Unvested RSUs showing on W2 as income higher than what I actually made

Thanks for the detailed explanation! So are you saying that even though I only received maybe $4-5k worth of actual RSUs in my account, the full $13.5k might be showing up on my W2 because some was automatically sold for taxes? But wouldn't that still mean I should have received about $8-9k worth after taxes? Also, any idea roughly how much these imputed benefits usually add up to? Could they really account for several thousand dollars of "phantom income"?

The vested RSUs are likely showing up correctly on your W2, but there's a common misconception about "receiving" RSUs. When RSUs vest, the entire amount is considered income at that moment, even if shares are immediately sold for tax withholding. So if $5k worth vested, you might have only received $3k worth of shares after withholding, but the full $5k appears as income on your W2. Imputed benefits can definitely add up, especially if you have substantial employer-provided life insurance or other benefits. For most employees, these typically range from a few hundred to a few thousand dollars annually, depending on your benefit elections. Your payroll department should be able to provide a detailed breakdown of exactly what's comprising your total W2 income if you're still concerned about the discrepancy.

How does the tool handle multiple W2s? I work two jobs and have RSUs from my main employer, but I get so confused trying to figure out if my withholding is correct across both positions.

I'm skeptical about these online tax tools. How accurate is it really? Does it actually explain the *Imp stuff or just make general statements anyone could figure out? My RSU situation is even more complicated because my company was acquired midyear and the stock conversion created a mess.

The tool handles multiple W2s very easily. You just upload all your documents, and it consolidates everything automatically, analyzing your total tax situation across all income sources. It's especially helpful for figuring out if your combined withholding is on target. For complex situations like company acquisitions and stock conversions, that's actually where it really shines. I was surprised at the level of detail it provided about my imputed benefits. It broke down exactly what each "Imp" item was and how it was calculated, which my own HR department couldn't even explain clearly. It also flagged specific documentation I should keep related to the RSU vesting schedule to support my tax filing.

Wait, how does this actually work? Are they just calling for you or do they have some special access? Seems weird the IRS would allow a third party to call on your behalf.

This sounds sketchy. No way it works. The IRS wait times have been legendary this year - I don't believe anything can get you through faster. Plus how would they know what questions to ask about your specific RSU situation?

They don't have special access - they use an automated system that continually calls and navigates the IRS phone tree until they get through to an agent. Once an agent answers, they connect you directly to that call. You get a text notification when they have an agent on the line, and then you take over the conversation. They don't ask any questions on your behalf - they're just handling the waiting part. Once you're connected, the conversation is directly between you and the IRS agent, so you explain your specific situation yourself. I was skeptical too, but it saved me an entire day of being stuck on hold trying to get through. The IRS actually has no idea you used a service to get connected - to them, it's just you calling in.

I checked my equity portal (it's Fidelity) and I do see some statements, but they're super confusing! One shows the original grant amount and future vesting schedule, and another shows "tax lots" but doesn't clearly explain what was withheld. Should I just contact Fidelity directly? Or would my company's payroll department be more helpful?

Contact your company's payroll department first. They're usually better equipped to explain the specific tax reporting for your situation than the brokerage. Ask them for an itemized breakdown of what's included in your W2 income and specifically how the RSUs were reported. Fidelity should have a "tax lot" view that shows exactly what happened with each vesting event, including shares sold for tax withholding. Look for terms like "net shares" (what you received) versus "gross shares" (total vested before tax withholding). Remember that even if you never saw some of those shares because they were sold immediately for taxes, you still pay tax on their full value at vesting.

Does the withholding rate change if your income is higher? I make about $180k and my company withholds 37% on RSUs which seems excessive, but maybe that's correct?

Yes, the withholding rate does change at higher income levels. For supplemental wages (including RSUs) over $1 million, the mandatory withholding rate is 37%. For supplemental wages under $1 million, the employer can choose either a flat 22% rate or aggregate the amount with your regular wages and withhold at your normal income tax rate. If your company is withholding at 37% for all RSU vesting regardless of amount, they're using a conservative approach that will likely result in overwithholding for most employees. This isn't incorrect, just cautious. Some companies do this to ensure employees don't end up with unexpected tax bills. You'll get any excess back when you file your return, or you could adjust your W-4 on your regular paychecks to compensate.

Wow, I didn't even think about the state tax aspect! That could definitely explain part of the difference I'm seeing. I'll have to go back and look more carefully at my vesting statements to see the breakdown of federal vs state withholding. Thanks for pointing this out!

Happy to help! Also check if your company does any FICA (Social Security/Medicare) withholding on the RSUs too. Some companies handle this by withholding extra shares, while others might reduce your next regular paycheck to cover these taxes. That's another reason your "received" amount might be less than what shows up as income on your W2.