Are your RSUs taxed twice?

If your brokerage reported a $0 cost basis on vested shares, you may have paid tax on the same income twice. It is one of the most common and most expensive mistakes for people with equity comp.

How RSUs are supposed to be taxed

When restricted stock units (RSUs) vest, the value of those shares on the vest date is added to your W-2 as ordinary wage income, and tax is withheld. That vest-date value becomes your cost basis. When you later sell the shares, you only owe capital gains tax on the difference between the sale price and that basis.

Where the double tax sneaks in

Brokers are only required to report what you actually paid for shares. For RSUs, you paid nothing, so the 1099-B often shows a cost basis of $0. If that $0 flows onto your return unchanged, the entire sale value looks like a capital gain, even though most of it was already taxed as wages on your W-2.

The result: the same income is taxed twice. Once as wages, again as a phantom capital gain. On a large vest, that can quietly cost five figures.

How to check your own return

Look at Form 8949 and the 1099-B for the year you sold vested shares. If the reported basis is $0 or looks far too low, compare it to the vest-date value that was added to your W-2. The correct basis is the amount already taxed as wages. The fix is to adjust the basis on Form 8949, and you can generally amend within three years to recover overpaid tax.

This is exactly what Deduckt looks for

Deduckt reconstructs your return and flags the double-tax pattern automatically, then shows the math and whether it is still fixable. You do not need to understand any of this yourself.

This article is educational information, not tax advice. Figures are estimates. Review your situation with a qualified tax professional before acting. Sources: Summitry, John McCarthy CPA, IRS Form 8949 instructions.