I am currently living and working in NYC, and when I joined my job, I was awarded couple hundreds of stocks which will vest in periodic intervals over the next couple of years. On my 2020 W2, on box 14, I have line for RSU with value 85K which corresponds with the value of vested stock units in 2020. However, these value of stock units seemed to have been considered as income on my W2. But those stock units are in my brokerage account- I haven't sold them so I actually don't have money for them. What's more, when I go to do my taxes, it says I owe $6K in Federal taxes. However, every time the stock vested, my company took some amount of stock units and sold them off for tax(at a whopping 22% tax), so I have already paid tax on vested units. So for example:
Box 1(Wages, tips, other income): $222,647 Regular Income: $137,000 RSU: $85,000 Taxes Paid: $47,000
So it seems vesting stock units pushed my income level to another tax level(even though I actually don't have liquid money for the stocks) and the tax that I have already paid for my regular weekly wages + stock vesting isn't enough to cover the tax liability at that level. Is this a normal scenario? Shouldn't the taxes being taken out when the stock vests be enough cover the liability? If the stock tanks, wouldn't I be paying taxes for money I don't have ?