Richard Friedman
Your company may no longer be using stock options. Instead, it may be granting restricted stock, restricted stock units, or performance shares. While these grants don't carry the same upside as stock options, they have benefits you will surely appreciate once you understand their special features.
Matt Simon
NEW! Restricted stock units (RSUs) have become the most popular alternative to stock options. While RSUs share many of the same issues as restricted stock, there are differences, and it is important to understand the basics of RSUs in their own right.
Matt Simon
NEW! The taxation of RSUs generally resembles that of restricted stock but carries some important differences.
Stanley Trotta with Robert Gordon
With tax increases in mind, now may be a good time to re-evaluate your current financial-planning strategy. Should you take action with stock compensation now or wait until new rates apply? Part 2 looks at restricted stock and restricted stock units.
Richard Friedman
Understand financial planning for restricted stock and RSUs. Part 1 discusses the growing popularity of these grants, their special features, and the related tax planning.
Richard Friedman
Careful planning can help you maximize the value of restricted stock and RSUs by preparing you for decisions you must make. Part 2 covers complex issues in financial, estate, and retirement planning.
Alan B. Ungar
In a growing trend, your company may let you choose between stock options and restricted stock. Which is better for you? Learn techniques to analyze your financial situation and goals so that you can make the right choice.
Alan B. Ungar
As noted in Part 1, many companies are developing employee-choice programs that allow you to choose between stock options and restricted stock. Part 2 provides a method of analysis to help your decision-making.
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.
Bruce Brumberg and Kate Victory
Along with stock options, your company has awarded you restricted stock. Restricted stock grants carry their own requirements and tax rules, which can significantly differ from those of stock options.
Return to top of page
At a minimum, when the restricted stock vests your company will withhold taxes at the required federal withholding rate for supplemental income (assuming you didn't make a 83(b) election to pay the taxes at grant instead). However, depending on your income, this minimum withholding may not be enough. If so, you will need to...
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...
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...
A casualty or theft loss would allow you to deduct the lost amount against your ordinary income, subject to some limits. However, Treasury regulations and court rulings would probably stand in your way. Nevertheless, what you can do is...
The IRS can seize your stock options if it applies a federal tax lien to you for unpaid taxes. After seizing your stock options, the IRS can also...
It is easy to make mistakes that lead to paying more tax than you need to, or that may even prompt a review by the IRS. When the restricted stock vests, the full value of the shares at vesting is reported on your...
Restricted stock shares are issued up front at grant, but you do not own them outright and cannot sell or transfer the shares until the time-based restrictions lapse. With standard restricted stock units the situation is basically similar, while with performance shares your company sets goals that must be met, such as...
Generally, yes, with two exceptions. First, with RSUs you cannot...
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...
Stock-based performance plans have targets that, when reached by the end of the measurement period, trigger vesting or payout according to the structure of the plan. Data from varoius surveys show that the most common metrics are...
Return to top of page
Tax 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.
