We know that taxes can be really confusing. While we can’t give partners financial or tax advice (everyone’s personal situation is different), here’s a quick rundown of generally what to expect when your Bean Stock RSUs vest and if you choose to sell Starbucks shares that you received from Bean Stock.

1.  When your Bean Stock RSUs vest, you get shares of Starbucks stock.

This is considered a taxable event. Starbucks will withhold any applicable taxes (Federal, Social Security, Medicare and any state or local taxes) in the form of shares. After taxes, the net shares (shares less taxes) are deposited to your Fidelity account.

EXAMPLE (for illustrative purposes only)
Let’s say you received 10 RSUs, and one year later when the first 50% (5 units) vest, the closing price of Starbucks stock is $60 and your tax rate is 35%*.

Your taxable income: 5 shares x $60 = $300
Your taxes due: $300 (your taxable income) x 35% (your tax rate) = $105

2 shares** will be withheld to cover the taxes due and the remaining 3 shares go into your Fidelity account.

* The example shows estimated tax withholding. For your own personal situation, we encourage all partners to consult with their own tax adviser with respect to local tax consequences in regards to taxation of RSUs at the time of vest.
** Shares will be rounded up to the nearest whole share, and any residual from the netting of shares will be refunded to you through payroll.

2.  The value you receive from your Bean Stock when it vests will be reported on your W-2 as part of your earnings. Starbucks mails a W-2 to each partner’s home address by January 31 for the previous year’s wages and taxes.

EXAMPLE (for illustrative purposes only)
Following the example above:

  • The value of the total shares ($300), is included in boxes 1, 3 (up to maximum wage base) and 5
  • The taxes withheld ($105), is included in boxes 2, 4 (up to maximum wage base) and 6
  • If state or local taxes applied, the value of the total shares is included in boxes 16 and 18 and taxes withheld in boxes 17 and 19

Starbucks also reports “RSU Gain” ($300) in box 14

3.  If you do not sell the shares you received from Bean Stock, the income and taxes have already been included on your W-2, so aside from entering your W-2 information on your tax return, you do not need to report any income or taxes separately. However, if you’ve received dividends on the shares you’ve held, please be sure to read the section below on dividends.

OR

3.  If you sell the shares you received from Bean Stock, you’ll have another taxable event, but it will be handled differently than the taxable event at vest because you own the shares outright. Starbucks has no visibility to this activity.

Whether you hold the shares for a day or years after the vest, you will have a taxable event when you sell those shares. Depending on the value of your shares at sale, you may have a gain or a loss to report on your annual tax return.

EXAMPLE (for illustrative purposes only)
GAIN: Let’s say that you decide to sell your 3 shares and the stock price is $65. After the sale, Fidelity will deposit the cash proceeds to your account. 3 shares x $65 (sale price) = $195 less commission/fees

You’ve already paid taxes on these 3 shares at $60 per share when they vested, so to determine your taxable income at sale, take the sale price minus the original price of your shares (this is usually called cost basis).

$65 (sale price) – $60 (cost basis) = $5 x 3 shares sold = $15 gain to report

LOSS: Let’s say that you decide to sell your 3 shares and the stock price is $55. After the sale, Fidelity will deposit the cash proceeds to your account. 3 shares x $55 (sale price) = $165 less commission/fees

You’ve already paid taxes on these 3 shares at $60 per share, so to determine your taxable income at sale, take the sale price minus the original price of your shares (this is usually called cost basis).

$55 (sale price) – $60 (cost basis) = -$5 x 3 shares sold = $15 loss to report

When you sell shares, you will need to report this information on your annual tax return. Your broker (like Fidelity, who sells shares on your behalf) will mail your 1099-B Tax-Reporting Statement and a Supplemental Information Form by mid-February. Forms can also be found in your Fidelity account under Tax Forms. Fidelity publishes a step-by-step guide, to help walk you through the tax filing process.

4.  If you’ve received dividends on your Starbucks shares, this is taxable income.

  • If you received $10 or more in dividends, Form 1099-DIV, which shows your dividend income to be reported on your annual tax return, will be mailed by your broker by mid-February.
  • For a history of Starbucks dividends, see Dividend & Stock Split History.