How to read your W-2 and 1099-B for RSUs
The vesting income already sits in your W-2. The basis column on your 1099-B is the one you have to correct yourself, or the same dollars get taxed twice. Here is every number, where it lives, and a full vest worked start to finish.
RSUs · Forms & reporting
Which form actually reports your RSUs, your W-2 or your 1099-B? Both, and that split is exactly where people overpay. Your W-2 already counts the vesting as income. Your 1099-B reports the sale, and it often understates your cost basis, so the same dollars get taxed twice unless you catch it. This guide is the whole paperwork tour: what each form does, where the double tax hides, the line-by-line fix on Form 8949, a full vest worked from grant value to the number on your return, and the estimated-tax checklist for when withholding falls short. If the words ordinary income and basis are fuzzy, start with how RSUs are taxed. This page is about finding those numbers on the actual paper.
The two forms do two different jobs
Think of it as two separate events with two separate forms. Vesting is an income event, and it lives on your W-2. Selling is a capital gains event, and it lives on your 1099-B. The trap is treating the 1099-B like the whole story, because it quietly forgets that you already paid tax at vesting.
Your W-2: the vesting is already in there
When RSUs vest, the value is added to your wages. It is baked into Box 1, the same as salary, so you are already paying ordinary income tax on it whether you sold the shares or not.
Many employers also break the RSU portion out separately so you can see it, often in Box 14 with a label like RSU or RS. That figure is informational. It is not extra income on top of Box 1, it is a slice of what is already inside Box 1.
Box 14 is a free-text box. Employers label RSU income differently, and some do not break it out at all. If you cannot find it, your pay stub from the vesting date or your equity portal will show the value that was added to wages.
Your 1099-B: where the double tax hides
Your broker sends a 1099-B for any shares you sold. It lists the proceeds, the cost basis, and the gain or loss. The proceeds are usually right. The cost basis is where the problem lives.
Brokers frequently report your basis as zero, or as only what you paid out of pocket, which for RSUs is usually nothing. Your real basis is the vesting-day value, the amount that already hit your W-2 as income. If the 1099-B says your basis is zero, it is treating your entire sale price as gain, which means taxing money you were already taxed on at vesting.
Watch out
A zero or blank basis on your 1099-B is not a sign you owe more. It is usually a sign the form is incomplete and you need to supply the real basis yourself. The fix is an adjustment on Form 8949, covered in the next section, not a phone call to your broker.
Reconcile the two in one pass
Confirm the vesting income on your W-2
Find the RSU value that was added to your wages. Box 14 if it is broken out, otherwise your vesting-date pay stub or equity portal. This is the amount you already paid ordinary tax on.
Check the basis on your 1099-B
For each RSU sale, look at the reported cost basis. If it is zero, blank, or only your out-of-pocket cost, it is almost certainly wrong.
Set basis to the vesting-day value
Your correct basis is the per-share vesting price times the shares sold. That is the number you already reported as income. Use the supplemental statement your broker provides, which usually shows the adjusted basis the 1099-B left off.
Report the corrected number on Form 8949
Enter the broker’s reported basis, then use the adjustment column to bring it up to the real basis. Your taxable gain becomes only the change in price after vesting, which is what it should have been.
Fixing your cost basis on Form 8949, line by line
This is the single highest-value piece of tax paperwork I see RSU holders get wrong, and the fix is mechanical once you know where the numbers go. You correct the basis with a code and an adjustment on Form 8949, the form where you list each sale: what you sold, when you bought and sold it, the proceeds, the basis the broker reported, and then two columns that exist exactly for this situation, an adjustment code and an adjustment amount. The totals flow to Schedule D.
RSU sales usually fall in the category where basis was reported to the IRS but is wrong, which is why you adjust rather than just overwrite.
Find your true basis
Pull the vesting-day fair market value for the lot you sold. That value, times the shares sold, is your real basis. Your broker’s supplemental or year-end statement almost always lists it next to the lot.
Enter the sale as reported
On Form 8949, enter the proceeds and the cost basis exactly as the 1099-B shows them, even if the basis is zero. Match the form first, then correct it.
Apply the adjustment
Enter the basis-correction code in the adjustment column the way the current year’s instructions specify, then put the difference between your true basis and the reported basis in the adjustment-amount column as a negative number, so it reduces the gain.
Check the corrected gain
Your adjusted gain should be only the price change after vesting, not the whole sale price. If the lot was a same-day or near-vest sale, the corrected gain should be close to zero. That is the tell that you did it right.
Watch out
The quick gut check before you file: if your sale price was roughly the same as your vesting value, your real gain is small or near zero. So if your return is showing a giant gain on a sale you made right after vesting, the basis correction did not take. That gap is the double tax, sitting right there on the form. A real case of this, and the amended return that recovered it, is in the double-tax RSU mistake.
Should I just call my broker to reissue the 1099-B?
No, and they generally will not. The broker reported what the rules require, basis without the compensation income baked in. The correction is yours to make on Form 8949, not theirs to reissue. Use the supplemental statement they already gave you and adjust on the return.
What if I already filed and forgot the adjustment?
