What should I do with Form 3922 for my ESPP stock purchase?

Thanks for explaining! So if I haven't sold any shares yet, I don't need to do anything with the form this year? And if I did sell some shares, would Credit Karma have a way to enter this or would I need to use a different tax service?

If you haven't sold any shares yet, you don't need to do anything with Form 3922 for this year's taxes except keep it in a safe place for future reference. The form is basically documenting your cost basis for when you do eventually sell. If you did sell shares during the tax year, Credit Karma and most other tax services have sections for reporting capital gains where you can enter the information manually. Look for a section about stock sales or Schedule D/Form 8949 in the software. You'll need to enter the dates acquired (from Form 3922), date sold, proceeds from sale, and your cost basis (calculated using info from Form 3922).

How does this work with complicated situations? I have ESPP from multiple years and some qualifying and non-qualifying dispositions mixed together. Would this still work for me?

Is it secure? I'm always worried about uploading my tax documents to random websites. Does it store your tax forms or personal information after analysis?

It handles complicated situations really well. I had purchases from three different years with some qualifying and non-qualifying dispositions, and it sorted everything correctly. It even explains the difference between them and how each should be treated for tax purposes. Regarding security, they use bank-level encryption for all uploads and don't permanently store your documents. There's a privacy policy on their site that explains how everything is handled - basically the documents are analyzed and then deleted after processing. I was hesitant at first too but felt comfortable after reading through their security measures.

Wait, does this actually work? I thought it was impossible to get someone at the IRS on the phone. How long did you have to wait even with this service?

This seems sketchy. Why would I pay a third party service when I can just keep calling the IRS myself? Sounds like they're just making money off a broken system.

It absolutely works! Instead of me having to repeatedly call and navigate the phone tree only to get disconnected, they handled all that part. I got a text when an agent was about to be connected. Total wait time was about 45 minutes, but I didn't have to actively wait on the phone - I just went about my day until I got the text. Regarding why you would use this instead of calling yourself - it's all about the value of your time. I spent nearly 3 hours across multiple days trying to get through myself with no success. If you have unlimited time and patience to keep redialing, sure, do it yourself. For me, it was worth it to not deal with the frustration of getting disconnected over and over.

Thanks for pointing this out! So does that mean I should be checking my W-2 to see if some of this is already accounted for? My company gives us a 15% discount on the stock price, so I'm guessing that part might be on my W-2 already?

Yes, definitely check your W-2! Look at Box 1 which shows your total taxable wages - this typically includes the ESPP discount. Many companies report the 15% discount as ordinary income on your W-2 already. The Form 3922 becomes especially important when you sell the shares because you'll need to calculate your cost basis correctly. Your cost basis isn't just what you paid, but also includes any amount that was already reported as income on your W-2. If you don't account for this properly, you could end up paying tax twice on the same income.

I agree! I tried three different services last year and FreeTaxUSA was the only one that let me correctly enter all my stock information without getting confused.

Thanks for the tip! I might look into switching if Credit Karma can't handle this properly. I have a few other investments too, so maybe I need something more robust.

This is exactly what I needed to hear! I was getting so stressed thinking I was missing something important on my tax return. So just to confirm - I can file my taxes normally through Credit Karma this year without worrying about the Form 3922, and then when I eventually sell shares (probably not for a while), that's when I'll need to dig into all the cost basis calculations? Thanks for reassuring me that the confusion is normal - I felt like I was the only one who didn't understand this stuff!