If you need to prepare a return for , , or you can purchase and download desktop software to do it, then print, sign, and mail the return s. Remember to prepare your state return as well—if you live in a state that has a state income tax. If you need to prepare a return for and you can purchase and download desktop software to prepare it, then print, sign, and mail the return s. Check the IRS website for additional information regarding the filing requirements.
Why sign in to the Community? Submit a question Check your notifications Sign in to the Community or Sign in to TurboTax and start working on your taxes. Community : Discussions : Taxes : Get your taxes done : tax filing for free. The reported compensation is taxed as ordinary income. You do not report anything on your Schedule D Capital Gains and Losses because you have not yet sold the stock.
Your employer will not include any compensation related to your options on your Form W-2 either. The bargain element is the difference between the exercise price and the market price on the day you exercised the options and purchased the stock. This amount should already be included in the total wages reported in Box 1 of your Form W-2 because this is a "disqualifying sale.
Report the sale on your Schedule D, Part I as a short-term sale. The sale is short-term because not more than one year passed between the date you acquired the actual stock and the date you sold it.
Because you exercised the options and sold the stock in the same year, you do not need to make an adjustment for Alternative Minimum Tax purposes. Unlike example 2, the compensation is calculated as either the bargain element or the actual gain from the sale of the stock - whichever is lower. This is because the market price on the day of the sale is less than that on the day you exercised your option.
Report the sale on your Schedule D, Part I, as a short-term sale. It's considered short-term because less than one year passed between the date you acquired the stock and the date you sold it. Because this sale did not occur in the same year as the year you exercised the options, you have to make an adjustment for AMT. When you originally purchased the stock, you should have reported an income adjustment for AMT purposes in that year.
The bargain element is calculated as the difference between the exercise price and the market price on the day you exercised the options and purchased the stock. This amount should be included in the total wages shown in Box 1 of the Form W-2 from your employer because this is a disqualifying sale meaning that your gain does not qualify for capital gains treatment for which the rates are lower than for ordinary income in If this amount is not included in Box 1 of Form W-2, you still must add it to the amount of compensation income that you report on your Form , line 7.
It is long term because more than one year passed between the date you acquired the stock and the date you sold it. Because this is a qualifying sale, the Form W-2 you receive from your employer will not report any compensation amount for this sale. It is long-term because more than one year passed between the date you acquired the stock and the date you sold it.
Because this sale and the exercise of the options didn't occur in the same year, you must make an adjustment for AMT. If you buy and hold, you will report the bargain element as income for Alternative Minimum Tax purposes.
But what is the adjustment you should report? The year-of-sale Form adjustment is added to the stock's cost basis for Alternative Minimum Tax purposes but not for regular tax purposes.
In the year that you exercise an Incentive Stock Option, the difference between the market value of the stock on the exercise date and the exercise price counts as income under the AMT rules, which can trigger an AMT liability. However, you will also generally earn an AMT credit in that year.
You can use the credit to lower your tax bill in later years. However, there are limitations on when you can use an AMT credit. In some cases, AMT credits cannot be used for several years. Fortunately, a taxpayer-friendly change in allows individuals with unused AMT credits that are over three years old so-called long-term unused AMT credits to cash them in. It's important to take a look at the whole picture of your capital gains and losses for AMT purposes when you sell stock that you purchased by exercising Incentive Stock Options.
If the market turns on you after you have exercised your options and the current value of your stock is now less than what you paid, you could still be subject to the Alternative Minimum Tax. One way around that is to sell the stock in the same year that you bought it, creating a "disqualifying" disposition. That way you will not be subject to the AMT, but you would be subject to regular tax on the difference between your option exercise price and the sales price.
TurboTax Premier Edition provides extra help with investments, so you can track and calculate your gains and losses—and TurboTax calculations are guaranteed accurate. Your employer is not required to withhold income tax when you exercise an Incentive Stock Option since there is no tax due under the regular tax system until you sell the stock. Although no tax is withheld when you exercise an ISO, tax may be due later when you sell the stock, as illustrated by the examples in this article.
Be sure to plan for the tax consequences when you consider the consequences of selling the stock. Mail Federal and State in separate envelopes and mail each year in separate envelopes. If you are getting a refund, there is not a penalty for filing past the deadline.
You have 3 years to file for a refund. This is an old thread that transferred into this new forum. The download version for TurboTax can still be purchased directly from TurboTax at this page:. That is a terrible answer. There is no option at that link for a return.
Would someone who actually knows how to find the software on this f'ed up site please provide a link that works?
Why sign in to the Community? Submit a question Check your notifications Sign in to the Community or Sign in to TurboTax and start working on your taxes. Community : Discussions : Taxes : Get your taxes done : Is there still a download version of turbotax Enter a search word. Turn off suggestions. Enter a user name or rank. Turn on suggestions.
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