Tax Resource for Stock Compensation Updated

The Tax Center addresses filing and reporting of tax returns that involve stock options, restricted stock, restricted stock units, performance shares, stock appreciation rights and employee stock purchase plans (ESPPs). Core articles and FAQs spell out the most common mistakes people make with stock grants on their tax returns.   

Taxpayers, their financial advisers, and their accountants can use these to be sure they submit error-free returns. Annotated diagrams of IRS forms show exactly how to report sales of company stock. Fun, engaging podcasts and a video convey tips for tax returns, including errors to avoid.   

The information in the myStockOptions.com Tax Center reflects changes to Form 1099-B, Form 8949 and Schedule D, which taxpayers who sold shares during the tax year must submit with the Form 1040 tax return. Form 8949, which has also been revised since last year, is where taxpayers list the details of each stock sale, using the information on Form 1099-B, while Schedule D simply aggregates the column totals from this form to report total long-term and short-term capital gains and losses.  

On myStockOptions.com, a pair of articles explains Internal Revenue Service (IRS) Form 3922 for employee stock purchase plans and IRS Form 3921 for incentive stock options. With annotated examples of the forms that translate IRS jargon into understandable language, these articles, along with detailed FAQs, clarify what taxpayers need to understand about the information provided by the forms. While the forms are not needed for tax-return reporting, they give the IRS new tools for catching expensive errors on the tax returns of people who sold shares.