Your company has granted you stock options. Now what? This article explains the essential facts that you must know to understand your stock options and make the most of them.
To make the most of nonqualified stock options (NQSOs), you must understand their taxation. Learn the tax basics of NQSOs in this video, which features clear and concise explanations by the editor-in-chief of myStockOptions.com. Running time: 2:58.
With expert insights from the editor-in-chief of myStockOptions.com, this video covers the essential aspects of employee stock options that you must know to make the most of them, including the key concepts of vesting, exercise, and the option term. Running time: 4:12.
Here's some advice for financial fitness: take stock of taxes before you exercise! When and how you exercise your stock options can have a major impact on how much tax and which taxes you'll pay.
Stock options aren't just for the folks on mahogany row any more. But turning stock options into the real green stuff takes some know-how. You need to know certain features of your grant to decide when to exercise your options and sell the stock.
Stock options are a major element of your long-term incentive compensation, offering tremendous potential to accumulate personal wealth. Given your stock options' complexity, it’s essential to develop a strategy to realize their full potential.
Understand how and when different taxes apply to NQSOs. You need to consider taxes at exercise and at sale to put together a strategy that maximizes the value of your options.
Get a sense of what you should, and should not, expect in the terms of your stock option grant. A major survey of companies looks at trends in vesting schedules, post-termination exercise rules, and other plan features.
You cannot cash in your stock options immediately. The options must first be vested, and you don't own them forever.
Avoid the mistakes others made with options during past ups and downs in the stock markets. Situations where common errors tend to arise can be classed into nine categories, including option-term expiration, job termination, corporate mergers, financial planning, and various life events.
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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...
The full spread for a nonqualified stock option is included in your gross income for the year of exercise as ordinary income...
Capital gains tax applies on the amount of your gains above...
Capital gain is income that arises from the sale of a capital asset. Gain from the sale of securities held for investment, such as shares acquired from stock compensation...
Yes. The spread at exercise of an NQSO is considered "wages" for the purposes of...
When too much Social Security tax is withheld above the Social Security wage base during a calendar year, your recovery approach depends on whether...
There is a federal tax (called FUTA) to help fund unemployment benefits. FUTA is imposed on...
Many states, along with some counties and cities, impose...
The gain from your nonqualified stock option exercise(s) is totaled on the W-2 with other income in the following boxes...
Your actual tax bracket may be higher or lower than the mandatory federal withholding rate. Whether your company can withhold more depends on...
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