade and I just found a "Supplemental Tax Information" PDF in my document center that I completely overlooked. It breaks down exactly what you described - each vest date, FMV, and shares sold for taxes. Does this form show the correct cost basis I should be using? And do I need to attach this document to my return somehow?

Yes, that supplemental tax form shows exactly what cost basis you should use! The FMV per share on vesting date is what you'll enter as the cost basis for each lot of shares. You don't need to attach this document to your tax return, but definitely keep it with your tax records. If you're ever audited, this is perfect documentation to explain why you adjusted the cost basis from what's reported on the 1099-B. TurboTax should have a checkbox somewhere in the stock sale section that says something like "Adjust basis due to RSU income on W-2" or similar wording. Check that box and enter the correct basis from your E*Trade document.

Their regular support is useless for this, but I paid extra for TurboTax Live last year and got connected with a CPA who actually knew about RSUs. She walked me through exactly where to make the adjustments in the software. Worth the upgrade if you're dealing with this regularly. She also helped me create a spreadsheet to track my RSU basis for future years, which has saved me tons of time.

Thanks for the tip about TurboTax Live! I'll give that a try. I've been thinking about switching to a CPA but they're so expensive in my area. A middle ground like this might be perfect.

This is super helpful - thank you! I just checked and my 1099-B does have that box checked. I'll make sure to use the adjustment code when I'm fixing this in TurboTax. Is this something that the IRS commonly flags? I'm worried about getting some kind of automated notice even if I do everything correctly.

It is something the IRS automated system flags if you don't handle it correctly, which is why using the proper adjustment code is important. Their matching system will compare your 1099-B to what you report, and if you don't explain the discrepancy properly, it can trigger a notice. But if you use code B on Form 8949 and include the explanation statement that TurboTax generates, you should be fine. I've been reporting RSUs this way for 5 years and never had an issue. The key is making sure you have documentation of your cost basis (like that supplemental tax form from your brokerage) in case you ever need to prove it.