Tax Center / Global Tax Guide / Glossary / Discussion / Newsletters / About Us
Register Log in
myRecordsmyToolsmyClients
   ESPPs   
Basics   
Rules   
Advanced   
Taxes   
Taxes Advanced   

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 KnowledgeTest and improve your knowledge with our ESPP quiz and its study guide in the answer key.


Want to know more? Got a few minutes? Listen to our podcast on the basics of ESPPs!

  Articles   FAQs  

How To Report Sales Of Company Stock On Your Tax Return

The myStockOptions.com Tax Team
Learn how to report sales of stock on your tax return. Annotated diagrams of Form 8949 and Schedule D help you make sense of the reporting rules.

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.

Six ESPP Essentials (Part 1): Enrollment, Plan Type, Purchase Timing This is premium content

Matt Simon
An employee stock purchase plan can be a great benefit, but the rules and taxation are tricky. This two-part article presents six topics you must be familiar with to get the most from your ESPP. Part 1 covers enrollment, plan types, and offering/purchase periods.

Avoid Tax-Return Mistakes With Stock Options & ESPPs: What You Need To Know

Bruce Brumberg and Lynnette Khalfani
The 2014 tax-return season has the potential to be more confusing than most if you sold stock in 2013. Read this article for tips on reporting stock sales and on other crucial tax-return topics.

Key Dates And Terms You Must Know For Your Company's ESPP This is premium content

Matt Simon
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.

Six ESPP Essentials (Part 2): Holding Periods, Tax Treatment, Major Corporate Or Personal Events This is premium content

Matt Simon
Your company's employee stock purchase plan (ESPP) can be a strong financial benefit, but the rules and taxation can be tricky. Part 2 delves into the complicated topics of holding periods, tax treatment, and the impact of various life events on your ESPP participation and holdings.

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

Bruce Brumberg
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.

ESPP Taxation Made Simple This is premium content

Matt Simon
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.

Tax Planning For Options, Restricted Stock, And ESPPs After 2013 Tax Law Changes: High-Income Taxpayers Impacted Most (Part 1)

Tom Davison and William Whitaker
NEW! The beginning of 2013 brought notable shifts in tax rates for people at higher income levels. Part 1 surveys the important tax changes and considers their impact on planning.

Fundamentals Of Employee Stock Purchase Plans (Part 2): Design Limitations And Enrollment Procedures This is premium content

Alisa Baker
Part 1 looked at the basic structural elements and terms of employee stock purchase plans (ESPPs). Part 2 considers more advanced design concepts, including tax code limits and enrollment rules.

Return to top of page

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...

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...

Will I receive information statements from my company about ESPP purchases or option exercises? Will I receive Form 3922 or Form 3921? This is premium content

Companies make some information available voluntarily, while the reporting of other information is mandatory. Section 6039(a) of the Internal Revenue Code requires companies to send an information statement to employees who have exercised incentive stock options or have made purchases in a tax-qualified Section 423 employee stock purchase plan. ISO exercises are reported on IRS Form 3921. ESPP purchases are reported on IRS Form 3922...

What do I need to know about the information on IRS Form 3922 for ESPPs? This is premium content

Your company is required to file Form 3922 with the IRS and either give you a copy or present the same information on a substitute document. The form contains information about your purchases in your company's tax-qualified ESPP during the prior tax year. With this reporting, the IRS now knows more information about your ESPP purchases than it did before, particularly with regard to your...

W-2 diagram! If I sell ESPP shares after the required holding periods, what will appear on my W-2? This is premium content

If you sell ESPP shares in a qualifying disposition, you still...

W-2 diagram! If I make a disqualifying disposition with my ESPP stock, what will appear on my W-2? This is premium content

With a tax-qualified ESPP, nothing appears on your W-2 until you sell the shares. In that year, income is reported in the following boxes of your W-2...

W-2 diagram! My company's employee stock purchase plan is not tax-qualified under Section 423 of the Internal Revenue Code. What will my W-2 show after an ESPP purchase? This is premium content

The gain from your ESPP purchase is totaled on the W-2 with other income in the following boxes...

Form 8949 and Sch. D diagrams! If I sell ESPP shares after the required holding periods, how do I report the sale on my Form 8949 and Schedule D? This is premium content

The sale of your ESPP shares is likely to trigger both ordinary income and capital gain income, as explained...

Form 8949 and Sch. D diagrams! If I make a disqualifying disposition with my ESPP stock, how do I report the sale on Form 8949 and Schedule D of my tax return? This is premium content

You report the sale on Form 8949 and Schedule D to show your capital gain or loss, regardless of any actual gain or loss. This is the difference between...

Form 8949 and Sch. D diagrams! My company's ESPP is not tax-qualified under Section 423 of the Internal Revenue Code. How do I report any gain that results from the sale of my ESPP shares on my federal income-tax return? This is premium content

Form 8949 is where you list the details of each stock sale, while Schedule D aggregates the column totals from this form to report your total long-term and short-term capital gains and losses. However...

Return to top of page