I have been receiving RSU grants from my employer every year, and was exercising them and selling them soon after. E-Trade(employer provided brokerage account) tells me they withheld taxes at the time of granting. They did so by "shares traded for taxes" which means I received only a fraction of the shares after some were withheld.
Come the end of the year, E-Trade gives me a 1099-B form that treats the entire value from the sale of my shares as capital gain/loss. I foolishly believed whatever TurboTax said and paid taxes on that capital gain. Did I pay unnecessary taxes?
Estimated Tax Withholding Tax Description Taxable Gain Effective Tax Rate Withholding Amount US-FIT $4,460.40 25.00% $1,115.10 NC-SIT $4,460.40 5.75% $256.47 US-FICA $4,460.40 6.20% $276.54 US-FMED $4,460.40 1.45% $64.68 US-FIT $2,823.74 25.00% $705.94 NC-SIT $2,823.74 5.85% $165.19 US-FICA $2,823.74 6.20% $175.07 Total Estimated Tax Withholding $2,758.99 >> Shares Traded For Taxes: 45 << Tax Status: Paid at Vest
Out of 118 shares I was granted, 45 were withheld for taxes. I paid taxes on the sale of remaining 73 shares.
Anybody knows how this works?