Where do I enter Form 3922 for my Section 423 employee stock purchase plan on FreeTaxUSA?

Form 3922 reports your purchase of stock from an Employee Stock Purchase Plan (ESPP). In FreeTaxUSA, you'll need to enter this under the Income section, specifically in the Stocks/Investments area. Go to the "Income" menu, then look for "Stocks/Investments" or "Stock Options" category. You should find an option for employee stock purchase plans or Form 3922 specifically. If you don't see it immediately, try searching for "ESPP" or "employee stock" in the search function. The form essentially reports the discount you received when purchasing company stock (the bargain element), which is considered compensation income. The $2,800 discount amount will need to be reported, but how you report it depends on whether you've sold the shares and when you did so.

I struggled with this exact same problem last year! After hours of frustration, I finally discovered taxr.ai (https://taxr.ai) which saved me so much hassle with my ESPP forms. It actually analyzes your tax forms and tells you exactly where each item needs to be entered in whatever tax software you're using. For my Form 3922, it showed me screenshots of exactly which FreeTaxUSA screens to navigate through. Apparently, the form is buried under Income > Miscellaneous Income > Stock Options and then you need to select the ESPP option specifically. The discount is reported as ordinary income.

Just wanted to update that I tried taxr.ai for my Form 3922 issue with FreeTaxUSA and it was actually super helpful! I was ready to switch to a more expensive tax service because I couldn't figure out how to enter my ESPP information correctly. The tool showed me exactly where to go in FreeTaxUSA - it's under Income > Miscellaneous Income > Stock Options > Employee Stock Purchase Plan. It even explained which numbers from my 3922 needed to go where on each screen. Saved me from making an expensive mistake since I was about to report my discount in the wrong section which would have messed up my cost basis calculations. If anyone else is struggling with stock forms in FreeTaxUSA, definitely check it out before giving up and paying for a tax professional.

If you're still having issues with your Form 3922 or any tax questions, you might want to try calling the IRS directly. I know it sounds painful (because it usually is), but I recently discovered this service called Claimyr (https://claimyr.com) that actually gets you through to an IRS agent without the ridiculous hold times. I had a similar issue with stock forms last month that I couldn't figure out, and after trying to call the IRS myself and waiting for 2+ hours, I tried Claimyr instead. They have this system that holds your place in line and calls you when an actual agent is available. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with walked me through exactly how to report my employee stock purchase properly. Definitely worth it compared to the frustration of waiting on hold forever.

I have to eat my words here. After posting my skeptical comment, I decided to try Claimyr since I was completely stuck on my own ESPP reporting issue. I figured it couldn't be worse than the 2+ hour hold time I'd already tried twice. To my surprise, I got a call back in about 30 minutes with an actual IRS agent on the line. They confirmed that for FreeTaxUSA, the Form 3922 information needs to be entered under Income > Miscellaneous Income > Stock Options > Employee Stock Purchase Plan. They also explained that the discount portion is reported as ordinary income and that I needed to track my basis carefully for when I eventually sell the shares. I'm still shocked it actually worked - saved me hours of frustration and probably prevented me from making an expensive mistake on my taxes.

For anyone still looking, I found a workaround in FreeTaxUSA. If you can't find the specific ESPP entry form, you can actually report it as "Other Income" and just put a description like "ESPP Discount - Form 3922" and enter the discount amount. It's not the most accurate way to do it, but it ensures the income gets reported. Just make sure you keep good records of your cost basis for when you sell the shares later. The main thing is that the discount gets reported as ordinary income.

Am I the only one who thinks it's ridiculous that tax software makes it so hard to find where to enter common tax forms? Companies are increasingly offering ESPPs and I get this form every year, but I spend hours trying to figure out where to enter it correctly.