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Alert (Nov. 6, 2014): Year-End Financial & Tax Planning

This alert summarizes recent noteworthy additions and updates at myStockOptions.com. Along with the items below, you can also see a full list of the additions and updates that we made at myStockOptions.com during the third quarter of 2014.


'Tis The Season: Year-End Financial And Tax Planning

Along with considering the planning concepts that apply at the close of every year, in 2014 anyone with equity comp and company shares will want to weigh the ongoing impact of the tax changes that took effect in 2013. In particular, if you are considering option exercises or stock sales at year-end, be aware of the thresholds for annual income that trigger higher tax rates. Good points of entry into our year-end content, which has been fully updated for 2014, include the following key articles and FAQs:

Many other year-end articles and FAQs are available in the year-end section of myStockOptions.com. For ideas on year-end planning with nonqualified deferred compensation, see our sibling website myNQDC.com.


Rising Social Security Wage Base In 2015 Affects Stock Comp

Along with ordinary income tax, Social Security and Medicare taxes are withheld from the income recognized at the vesting of restricted stock or restricted stock units, the exercise of nonqualified stock options or stock appreciation rights, and purchases in a nonqualified ESPP. The Social Security Administration has announced the annual increase in the wage base that is subject to Social Security tax. In 2015, the Social Security income ceiling will be $118,500 (up from $117,000 in 2014). No Social Security tax is owed on yearly income above that threshold. With the 6.2% rate of Social Security tax and the income cap, the maximum possible Social Security withholding in 2015 is $7,347.

No income ceiling applies to the Medicare tax, which applies at the rate of 1.45% for single filers with yearly income up to $200,000 and joint filers with yearly income up income up to $250,000, and at 2.35% for taxpayers whose yearly income is above those thresholds.


Engaging New Videos On Employee Stock Purchase Plans, Restricted Stock/RSUs

Several lively videos at myStockOptions.com serve as gateways into our educational resources. Our newest addition is on employee stock purchase plans:

Other videos at myStockOptions.com include two on restricted stock and RSUs: Restricted Stock & RSUs (Part 1): Key Aspects To Know (4:37) and Restricted Stock & RSUs (Part 2): Taxes And Related Key Decisions (3:57). As with all of our educational content and tools, the videos can be licensed and customized by your company.


Podcasts With Expert Commentaries From Contributing Authors

myStockOptions.com offers podcasts on many topics in equity compensation. Adding to our audio recordings on the basics of equity comp, we have begun a series of podcast interviews with some of our expert contributing authors on a variety of subjects. Below are just a few of the latest additions to our growing body of author interviews.

  • A Holistic Approach To Equity Compensation, And Special Dilemmas Faced By Executives (running time 10:35). CFP Geoffrey Zimmerman explains why it is important to see equity awards in the big picture of your life, including your circumstances, values, activities, and goals, before you make any financial-planning decisions with your grants. He also comments on the special planning dilemmas faced by senior executives with stock compensation.
  • How To Maximize The Value Of Stock Compensation While Minimizing Risk (running time 11:08). Your stock compensation may be your most valuable investment. Financial advisor William Baldwin explains his approaches to minimizing risk while trying to optimize the value of equity awards.
  • How Pre-IPO Stock Compensation May Change Upon The Company's IPO (running time 10:30). As privately held companies prepare for their market debuts, they make changes in equity compensation programs. Compensation consultant Ryan Harvey explains some of the shifts you can expect in your stock grants both during the period leading up to your IPO and after your company goes public.
  • Taking An Overseas Assignment: Stock Compensation For Internationally Mobile Employees (running time 16:07). For internationally mobile employees, the tax treatment of equity compensation can be extremely complex. In this interview, Deloitte consultant Mark Miller explains the issues that employees should consider when they are preparing to take a job assignment in a foreign country.

New Quizzes On M&A And Pre-IPO Topics

Bringing our total number of quizzes to a dozen, two new quizzes at myStockOptions.com test your knowledge of equity compensation issues in M&A transactions and pre-IPO companies. All 12 quizzes are available on the left side of our home page, and each also appears in the relevant content section. The answer key of each quiz has links to related articles and/or FAQs, making the quizzes helpful learning tools. Companies can license and customize the quizzes for their stock plan participants. Our short quizzes are separate from the Learning Center, which has in-depth self-study courses and exams offering continuing education credits for Certified Equity Professionals (CEPs) and Certified Financial Planners (CFP).


Looking Ahead: Changes To IRS Form 1099-B Will Add To Cost-Basis Confusion On Tax Returns

After you sell company stock, your brokerage firm will issue IRS Form 1099-B. You need the information on the form to complete your tax return for the year of sale. Special issues with Form 1099-B arise in the way it reports the cost basis of sold shares that were acquired from stock compensation. For the 2014 tax year, the IRS recently changed Form 1099-B, adding to the potential confusion about cost-basis reporting during the upcoming tax-return season. To learn about the changes and how to avoid costly mistakes on your tax return, see our newly updated FAQ on this complex topic.


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