Tax Center

Stock Option Financial Planning After Your Tax Return Is Filed And At Year-End (Part 1)

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

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.

Global Tax Guide To Equity Compensation For International & Cross-Border Employees UPDATED!

The myStockOptions.com Tax Team
The Global Tax Guide explains the taxation of equity awards in 32 countries: stock options, restricted stock, restricted stock units, performance shares, stock appreciation rights, and employee stock purchase plans. The country profiles are regularly reviewed and updated as needed. We do our best to keep the writing lively.

Restricted Stock Units Made Simple (Part 2): Taxation

Matt Simon
The taxation of RSUs generally resembles that of restricted stock but carries some important differences.

ESPP Taxation Made Simple

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.

Decisions At Grant With Restricted Stock (Part 1): Tax Fundamentals

Tom Davison
Thanks to the IRS, with restricted stock you have to make decisions immediately at grant. Learn the rules that accompany this increasingly popular type of equity compensation.

Restricted Stock Taxation: What You Need To Know (Part 2)

Bruce Brumberg and Kate Victory
Restricted stock grants carry their own requirements and tax rules, which can significantly differ from those of stock options.

Fundamentals Of Employee Stock Purchase Plans (Part 3): Tax Treatment Of Your Purchases And Sales

Alisa Baker
Now let's look at the employee tax issues associated with employee stock purchase plans (ESPPs). ESPP tax rules can be more confusing and less logical than those that govern stock options.

Fundamentals Of Employee Stock Purchase Plans (Part 4): Down Markets And Other Tax Topics

Alisa Baker
In Part 4 we consider the taxation of employee stock purchase plans (ESPPs) that are not qualified under Section 423, and the tax issues of down markets, death, and withholding.

IRS Form 3922 For ESPPs: What You Need To Know, And How It Can Help You Understand ESPP Taxation

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.

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NEW! What tax changes under the American Taxpayer Relief Act affect stock compensation?

With effect from January 1, 2013, the following changes in tax rates apply to ordinary income triggered by stock option exercises, restricted stock and RSU vesting, and ESPP purchases...

NEW! How have the withholding taxes on my equity compensation changed in 2013?

With effect from January 1, 2013, federal tax rates in the highest bracket for ordinary income rose under the American Taxpayer Relief Act of 2012. The table in this FAQ shows three of the income points where withholding on equity compensation may change...

NEW! How does the health-care reform law affect my Medicare tax and stock compensation planning?

Two features in the new law affect your Medicare tax and any planning to minimize it. For people whose yearly income is above certain thresholds, the Medicare tax on both compensation and investment income increased in 2013, when...

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! When I file an extension to complete my tax return after the IRS deadline, are there any mistakes I should avoid that involve stock grant income?

Stock compensation income can raise your income tax and make your tax return complex. The IRS has a form that lets you apply for an automatic six-month extension for the due date of your tax return (until mid-October). Mistakes include not paying taxes owed with...

UPDATED! Has the likelihood of a tax audit increased?

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...

After I exercise NQSOs, will I need to make estimated tax payments?

At a minimum, when you exercise your stock options, your company will withhold taxes at the required federal withholding rate for supplemental income. However, depending on your income, this minimum withholding may not be enough. If so, you will need to...

Are there any strategies for paying estimated taxes on income from stock options and restricted stock?

Estimated-tax periods end on the last days of March, May, August, and December, with payments due by the 15th (or the next business day) of the following month. If you are paying estimated taxes, one strategy is that just after the start of an estimated-tax period you can...

Will my employer report to the IRS any income from an NQSO exercise?

Your employer will include the amount of the spread at exercise of an NQSO on...

How does my employer calculate the amount of withholding due at the exercise of a nonqualified stock option?

When you sell the stock at exercise, companies usually calculate the taxable spread with your...

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