This video will explain to you how you can get DOUBLE-TAXED on your RSU, and what you need to do to avoid this. This is a basic presentation on how to file taxes on your RSU (Restricted Stock Units).
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🔴 Disclaimer
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The author of this video is not a certified financial advisor nor a tax expert. Please consume this video for educational purposes only and not take it as professional financial advice.
🔴 Summary
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RSU(s), Restricted Stock Units, are a common form of benefit tech companies offer their employees in this day and age.
However, how RSUs are taxed is not commonly known. The way the brokers record the details of your RSU sales is also not commonly known.
RSUs are actually considered as traditional income and are taxed as such on the day they vest. Your company withholds the amount of stocks equaling the amount of taxes you owe to the government. So the cost basis of your RSUs is the after-taxed value on the vesting day. The complication comes when you sold these RSUs and have to report this sale in your tax returns.
Brokers do not report this cost basis in Form 1099-B and instead report a $0! This makes it look like your after-taxed RSU value is a capital gain! And as such will be taxed as capital gains again! This is the RSU double tax phenomenon.
This can be fixed by correctly reporting your ADJUSTED COST BASIS (which is the actual after-taxed RSU value you acquired on vesting day) in your tax returns. Brokers provide this number in a SUPPLEMENT FORM to Form 1099-B.
When filing RSU taxes, Form 8949 is needed. Watch the video for more details on how to make sure Form 8949 is being prepared in the correct manner to avoid RSU double tax. It should have the correct adjusted cost basis.
🔴 Timestamps
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0:00 - Intro
0:52 - 2 Types of taxes in America
1:18 - How RSU works
3:25 - How RSU can get double-taxed
5:03 - What to do to avoid RSU double tax
6:28 - How to make sure you got it right (Form 8949)
🔴 Other
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Instructions to Form 8949: [ Ссылка ]
#RSU #RSUtax #RSUdoubletax
