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.
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.
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.
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.
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.
Tom Davison
Now that you understand the risks of choosing to be taxed at grant with a Section 83(b) election, should you do it? Part 3 takes you through the analysis.
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.
The myStockOptions.com Tax Team
UPDATED FOR 2013! This tax return season has the potential to be more confusing than most if you sold stock last year. You must now file the new IRS Form 8949 along with the revised Schedule D. This change stems from the expansion of the information that brokers must report to you on IRS Form 1099-B. Read this article for tips on these and other crucial tax return topics.
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.
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.
Stanley Trotta with Robert Gordon
With tax increases in mind, now may be a good time to re-evaluate your current financial-planning strategy for equity compensation and company stock holdings to determine whether action is required before new rates apply. Part 2 looks at restricted stock and restricted stock units.
Bruce Brumberg
As part of your year-end and year-beginning tax planning, don't forget to review your holdings in restricted stock, performance shares, and other company stock you may own. This article presents strategies that many experts suggest.
W.E.B. Bantling and Michael Beriss
The time for tax planning is
before the year ends; tax season is too late. Learn about several year-end ideas that apply to nonqualified stock options (NQSOs) and restricted stock/RSUs. Meanwhile, look ahead at the likelihood of tax rate changes under President Obama.
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At a minimum, when the restricted stock vests your company will withhold taxes at the required federal withholding rate for...
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...
If you have more than one batch of company stock, you are responsible for providing your broker with enough information to identify which shares to sell. If you do not specify...
You will need to gather certain information to complete your tax return. The broker will send you IRS Form 1099-B for the proceeds...
It is easy to make tax return mistakes that lead to paying more than necessary or (perhaps worse) an IRS review. This tax season in particular will be more confusing than most because of the new Form 1099-B, the new Form 8949, and the significantly revised Schedule D...
You need to complete Form 8949 and Schedule D for the year when you sold your stock and file them with your Form 1040 federal income-tax return. You do this even if...
You should definitely report a sale for taxes at vesting if you received a 1099-B that shows the proceeds. The IRS will...
The vesting and the sale are separate transactions. First the stock's value at vesting is taxed, unless...
Major changes in the tax reporting and filing for stock sales became effective in 2012 (i.e. starting with stock sales made in 2011). The revised reporting and filing rules now apply every tax season...
Your brokerage firm issues
IRS Form 1099-B by mid-February in the year following the year of sale. Form 1099-B is an important document that you must have to complete your tax return...
When your W-2 income is added to the price you paid for the stock, this is your cost basis on your tax return. The table below presents the compensation portion of your tax basis for all types of stock grants and ESPPs...
The new Form 8949 is where you now list the details of each stock sale on your tax return, while the revised Schedule D is where you now merely aggregate the column totals from Form 8949 to report your total long-term and short-term gains and losses. From our interpretation of the forms and their instructions, myStockOptions.com recommends the following reporting steps to avoid overpaying taxes...
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...
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...
Because the value of the shares at vesting was added to your W-2, and withholding taxes were based on that value, you thought you did not need to file Schedule D with your Form 1040 to report the sale. It is a common mistake to think this...
If you simply lack the funds to pay your income tax, you may want to apply for a payment agreement on the...
Let's first review the tax rules and the W-2 reporting. The tax basis for...
The value at vesting is all ordinary income. You have capital gain only for the increase in the stock price after vesting. Only this gain at sale can be...
The "lapse" is the end of the restriction that prevented the shares from vesting and being transferred to you. The lapse election is the method by which you choose withholding methods and what will be done with the...
Both Rule 10b5-1 and the broader use of restricted stock and RSUs are new, so practices and procedures are evolving. Companies are considering the widespread use of Rule 10b5-1 plans for this...
At some companies, international assignments are often accompanied by what is commonly called an equalization package. To give you an incentive to accept the international assignment, the company agrees to...
This depends on how restricted stock (or restricted stock units) is treated in the acquisition. For example, if the vesting is accelerated, then you will be...
A number of tax law provisions that may affect your stock grants were introduced in the American Jobs Creation Act (AJCA); the final regulations on deferred compensation under IRC Section 409A, which adopt the...
This depends on what triggers vesting. Section 162(m) of the tax code limits your company's deduction to $1 million unless a senior officer's compensation over this amount meets the performance-based exception. Stock grants are structured to meet this by...
When you have more than one job in a year, each company must withhold Social Security tax without considering what the other company withholds. The result could be...
Companies are still uncertain about the exact timing. With NQSOs, the clock doesn't start ticking until you take action to exercise. However, with restricted stock and RSUs...
This can depend on different factors. Whether you can withhold more or not, the mandatory federal withholding rate is...
The vesting and the sale are separate transactions and generate different types of income. Unless you made an 83(b) election to be taxed at grant, you were first taxed on the stock's value at vesting, which created ordinary income to you. With restricted stock units (RSUs), taxation occurs...
There is no simple answer to questions involving the taxation of mobile employees. Generally, each state you live in determines what income is taxable and when. For administrative ease, many companies...
The United States taxes the worldwide income of US citizens regardless of whether the income arises from activities in the US. In addition, the other country may impose taxes too. But the US has tax treaties with certain nations to help taxpayers avoid double taxation...
Former employees' transactions, regardless of the reason for termination, follow the same withholding and reporting requirements that apply to...
Most companies base withholding on your employment status at the time of grant. If you work elsewhere or are retired at exercise or vesting, then...
You pay Social Security and Medicare taxes on all wage and self-employment earnings, regardless of...
As long as you meet the other requirements, to be eligible to make contributions under the tax rules you must have "compensation income" that is at least equal to...
These provisions raise tax complications for both restricted stock and RSU grants, though the issues vary. For tax purposes it does not matter that you must actually retire to vest the shares. With restricted stock, taxation is triggered when the grant is...
You have different types of taxable income. The tax law says you can offset losses against only the...
The wash sale rule disallows the loss on a sale of stock if the same type of stock is...
There is a choice. On the date of death, shares of publicly traded companies are generally...
Typically, all or a
pro rata portion of any restricted stock vests at death. The value of restricted stock that vests and is payable at your death will...
The acceleration and vesting trigger ordinary income. Whether this is W-2 income and taxes are withheld, or whether it is 1099 income, depends on...
For federal income tax purposes, your estate or beneficiaries will receive a "step-up" in the tax basis of the shares to the market value of the stock at the time of death...
With stock grants of normal size, you face no tax impact beyond the standard tax treatment. ISOs may be converted to NQSOs should any acceleration of vesting cause...
You are taxed on the full value of the shares at vesting, when the restrictions lapse. It does not matter whether...
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...
This depends on several factors. Below we present 10 ideas...
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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.
Test your knowledge with our Restricted Stock & RSUs quiz.
Listen to our new podcast on restricted stock and restricted stock unit basics!
Tax Planning For Options, Restricted Stock, And ESPPs After 2013 Tax Law Changes: High-Income Taxpayers Impacted Most (Part 1) 
