Article
Do you pay taxes twice on RSUs?
Only if you don't fix the cost basis. Brokers report $0 by default on RSU sales, which quietly double-taxes income you already paid tax on at vest. The trap and the fix.
No, but only if you correct the cost basis on your return. Left as reported, the IRS will effectively tax the same dollars twice.
What actually happens
When RSUs vest, the market value on that day is added to your W-2 as ordinary wages. Federal and state tax get withheld. That number (the vest-day fair market value) is your true cost basis for the shares going forward.
Later, when you sell the shares, your broker sends you and the IRS a 1099-B. Because the broker only knows what you paid for the shares ($0 for a grant), they typically report cost basis as $0 or leave it blank. If you enter that number straight through, your capital gain is calculated on the entire sale price, even the portion that was already taxed as wages.
The double-tax, illustrated
Say 100 shares vested at $80, adding $8,000 to your W-2. You paid tax on that $8,000. Later you sell all 100 shares at $90, for $9,000 proceeds.
Your actual capital gain is $1,000 (the appreciation from $80 to $90). But if your 1099-B shows cost basis of $0, TurboTax happily reports a $9,000 gain, and you pay ordinary income tax on the $8,000 all over again.
The one-line fix
On Form 8949, use the adjustment column. Enter the reported basis from the 1099-B, then add the missing amount as an adjustment (code B) to bring cost basis up to the vest-day value.
Every tax software supports this. In TurboTax and H&R Block, the RSU-specific import flow will ask you for the vest-day price if you tell it the sale came from RSUs. Enter it. Do not skip.
Where to find your vest-day value
Look up "Supplemental Information" or "Stock Plan Summary" on your broker (Schwab, Fidelity, E*TRADE, Morgan Stanley all provide it). Charles Schwab issues a "Stock Plan Transactions Supplement" specifically for this. That's your real basis.