Enter Employee Stock Purchase Plan (ESPP) Sales

If you participate in your employer's Employee Stock Purchase Plan (ESPP), you can enter your stock sales in TurboTax.

Did you buy stocks through your ESPP but didn't sell any during the tax year? Then don't worry about it. Taxation only kicks in when you sell the stock.

ESPP stock sales are entered like any other stock sales.

To get to the correct starting point in TurboTax Online:

1. Select the Tools button in the upper right-hand portion of the screen.
2. Select Topics Search.
3. When the window opens, type "espp" into the box, select the "espp sales" item, and then select Go.
    

To get to the correct starting point in TurboTax desktop or CD/download version:

1. Enter your cursor into the search box in the upper right-hand portion of the screen.
2. Type "espp" into the box, select the "espp sales" item, and then select Go.

Follow the on-screen instruction to complete the entry of the information.

 

Tip: If you haven't already done so, we recommend upgrading to TurboTax Premier or Home & Business if you're the least bit concerned about entering your ESPP sales information correctly.

 

Typically, when you sell shares of employer stock, you're taxed at the generally lower capital gains rate instead of the often higher ordinary income rate. However, you need to be aware of the possibility that the gain or loss on the sale of your employer shares could be treated as ordinary income if:

• You bought the stock shares at a discount from the market price, or
• You owned the stock for one year or less, or
• You began buying the stock less than two years before you said you sold it.

If your shares are treated as ordinary income, look on your Form W-2. It should list an amount titled "ESPP Disqualifying Disposition" or "ESPP Qualifying Disposition" or something similar.

Add this amount on your Form W-2 to the cost of the shares to figure the total cost basis to enter for this sale.

If you don't see an ESPP-related entry on your Form W-2, contact your ESPP administrator, who will give you the information you need.