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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.



NQSOs

Nonqualified stock options (commonly abbreviated NQSOs) are the most common type of option. Browse an overview of this section below, or explore the subtopics to the left. See also the NQSO sections of the Tax Center.

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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
UPDATED FOR 2013! 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.

New Tax Act And Medicare Surtax: Impact On Stock Option And Restricted Stock Strategies This is premium content

Alan B. Ungar
NEW! The American Taxpayer Relief Act and the Affordable Care Act introduced tax-rate increases you need to consider in deciding when to exercise stock options, when to sell company stock, and how to plan around income from restricted stock vesting. This article explains the changes in tax law and suggests strategies for minimizing the new taxes.

Tax Strategies With Stock Options, Restricted Stock, And Deferred Compensation This is premium content

Andy Wagner
NEW! Having both nonqualified stock options and nonqualified deferred compensation gives you a tremendous amount of flexibility to optimize your financial planning and tax situation. In this article, I explain how I have used the two plans in concert with one another.

Taking An Overseas Assignment: Stock Compensation For Mobile Employees (Part 1) This is premium content

Mark Miller
For employees and executives, international travel and relocation are increasingly common. The taxation of "mobile employees" is always complex, and never more than with equity compensation. Part 1 introduces the key concepts and rules, including the sourcing and apportioning of income.

Taking An Overseas Assignment: Stock Compensation For Mobile Employees (Part 2) This is premium content

Mark Miller
International assignments or relocations can present attractive opportunities for career advancement. However, the taxation of equity compensation for mobile employees raises complex issues. Part 2 looks at specific scenarios, withholding taxes, and tax equalization.

How To Report Sales Of Company Stock On Your Tax Return

The myStockOptions.com Tax Team
UPDATED FOR 2013! Learn how to report your sales of stock on the new Form 8949 and revised Schedule D of IRS Form 1040.

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

Bruce Brumberg and Lynnette Khalfani
UPDATED FOR 2013! This tax return season has the potential to be more confusing than most if you sold stock last year. Read this article for tips on reporting stock sales and on other crucial tax return topics.

VIDEO! New Tax Return Forms & Reporting Rules For Stock Sales

Bruce Brumberg
UPDATED FOR 2013! If there's a way to make learning about tax forms fun, we'll try it. Learn how to prevent costly tax return mistakes with this animated presentation on IRS Form 1099-B, IRS Form 8949, and Schedule D.

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

Bruce Brumberg
UPDATED FOR 2013! 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.

Stock Option Fundamentals (Part 3): Income Taxes And Withholding This is premium content

Marilyn Renninger
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.

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How is the spread at exercise of an NQSO taxed for federal income-tax purposes?

The full spread for a nonqualified stock option is included in your gross income for the year of exercise as ordinary income...

What are some year-end strategies for restricted stock and stock options? This is premium content

This depends on several factors. Below we present 10 ideas...

For NQSOs or SARs exercised on the last business day of 2013, or for restricted stock that vests on that day, is the income taxable in 2013 or 2014? This is premium content

All exercises with an exercise date in 2013, and all restricted stock with a vesting date in 2013, will be included in 2013 taxes and on your W-2 for 2013, and will count...

When I hold NQSO shares after exercise, what tax applies when I later sell the stock?

Capital gains tax applies on the amount of your gains above...

UPDATED! What are capital gains and capital losses? What are the capital gains tax rates?

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...

UPDATED! Is the spread at exercise of a nonqualified stock option subject to Social Security taxes? This is premium content

Yes. The spread at exercise of an NQSO is "wages" for purposes of...

Is the exercise spread of NQSOs subject to federal unemployment taxes?

There is a federal tax (called FUTA) to help fund unemployment benefits. FUTA is imposed on...

Is the spread at exercise of a nonqualified stock option subject to state and local taxes? This is premium content

Many states, along with some counties and cities, impose...

May I have my employer withhold more taxes upon my exercise of an NQSO than the minimum required amount? This is premium content

Your actual tax bracket may be higher or lower than the mandatory federal withholding rate. Whether your company can withhold more depends on...

What is backup withholding? How do I prevent it or recover it? This is premium content

Backup withholding is a form of tax withholding on income from stock sales, along with interest income, dividends, or other types of payments that are reported on Form 1099. Your brokerage firm is required to make backup withholding if you are...

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