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Annotated diagram of Schedule DTax errors can be costly! Don't draw unwanted attention from the IRS. Our Tax Center explains and illustrates the tax rules for sales of company stock, W-2s, withholding, estimated taxes, AMT, and more.


ESPPs

Employee stock purchase plans offer great benefits. Browse an overview of this section below, or explore the subtopics to the left. See also the ESPP sections of the Tax Center.

Test Your Knowledge Test and improve your knowledge with our ESPPs quiz and its study guide in the answer key.

Listen to our podcast on the basics, or watch our videos on the core concepts and benefits, important rules, and tax issues for ESPPs.


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ESPPs 101: Taxation Made Simple This is premium content

The myStockOptions Editorial Team
Your employee stock purchase plan may be one of the best benefits offered by your company. However, to appreciate the advantages of enrolling in the ESPP you must understand the tax consequences of participation. This article explains the tax basics.

IRS Form 3922 For ESPPs: What You Need To Know, And How It Can Help You Understand ESPP Taxation This is premium content

Bruce Brumberg
Stock purchases made through an ESPP during a calendar year are reported to you and the IRS on Form 3922 early in the following year. This article explains what you need to know about the information on the form, and how the form can help you better understand the complexities of ESPP taxation.

ESPPs 101: Key Dates And Terms You Must Know

The myStockOptions Editorial Team
Your employee stock purchase plan (ESPP) may be one of the best benefits your company offers. However, to maximize its value, you must know its key dates and terms. This article explains the basics you need to know for your ESPP participation.

VIDEO! Employee Stock Purchase Plans (ESPPs): Core Concepts & Benefits

Bruce Brumberg
In this video, the editor-in-chief of myStockOptions.com explains the fundamentals of employee stock purchase plans (ESPPs). Animated examples clearly illustrate the benefits that ESPPs can provide for employees. Running time: 3:35

12 Tax-Return Mistakes To Avoid With Stock Options And ESPPs

Bruce Brumberg and Lynnette Khalfani
UPDATES! The 2016 tax season has the potential to be confusing if you sold stock in 2015. This article explains common errors to avoid when reporting stock sales on your tax return and provides helpful guidance on various other tax topics involving stock options and ESPPs.

VIDEO! Employee Stock Purchase Plans (ESPPs): Taxes

Bruce Brumberg
To maximize the benefits of your employee stock purchase plan (ESPP), you must understand the five key tax rules explained in this video. Illustrated by animated examples, the covered concepts include the special rules that depend on how long you hold the shares. Running time: 4:24

NEW! Ten Financial-Planning Rules Every ESPP Participant Should Know This is premium content

myStockOptions.com Editorial Team
Employee stock purchase plans (ESPPs) are a super deal. However, the related taxation and financial planning can be deceptively complex. This article presents the essential points that you should understand before you participate in your company's ESPP.

VIDEO! Employee Stock Purchase Plans (ESPPs): Key Rules & Decisions

Bruce Brumberg
Presented by the editor-in-chief of myStockOptions.com, this video covers the important rules you must know and the key choices you will have to make when you participate in an employee stock purchase plan (ESPP). Running time: 2:53

How To Avoid Paying Too Much Tax: Understanding The Revised Form 1099-B And Form 8949 For Reporting Stock Sales On Your Tax Return This is premium content

Bruce Brumberg
UPDATES! The stock-sale information provided by brokers on IRS Form 1099-B has changed. Cost-basis reporting, both for your broker on Form 1099-B and for you on your tax return, is now more complex, confusing, and vulnerable to errors. This article explains the crucial facts you must know to avoid overpaying tax or attracting unwanted IRS attention.

VIDEO! Tax-Return Reporting Of Company Stock Sales: How To Avoid Overpaying Taxes

myStockOptions Tax Team
Learn the rules for reporting stock sales on your tax return, along with costly errors to avoid if the shares you sold came from stock options, restricted stock/RSUs, stock appreciation rights, or an employee stock purchase plan. Among other issues, you must understand your "cost basis" to avoid overpaying your taxes. Running time: 8:06.

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What is an employee stock purchase plan?

An employee stock purchase plan (ESPP) is a type of stock plan that permits employees to use after-tax payroll deductions to acquire shares of their company's stock. Plans can have...

What are the top 10 questions I should ask about my company's employee stock purchase plan?

Employee stock purchase plans (ESPPs) can be designed in different ways and provided with various features that make them appealing to participants. Before you enroll in your company's ESPP, however, you should be sure to know the answers to the following questions...

NEW! What are the 10 most important financial-planning rules for employee stock purchase plans?

Before you participate in your company's employee stock purchase plan (ESPP), understand the following essential points for financial planning with ESPPs...

When I sell my ESPP shares, how will I be taxed if I have met the holding-period requirements under Section 423 for tax-qualified ESPPs? This is premium content

You may have both ordinary income and capital gain when you meet the holding-period requirements (this is a qualifying disposition under the tax code). The answer depends on whether...

If I do not meet the ESPP holding-period requirements to receive favorable tax treatment, how will I be taxed when I sell the stock? This is premium content

If you sell or otherwise dispose of the stock without meeting the holding period rules, then you owe taxes for the spread between the...

What are the biggest mistakes related to my employee stock purchase plan that I can make on my tax return, and how can I avoid them? This is premium content

It is all too easy to make costly tax-return errors that attract unwanted IRS attention. Learn how to prevent mistakes...

If I purchase shares in my company's ESPP or sell the stock in a disqualifying disposition, will I need to make estimated tax payments? This is premium content

You need to pay enough tax during the year through withholding or estimated tax payments to avoid penalties and interest. The tax that has to be paid includes...

How does an ESPP differ from a stock option plan?

Employee stock purchase plans tend to be viewed as a benefit while stock options are a form of compensation. From an employee perspective, there are some differences in operations, eligibility, and design...

Can I ever have ordinary income but no actual gain on sales of ESPP stock? This is premium content

Yes, when the market price of the stock has dropped after purchase and you make a disqualifying disposition of the shares...

What are the benefits of participating in an employee stock purchase plan?

You become an owner in your company, with all the financial upside and risks that any investment can bring. By participating in the plan...

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