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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.


ISOs

Incentive stock options carry great potential tax benefits, but their taxation can be complex, especially when the alternative minimum tax comes into play. Browse an overview of this section below, or explore the subtopics to the left. See also the ISO sections of the Tax Center.

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Tax Planning For Options, Restricted Stock, And ESPPs After 2013 Tax Law Changes: High-Income Taxpayers Impacted Most (Part 2) This is premium content

Tom Davison and William Whitaker
NEW! The beginning of 2013 brought notable changes in tax rates for people at higher income levels. Part 2 looks at planning strategies involving capital gains rates, the AMT, and ISOs, and considers general ideas related to income-shifting.

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 3921 For Incentive Stock Options: What You Need To Know, And How It Can Help You Understand ISO Taxation This is premium content

Bruce Brumberg
Incentive stock option (ISO) exercises made during a calendar year are reported to you and the IRS on Form 3921 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 ISO taxation.

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.

ISOs: Tax-Return Tips And Traps This is premium content

The myStockOptions.com Editorial Team & Contributors
Tax reporting with incentive stock options (ISOs) can be tricky. Learn what you need to report on your return at each stage of your ISO's life cycle.

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.

Stock Option Financial Planning After Your Tax Return Is Filed And At Year-End (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 the remainder of this year and the next, including AMT risk and capital-loss carry-forwards, to develop your strategy.

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

Alan B. Ungar
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.

The Alternative Minimum Tax Sweet Spot: Planning Opportunities This is premium content

Tom Davison and William Whitaker
"My income is around half a million dollars, and I'm paying the alternative minimum tax. It's annoying, and I feel trapped. Now what?" Surprisingly, the best move may be to increase income, and pay even more alternative minimum tax! Find out why by reading this intriguing article.

The ISO Tax Trap And The AMT Credit Myth: What To Do Before Exercise And At Year-End This is premium content

Alan Ungar
The tax reductions of the past few years have brought both good and bad news for holders of incentive stock options. While you may have lower capital gains rates when you hold the shares long enough after exercise, it is harder to avoid the risks of the alternative minimum tax (AMT) and to fully recover any AMT credit.

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What are the top 10 questions I should ask about my stock options?

You should know the answers to the following questions. Understanding the topics involved will help you make the most of your stock options and prevent costly mistakes...

What do I need to know about the information on IRS Form 3921 for incentive stock options? This is premium content

Your company is required to file Form 3921 with the IRS and either give you a copy or present the same information on a substitute document. With this reporting, the IRS now knows more information about your ISO exercises than it did before, particularly with regard to...

What is the alternative minimum tax?

Running parallel to the regular tax system, the alternative minimum tax (AMT) was designed to require extremely wealthy people to pay their fair share of taxes when credits and deductions could otherwise reduce or eliminate their tax liabilities. However, the reach of the AMT has expanded over time to hit middle-income people it was never intended to tax...

What ISO strategies can help minimize AMT liability? This is premium content

Experts suggest several strategies for you to consider when you exercise ISOs and are concerned about triggering the alternative minimum tax. For example, near year-end or at the beginning of the year, you can...

I know that my ISO exercises will trigger the AMT for me this year or next. Are there planning strategies related to other tax payments and income? This is premium content

When you are intermittently subject to the AMT, tax advisors suggest different planning ideas on shifting income and deductions. You have much less flexibility in your planning when you project paying AMT for the next several tax years. A basic plan is to...

At year-end, is there any general way to determine how many ISOs I can exercise and hold before triggering AMT? This is premium content

One strategy for minimizing AMT is to spread out the exercise of ISOs over...

What is the latest news from Congress about legislation relating to the alternative minimum tax?

The American Taxpayer Relief Act has three provisions on the alternative minimum tax (AMT) that are important for high-income taxpayers, particularly those who exercise incentive stock options...

I have paid AMT, so do I get an adjustment when I sell the ISO shares to get all the taxes back? This is premium content

It's not that simple. AMT requires you to account separately for ISO shares not only at exercise but also when the shares are sold. If you paid AMT as a result of exercising ISOs, your sale of the ISO shares provides an opportunity for you to recover...

Are there any AMT strategies when I also have NQSOs? This is premium content

Yes. The AMT from your ISO exercises might be so high this year that you can also exercise NQSOs and essentially not pay any tax on the spread...

Is it easy to calculate AMT liability?

The AMT rules and forms baffle even tax professionals. You can better understand the process by...

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