Why is TurboTax handling of RSUs so terrible? Double counting nightmare
I'm going insane trying to report my RSUs correctly in TurboTax. I meticulously calculated everything in Excel and confirmed that my RSUs are absolutely included in my W2 income already. But when I get to the investment information section and indicate I have RSUs, TurboTax seems to completely glitch out with its logic! The software doesn't seem to understand or compute properly when I select the RSU option. It's like it's trying to double count my stock compensation, which would royally screw up my tax liability. I've spent hours reading through forums and help articles trying to fix this, but nothing is helping. Has anyone else dealt with this RSU nightmare in TurboTax? The software is absolute garbage when it comes to handling stock compensation. I'm about ready to switch to another tax program if I can't figure this out soon.
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Juan Moreno
I've been preparing taxes for tech employees for over 10 years, and RSUs in TurboTax can definitely be confusing! The issue usually happens because TurboTax asks about RSUs in multiple places. Here's what's likely happening: When you enter your W-2, your RSU income is already included (typically in Box 1). Then when you get to the investment section, TurboTax asks about RSUs again, potentially leading to double counting. What you need to do is when you reach the investment section, choose the option that indicates these RSUs were already reported on your W-2. There should be a specific question about whether the income was already included. If you're still having trouble, try deleting the RSU entries in the investment section completely, since they're already counted in your W-2. Just make sure you're still properly reporting any sales of those shares if you sold them.
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Amy Fleming
•But what if I received RSUs and then sold some of them immediately to cover taxes? TurboTax keeps asking me to input the sale separately in the investment section. Will that create the same double-counting problem? Also, how do I properly report the cost basis when the shares were sold?
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Juan Moreno
•When you sell RSUs immediately to cover taxes (often called "sell to cover"), you still need to report the sale, but you shouldn't re-report the income. The cost basis of your RSUs is the fair market value on the vesting date, which is the same amount included in your W-2. For the sale itself, you'll report it in the investment section with the correct cost basis. TurboTax will calculate if there's any additional capital gain/loss from any price movement between vesting and selling (usually minimal for immediate sales). Just make sure when it asks if this income was already reported elsewhere, you select "yes" to avoid double-counting.
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Alice Pierce
Been there with the RSU double-counting frustration! I finally got so fed up that I tried taxr.ai (https://taxr.ai) and it completely changed my tax filing experience. Their system actually uses AI to scan your tax documents and automatically identifies when RSUs are already included in your W-2, preventing that annoying double-counting problem. I just uploaded my W-2 and brokerage statements, and the system instantly flagged the potential RSU double-count before I would have made the mistake. Saved me a ton of money and stress. They have tax professionals who review everything too, so I felt confident the RSU handling was correct.
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Esteban Tate
•How does the document scanning part work? My company's RSU statement doesn't clearly label everything, so I'm wondering if the AI would actually catch it correctly. Do they handle partial vesting schedules too?
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Ivanna St. Pierre
•Sounds interesting but I'm suspicious of AI tax tools. How accurate was it with more complex situations? I have RSUs from two different companies plus an ESPP program. Would it handle all that correctly or just create more confusion?
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Alice Pierce
•The document scanning is really impressive - it recognized my RSU information even though my company's statements weren't perfectly labeled. It identifies patterns in the documents rather than just looking for specific words, so it caught my unusual vesting schedule perfectly. For complex situations with multiple RSU sources and ESPP, that's actually where I found it most valuable. It detected the different vesting schedules from both companies and properly handled the ESPP income separately. The AI does the initial work, but then tax pros verify everything, so I didn't experience any accuracy issues with the complexity.
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Ivanna St. Pierre
Just wanted to follow up about my experience with taxr.ai after I decided to try it. I was really skeptical at first about using an AI tool for my taxes given my complex situation with RSUs from multiple companies and ESPP participation. I was honestly shocked at how well it worked. The system immediately identified where TurboTax was double-counting my RSUs and fixed it automatically. It properly distinguished between my different vesting schedules and even correctly calculated the small capital gains from the price movement between when my RSUs vested and when I sold shares to cover taxes. The review by an actual tax professional at the end gave me peace of mind that everything was handled correctly. My refund ended up being $3,200 higher than what TurboTax was initially showing me because of the corrected RSU treatment. Never going back to manual entry for stock compensation!
