When to refuse an RSU grant?
My employer granted me 120 shares in restricted stock units. Sounds good, right? A quarter of them vested (30 shares), and hey appeared in my E-Trade account. They did not sell any of them to take out federal, state, and social security tax. That is my problem. I had no idea that I was supposed to take care of that. Some more vested since then and the same thing happened.
I sold 50 shares last November, and got a check for just over $400. E-Trade robbed me because they organized the sale in such a way to maximize commission. When I did my 2018 taxes I had a mess to deal with. I had to pay the federal and state tax, and just pain did not bother with the social security. The amount of work exceeded the bother for the paltry sum of $400. If it was just a simple form, I would have been OK with it.I contacted HR a few weeks back and asked the company to take the remaining shares back. They agreed to take back the shares that had not yet vested, but refuse to take back the shares in my E-Trade account. I am liable for the taxes on them, but there are only 16 shares so the value is small. I have not paid any taxes on that 12 shares yet. I figure that my payout will be maybe $100 if I sold them.How do I rid myself of this with the least paperwork? What is the dollar figure where RSU become viable? Seriously I think if the amount (after taxes, and omissions) is less than $500 over a year, it is not worth it. Can I donate them to the YMCA or something?
- MarvinLv 712 months ago
I do not follow your story completely. When you said "I did not bother with social security" I got confused. I assume that was some kind of typo.
In my non-expert opinion, your employer did a bad (minimalist) implementation. My employer did the same. They gave me something like 200 RSU back in 2014. I sold some and had the same problem. In 2015 sometime I asked them to take back the remainder, and they did, except for the six (or so) shares that had vested and remained in my account. I asked why not take them all, and they said they had no procedure for taking back vested shares (legality maybe).
So what did I do with the six (or so) shares that I owned taxes on? The amount was paltry, so I went to my broker account, and did a change of address, phone, and email to fake info. I changed the password and user name to something like Gsfagaa24123.
That was four years ago, and I have heard nothing more about it. I they were worth about $12 when they vested. So that comes to around $84. That being the case, I might owe the IRS about $10. I do not think they will ever come looking for me over that.
When to refuse an RSU grant? Hmm, maybe when the amount is less than about $2000 at the time they are granted. I am just guessing.
Can you donate them? Sure, but I have no idea how.
- StephenWeinsteinLv 712 months ago
If you donate shares to a 501(c)(3) charity (which includes the YMCA), then you don't pay capital gains tax on any increase in their value that happened after they became yours. However, you still pay the regular taxes (including social security, if necessary) on what they were worth when the company gave them to you. If you wish, you can deduct the value of what you give to charity as an itemized deduction on Schedule A, but that requires more paperwork (and isn't worth it for a small amount, and isn't going to help you at all if your total deductions for the year are under abpit $6000).