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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.

Financial Planning

Financial Planning explores various approaches to making the most of stock grant gains while minimizing taxes. The coverage includes the role of stock grants in gifts, estates and trusts, dividends, hedging, and more.

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

Want to learn more about financial planning for equity compensation? Visit our podcasts page for interviews with some of our expert contributing authors.

Advisors, Have You Heard About MSO Pro?
Made just for you, with tools to track and model grants for multiple clients, and proactive communications to build relationships. Click here for more information.

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Ten Financial-Planning Rules Everyone With Stock Options Needs To Know

Michael Beriss
Managing your stock options is one of the most complex financial challenges you will face. These 10 rules will help you get the most out of them.

Restricted Stock & Stock Options: Financial Planning After Your Tax Return Is Filed (Part 1) This is premium content

Tom Davison and Liam Hurley
The time right after you have completed your tax return is ideal for big-picture financial planning. You can more accurately project your income and likely tax situation for this year and the next to develop your strategy. This article series discusses factors to consider in your income and tax projection, along with planning ideas.

NEW! Ten Financial-Planning Rules You Should Know About Restricted Stock And RSUs This is premium content Editorial Team
While grants of restricted stock and RSUs are conceptually simple, financial planning for them can be complex. This article presents the essential financial-planning points that you should consider before your restricted stock or RSU grant vests.

American Taxpayer Relief Act And Medicare Surtax: Impact On Stock Option And Restricted Stock Strategies This is premium content

Alan B. Ungar
Podcast included! The American Taxpayer Relief Act and the Affordable Care Act introduced tax-rate increases you must consider in deciding when to exercise stock options, when to sell company shares, and how to plan around income from restricted stock/RSU vesting.

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

A Least-Regret Analysis For Equity Compensation: Maximizing Value While Minimizing Risk This is premium content

William Baldwin
Podcast included! For some employees, the value of their equity compensation plans represents their largest investment. With so much at stake, making the right decisions is critical. Intelligent planning can maximize value while minimizing risk.

Tax Planning For Options, Restricted Stock, And ESPPs After Recent Tax Law Changes: High-Income Taxpayers Impacted Most (Part 1) This is premium content

Tom Davison and William Whitaker
Notable shifts in tax rates have occurred for people with high incomes. Part 1 surveys these important tax changes and considers their impact on planning.

The Equity Compensation Planning Dilemma For Corporate Executives This is premium content

Geoffrey M. Zimmerman, CFP®
Podcast included! Executives, as corporate insiders, must perform a delicate balancing act to meet the needs, demands, and perceptions of the various constituencies interested in their company's stock. This article looks at these concerns and explores ways to manage them that can improve the chances of achieving financial goals.

Tax Planning For Options, Restricted Stock, And ESPPs After Recent Tax Law Changes: High-Income Taxpayers Impacted Most (Part 2) This is premium content

Tom Davison and William Whitaker
Notable shifts in tax rates have occurred for people with high incomes. Part 2 looks at planning strategies involving capital gains rates, the AMT, and ISOs, and considers general ideas related to income-shifting.

How To Avoid Mistakes And Create Wealth With Your Stock Options This is premium content

Paul Palazzo, CFP®
Podcast included! Stock options can be very lucrative if handled properly, but there are situations in which people can easily make mistakes. In this article I discuss the most common mistakes I see.

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2016 UPDATES! Are there guidelines for calculating AMT trigger points? For example, if my spouse and I earn $200,000 per year, will we trigger the AMT when I exercise ISOs? This is premium content

People who live in high-tax states and itemize tax deductions, or who have significant personal exemptions, can easily owe more in AMT than in regular taxes, particularly if they exercise and hold ISOs with a big spread. The figures in the table below estimate the tipping point...

What is the impact of the recent tax increases on my restricted stock grants? This is premium content

Increases in tax rates indirectly affect the value of grants. Most importantly...

What is a concentrated stock position, and what can I do to protect myself and get cash for other purposes? This is premium content

A concentrated stock position occurs when a significant chunk of your net worth is tied up in a single stock. Strategies for hedging, diversification, and liquidity include...

UPDATES! Can my company set ownership guidelines for company stock? Any survey data about their use? This is premium content

Stock ownership guidelines specify how much company stock you must own in total or as a multiple of salary. Most companies count in the calculation the...

I have various stock option grants with vested options. Do I need to exercise first my oldest grants or my oldest vested options?

There's no requirement for which vested options you must exercise first. The decision of which options to exercise first is part of your...

My company is now granting restricted stock, and the current share price is much lower than I think it will be in a few years. Any tax-planning ideas? This is premium content

For restricted stock, you can make what the tax code calls a Section 83(b) election to be taxed immediately at grant instead of later at vesting, when your stock price, and thus your tax rate, may be much higher. However, before you make your decision, realize that...

UPDATES! Has the likelihood of a tax audit increased? This is premium content

Yes, substantially. In addition, fluctuations of income, which can be caused by stock compensation, are a red flag that can trigger an audit. According to research...

UPDATES! My restricted stock will vest soon. Should I sell the shares at vesting or hold them?

When restricted stock, restricted stock units, or performance shares vest, whether you sell or hold the shares depends on various factors. Some of them are under your control...

UPDATES! If my company requires me to have a foreign bank or brokerage account because of the stock plan, what do I need to know about the FBAR and FATCA reporting rules? This is premium content

Under the FBAR and FATCA rules, you may have special IRS reporting requirements if you hold assets in a bank outside the US. This FAQ explains the requirements and the severe penalties that the IRS imposes for noncompliance...

How do I calculate whether my after-tax gains will be greater by investing my current option spread into a mutual fund or a diversified stock portfolio, as opposed to just waiting to exercise the options at the end of the term? This is premium content

Let's look at the various tax permutations for nonqualified stock options (NQSOs)...

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