How to fix the RSU cost-basis double-tax on Form 8949

This is the single biggest tax-prep mistake in the equity-comp world. Every tax season, tech workers overpay tens of thousands of dollars because they did not adjust the RSU cost basis on Form 8949. The IRS does not refund this overpayment automatically. You have to know to fix it.

Why brokers report $0 basis

When your RSUs vest, the shares are delivered to your brokerage account. Your broker (Schwab, E*Trade, Fidelity, Morgan Stanley, etc.) records that delivery.

From the broker's perspective, you paid $0 to acquire the shares — they were granted to you.

• Box 1d (proceeds): your sale price × shares.
• Box 1e (cost basis): $0 (or sometimes the dividend reinvestment amount, but functionally $0).
• The broker has no idea about your W-2 — and IRS reporting rules under §6045 do not require them to.

If you leave this unfixed, your tax software calculates capital gain = sale price − $0 = the full sale price.

You then pay capital-gain tax on the same dollars that were already taxed as W-2 income at vest. That is double taxation.

The Form 8949 column (g) fix

Form 8949 is where Schedule D capital gain entries are reconciled. The form has 7 columns for each sale. Here is what to enter:

Worked example

100 RSUs vested on April 15, 2024 at FMV $50/share = $5,000 ordinary W-2 income (reported in W-2 Box 1).

You sold all 100 on September 1, 2025 at $80/share = $8,000 sale proceeds. Form 1099-B reports cost basis = $0.

The reason the fix is worth so much: without it you pay tax on the full $8,000 sale as if every dollar were profit, when in reality $5,000 of it was already taxed as wages on your vest-day paycheck.

The column-(g) adjustment simply tells the IRS "this $5,000 was already taxed once" — so you are only taxed on the true $3,000 of growth.

Same sale, same shares, less than a minute of work, $2,574 back in your pocket.

TurboTax walkthrough

1. 1Go to Income → Investments → Stocks, Mutual Funds, Bonds. Import 1099-B from your broker if you have not already.
2. 2For each RSU sale row, click Edit or the small pencil icon.
3. 3Scroll to "I'll enter additional info on my own" → "This is a less common situation".
4. 4Check "The cost basis on my 1099-B is incorrect or missing".
5. 5Enter the correct basis in the "Corrected cost basis" field. This is FMV at vest × shares. Pull from your Equity Comp Decision Tracker §3 Vest log row (or your final paystub the year of vest).
6. 6TurboTax automatically generates Form 8949 with code B and the negative adjustment in column (g). You do not enter column (g) directly.

FreeTaxUSA walkthrough

1. 1In the Income section, go to Investments → Stocks and Mutual Funds.
2. 2Enter the 1099-B import or add manually.
3. 3On the lot detail page, check "Reported cost basis is incorrect".
4. 4Enter the corrected basis (same as TurboTax: FMV at vest × shares).
5. 5FreeTaxUSA writes the proper adjustment to your generated Form 8949.

What if I have ESPP, ISO, or NSO instead of RSU?

The cost-basis double-tax pattern applies to ALL employer stock that flows through W-2 income:

In every case, you may need to adjust column (g) on Form 8949 to reflect the correct basis. The Mathstub Equity Comp Decision Tracker §B includes a full walkthrough for each case.

I have been doing it wrong. Can I amend prior years?

Yes. File Form 1040-X within 3 years of the original return's due date (so for tax year 2022, you have until April 15, 2026).

The IRS will refund the overpaid tax + 6% interest. Common refund amounts for tech workers who file amendments: $5,000–$25,000+ across 3 amended years.

Bottom line

This is the most-googled equity-comp tax issue for a reason. Every tech worker with vested RSU sales should verify their 1099-B basis against their W-2 supporting docs.

Adjusting Form 8949 column (g) takes 60 seconds per sale and saves the difference between (sale price × marginal rate) and ((sale price − FMV at vest) × LTCG rate).

For high earners that gap is typically 20+ percentage points of the sale proceeds.