Alert (Oct. 22, 2013): Tax Changes Affect 2013 Year-End Planning For Equity Compensation And Company Shares
Recent additions and updates at myStockOptions.com have focused on year-end financial and tax planning in light of the new tax rates that became effective in 2013. These and other major recent updates and additions at myStockOptions.com are summarized below. You can also see the full list of new content and revisions in the third quarter of 2013 at myStockOptions.com.
The Impact Of Tax-Rate Changes On Year-End Planning In 2013
Along with the financial- and tax-planning concepts that apply at the close of every year, in 2013 people with equity comp and company shares will want to consider the impact of the tax changes that took effect this year under the American Taxpayer Relief Act and the Affordable Care Act. In particular, if you are considering option exercises or stock sales at year-end, you should be aware of the thresholds for higher tax rates—and may want to consider keeping your income below them, if possible. Our major year-end content, which has been fully updated for 2013, includes the following articles and FAQs (see the section Year-End Planning for all related content).
- Top Ideas For Year-End Tax Planning With Stock Compensation (Parts 1 and 2)
- Year-End Strategies For Restricted Stock: Ideas To Consider
- Year-End Strategies For Employee Stock Purchase Plans: Ideas To Consider
- Stockbrokers' Secrets (Part 3): Year-End Planning For NQSOs, Restricted Stock, And RSUs
- Stockbrokers' Secrets (Part 7): Year-End Planning For ISOs
- What are some year-end strategies for restricted stock and stock options?
- Next year I may be in a higher tax bracket. I am thinking about exercising my nonqualified stock options before then to accelerate income into this year. What issues do I need to think about?
- I am thinking about selling some company stock this year, as next year my income will trigger the 3.8% Medicare surtax on investment income, along with higher tax rates on capital gains and dividends. After selling the stock this year, I would then repurchase it to reset the basis. What are the issues I need to consider?
How The Supreme Court's Decision On Marriage Equality Affects Stock Plans
The Supreme Court's ruling in favor of marriage equality affects more than 1,000 federal laws and regulations. Among them are those about the design and administration of employee benefit plans. While stock plans are not affected by federal laws in the same way as qualified retirement plans (e.g. a 401(k) plan) or health and welfare plans, the changes that will be required in these other benefit plans will probably lead to similar modifications in stock plan documents. To find out how, see our new FAQ on this topic.
The Top Ten Things To Know About Your Equity Compensation
We have launched a series of FAQs that introduce the major concepts and points that employees should consider when they receive an equity grant or start to participate in an employee stock purchase plan. These four FAQs present the top ten things to ask or think about with stock options, restricted stock or RSUs, performance shares, or ESPPs. Each FAQ is available without registration and contains a helpful set of links for further reading at myStockOptions.com.
Risk Management For Executives And Employees With Company Stock: Two New Articles Present Key Issues And Strategies
With equity compensation or shares of company stock, risk comes in various forms. In the section Financial Planning: High Net Worth, a pair of new articles addresses two different areas of risk management for executives and employees.
In The Equity Compensation Planning Dilemma For Corporate Executives, CFP Geoffrey Zimmerman examines the tricky issues that can arise for corporate insiders whose stock transactions are highly visible—and who "must perform a delicate balancing act to meet the needs, demands, and perceptions of the various constituencies interested in [their] company's stock." In the article, Mr. Zimmerman offers expert guidance for executives and managers caught in the headlights of these competing forces. This includes developing a carefully structured approach, including the use of a Rule 10b5-1 trading plan. This type of plan allows for pre-determined transactions involving company stock to take place systematically, even while trading windows are closed.
For many employees and executives, the value of their equity compensation represents their largest investment. With so much at stake, making smart financial decisions is vital. To this end, strategies for minimizing financial risks are the subject of a new article by attorney and financial advisor William Baldwin: A Least-Regret Analysis For Equity Compensation: Maximizing Value While Minimizing Risk. Among many other points, the author's "least regret" approach presents, perhaps surprisingly, a way to use stock-price volatility to your advantage.
At Year-End, Don't Forget The NQDC
Over at our sister website myNQDC.com, a comprehensive resource about nonqualified deferred compensation (NQDC), a helpful new FAQ presents the major planning considerations for NQDC at the close of 2013. See also the full range of content on tax topics at myNQDC.com.
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