How to avoid paying double tax on employee stock options
Anyone who participates in an employee stock option or stock purchase plan at work could overpay their taxes — perhaps by a lot — if they don’t understand a reporting requirement that took effect in 2014.
Under the requirement, all brokers must report cost basis on Form 1099-B for stock that was both acquired and sold on or after Jan. 1, 2014, through an employee stock option or purchase plan in a way that could result in double taxation, unless the employee makes an adjustment on Form 8949. The new requirement does not apply to restricted stock awarded to employees.