You can fix it with an amended return and recover the overpaid tax, but you have a limited window to amend and claim a refund, so fix it promptly. If the double tax was large, it is worth doing. Pull the corrected basis, redo the 8949 with the adjustment, and file the amendment.
A worked example: one vest, start to tax
Numbers make the paperwork concrete. Let’s walk a single 100-share vest all the way through, so the moving parts stop being abstract. The figures are an illustration, not your situation, but the structure is exactly what happens on a real vest.
The setup. Say 100 shares vest on a single day, and the stock is worth $80 that day. The grant price, the strike, the original offer letter, none of it matters now. The only number that drives the tax is the value on the vest date.
Show the math, step by step
Step one: the vest creates income. 100 shares times $80 equals $8,000 of ordinary income. That $8,000 lands on your W-2 for the year, lumped in with your wages. You did not sell anything, and the tax is due anyway, because vesting is the taxable event.
Step two: withholding takes a bite, usually not enough. Your employer withholds on that $8,000 like a bonus, at the flat 22% federal supplemental rate 2026 (until cumulative supplemental wages pass $1,000,000 in the year, where it jumps to 37%). 22% of $8,000 is $1,760 of federal withholding, before Social Security, Medicare, and state. If your real federal bracket is 32%, your actual federal tax on the vest is $2,560, so you still owe $800 on this one vest before state. Multiply that gap across a year of vests and you can see how the April bill builds.
Step three: your basis is set, and it is not zero. The moment those shares vest at $80, that $80 becomes your cost basis per share. You already paid ordinary tax on it. If your company used sell-to-cover, some of the 100 shares were sold to pay the withholding and you kept the rest, each carrying an $80 basis.
Step four: the sale, and the trap. Suppose months later you sell your remaining shares at $95. Your gain is $95 minus the $80 basis, which is $15 a share. Only that $15 is a capital gain; the first $80 was already taxed as income. The trap is your 1099-B: brokers often report basis as $0, which would tax the entire $95 as gain, $9,500 of reported gain on 100 shares instead of the real $1,500. You fix it with a basis adjustment on Form 8949 using the vest-day value.
The whole vest in one breath: it made $8,000 of income, withholding covered part of the tax and left a gap, your basis became $80 a share, and the later sale taxed only the $15 of gain, as long as you correct the 1099-B. Four steps, one vest. To size the withholding gap on your own numbers, use the withholding gap calculator, and to see how many shares a sell-to-cover leaves you, the net shares calculator.
Short-term or long-term gain on that $15?
The holding period decides it. Hold more than a year from vesting and the gain is long-term, taxed at the lower long-term rate. Sell within a year and it is short-term, taxed at your ordinary rate. The clock starts at vesting, not at grant.
The estimated-tax checklist after a big vest
When the flat withholding falls short, the gap is not a problem you can settle next April. The IRS expects tax paid as income is earned, and a shortfall left to sit earns an underpayment penalty that accrues over time. Run this list the same week as a big vest.
Size the shortfall on the vest
Take the vested value and multiply it by your real marginal rate, federal plus state, plus the 0.9% Additional Medicare Tax 2026 if a big year pushes your wages past the threshold. Subtract everything already withheld. The result is the cash you still owe on this vest.
Check the safe harbor before you write a check
You do not have to pay your exact tax during the year to dodge the penalty. Pay enough through withholding or estimated payments to land in the safe harbor, a set share of last year’s tax, higher for high earners, and you are shielded even if you still owe a balance at filing. If your total expected withholding already clears it, you may owe nothing extra this quarter.
Pick your tool: bump the W-4 or send an estimate
You can raise your payroll withholding on a future paycheck, or send a quarterly estimated payment. Withholding is treated as paid evenly across the whole year, even if you raise it late, so it can fix a mid-year shortfall that a late estimate cannot smooth.
Pay on the quarterly schedule
Estimated payments are due in four installments across the year. For 2026 the deadlines are April 15, 2026, June 15, 2026, September 15, 2026, and January 15, 2027 2026, with a weekend or holiday shifting the date to the next business day. Pay the shortfall for the quarter your vest landed in, on time, so the penalty clock never starts. Mark the next deadline the day you finish this list.
Watch out
The underpayment penalty is not a flat fee. It accrues on the unpaid amount over time, like interest on a loan you did not mean to take from the IRS. Catching the gap early in the year costs far less than catching it in April. The full mechanics, including the safe harbor, live in how RSUs are taxed.
A single steady vest at a public company may be fully handled by your normal withholding. A large or lumpy event is where people get caught: an IPO settlement, a big refresh grant vesting at once, or several vests stacking in one quarter. The IPO-specific timing is in how RSUs are taxed at an IPO.
What this means for you
Read both forms as one story and the picture is simple: the W-2 already taxed the vesting, and the 1099-B should only tax what the stock did afterward. Most RSU overpayments come from skipping that reconciliation, or from leaving a withholding shortfall to sit until it earns a penalty. Do the one pass, correct the basis on every sale, and pay the gap on the quarterly schedule. Do that and the most common RSU paperwork errors never touch you. If your return is complex or the dollars are large, a quick fit check before you file is cheap insurance.
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