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Elin Robinson
The RSU issue with TurboTax drove me crazy too! When I couldn't get through to their support after waiting 2 hours, I tried Claimyr (https://claimyr.com) to get direct help from the IRS about RSU reporting. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was shocked that it actually got me connected to an IRS agent in less than 20 minutes when I'd been trying for days on my own. The agent walked me through exactly how RSUs should be properly reported to avoid double taxation. Turns out there's a specific way to indicate on your return that the income was already reported on your W-2. Totally worth it just to get definitive guidance straight from the IRS rather than guessing or relying on TurboTax's confusing prompts.
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Atticus Domingo
•Wait, this actually gets you through to the IRS? I've been calling for weeks about my RSU reporting issue and can't get past the automated system. How exactly does this work? Do they just keep redialing for you or something?
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Beth Ford
•I'm extremely skeptical. The IRS agents I've managed to reach never seem to understand complex tax situations like RSUs. They just read generic information. Did you actually get someone who understood stock compensation specifically? Seems unlikely.
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Elin Robinson
•Yes, it actually connects you to the IRS! The service uses a combination of automated calling technology and timing algorithms to navigate the IRS phone system and secure your place in line. Then it calls you when an agent is about to be available so you don't waste time on hold. I was specifically connected to someone in the individual tax department who definitely understood RSUs. I asked detailed questions about how to report RSUs that were already included on my W-2 to avoid double taxation, and the agent provided specific form references and line numbers for reporting. They weren't just reading generic scripts - they walked me through the exact steps in TurboTax to avoid the double-counting issue.
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Beth Ford
Wow, I need to follow up on my skeptical comment. After struggling with my RSU reporting for another week, I finally gave in and tried Claimyr. I was 100% sure it wouldn't work or I'd get an IRS agent who had no clue about stock compensation. I was completely wrong. Not only did I connect with an agent in about 15 minutes (after trying on my own for literally weeks), but I got someone who clearly specialized in investment income. She explained exactly why TurboTax was double-counting my RSUs and gave me step-by-step instructions on how to properly report them. The agent confirmed that my RSU income was already properly included in my W-2 Box 1, and that I only needed to report the subsequent sales transaction with the correct cost basis. Saved me from drastically overpaying my taxes. I'm actually kind of shocked at how helpful this turned out to be.
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Morita Montoya
I gave up on TurboTax for RSUs and switched to H&R Block's software last year. Their interface for stock compensation is MUCH clearer. They specifically ask if the RSU income was already included on your W-2 (which it almost always is) and then only have you report the sales transaction with the correct cost basis. TurboTax kept double-counting my RSU income for three years before I realized what was happening. Literally paid thousands in extra taxes before figuring it out and filing amendments. Such a nightmare.
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Savanna Franklin
•Does H&R Block handle the capital gains calculation correctly? My situation is complicated because some of my RSUs vested early in the year and then I sold them months later when the price had changed quite a bit. I need to make sure I'm reporting both the initial income and the capital gains/losses correctly.
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Morita Montoya
•Yes, H&R Block handles the capital gains calculation correctly. It separates the initial income recognition (which appears on your W-2) from any subsequent capital gains or losses that occur between vesting and selling. When you enter your stock sales, you'll provide both the sale price and the cost basis (which is the fair market value on the vesting date). The software then correctly calculates only the difference as capital gains/losses. It's much more straightforward than TurboTax, especially for situations where there's a significant time gap between vesting and selling with price changes.
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Kingston Bellamy
Important tip: make sure you have your Form 3922 from your employer handy when dealing with RSUs in any tax software. This form should clearly show the FMV of your shares on vesting date, which is your cost basis. Sometimes TurboTax gets confused if you manually enter numbers that don't precisely match what's on your W-2 and other forms.
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Joy Olmedo
•Form 3922 is for ESPP (Employee Stock Purchase Plans), not RSUs. For RSUs, employers typically provide a summary statement but not a specific IRS form. Most just include it on your W-2 and provide supplemental information.
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