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myStockOptions.com Expands Tax-Return Guidance To Help With IRS Forms & Reporting For Stock Sales During Tax Season

Brookline, MA, March 2, 2015 – For people with equity compensation (and their advisors), every tax-return-filing season raises worries about errors that can lead to the overpayment of tax, IRS penalties, or even an IRS audit. This tax-return season presents greater than usual potential for confusion, uncertainty, and expensive mistakes in IRS filings. The big changes for this year include modifications both in the major IRS form used to report stock sales and in the rules for reporting the cost basis of stock compensation.

Anyone who received income from equity compensation or sold shares in 2014 must understand the related reporting on IRS tax forms if they are to avoid costly errors on their tax returns. In the articles and FAQs of its Tax Center, myStockOptions.com provides clear, reliable guidance that can help taxpayers and their tax-return preparers file accurate and error-free IRS tax returns. This concise, easy-to-read content provides insights into the prevention of tax-return mistakes. Examples in plain English show taxpayers and their advisors exactly how to report stock compensation and stock sales on tax returns. A new interactive quiz on tax returns lets users test their understanding of the tax rules before they file.

Tax Center At myStockOptions.com: All The Tax-Return Answers

The Tax Center has all the answers on the filing and reporting of tax returns that involve stock options, restricted stock, restricted stock units, performance shares, stock appreciation rights, and employee stock purchase plans. Core articles and FAQs spell out the most common mistakes people make with stock grants on their tax returns. Taxpayers, their financial advisors, and their accountants can quickly run through these to be sure they submit error-free returns. They can make sense of the reporting with annotated how-to diagrams of IRS tax-return forms, along with diagrams of Form W-2, Form 3922 (for employee stock purchase plans), and Form 3921 (for incentive stock options). Fun, engaging podcasts and a video convey tips for tax returns, including errors to avoid.

"The tax reporting for stock compensation is complex," emphasizes Bruce Brumberg, Editor-in-Chief of myStockOptions.com. "Even accountants and tax advisors sometimes make mistakes. Our goal is to help employees and their financial or tax advisors realize the full potential of equity compensation by educating them about tax rules and helping them prevent costly errors. The last thing taxpayers want is to pay too much tax or incur IRS penalties that take yet more money out of their pockets."

Taxpayers, Beware: Significant Changes In Cost-Basis Reporting On IRS Form 1099-B

In January or February, each broker sends IRS Form 1099-B, or the broker's equivalent substitute statement, to clients who sold shares during the tax year. The information on Form 1099-B is also reported to the IRS. The required stock-sale information on Form 1099-B was recently expanded and now includes not only the gross proceeds from stock sales but also their cost basis (sometimes called the tax basis), the date when the shares were acquired, and whether gains or losses were short-term or long-term.

Form 1099-B for stock sales during the 2014 tax year differs significantly from the 2013 version in several ways, including the following:

  • The IRS redesigned the form to match its box numbers with the columns on Form 8949, which is used to report stock sales. The all-important cost-basis information is now in Box 1e instead of the previous Box 3. Also, for grants made in 2014 and later years, brokers are prohibited from including equity compensation income (as included on Form W-2) in the cost basis reported on Form 1099-B.
  • A new box at the top center of Form 1099-B indicates the appropriate box to check near the top of Form 8949 when reporting the sale.
  • The proceeds that brokers report must be net of commissions and fees.
  • A new box (Box 1g) has been added for adjustments. Box 1g applies only to the amount of any nondeductible loss in a wash sale or to the amount of accrued market discount.

Trustworthy Tax-Return Guidance

In general, cost-basis reporting is now more complex and vulnerable to errors. A diverse set of content at myStockOptions.com explains the background, how to understand Form 1099-B after selling shares from stock compensation or an ESPP, and how to avoid mistakes with the cost basis that can lead to the overpayment of taxes:

Form 1099-B Affects Reporting On IRS Form 8949 And Schedule D

The revised Form 1099-B is essential for completing IRS Form 8949 and Schedule D, which taxpayers who sold shares during the tax year must submit with their IRS Form 1040 tax return. Form 8949 is where taxpayers list the details of each stock sale, using the information on Form 1099-B. Schedule D aggregates the column totals from Form 8949 to report total long-term and short-term capital gains and losses. "However," points out Mr. Brumberg, "the cost-basis information in Box 1e of Form 1099-B may be too low, or the box may be blank. This is because the new rules for cost-basis reporting are mandatory only for stock acquired in 2011 and later years. Additionally, no basis is reported for restricted stock or restricted stock units."

Sound confusing? It is. Fortunately, myStockOptions.com is always here to help. In the Tax Center, the special section Reporting Company Stock Sales presents FAQs with clearly annotated diagrams of Form 8949 and Schedule D. Each FAQ explains and illustrates a different reporting situation involving stock options, restricted stock, restricted stock units, performance shares, employee stock purchase plans, or stock appreciation rights. Clear instructions and diagrams show how to complete the forms, whether the cost-basis information in Box 1e of Form 1099-B is accurate, too low, or omitted.

In the Tax Center, articles on general tax-return topics include:

Demystifying IRS Forms 3922 And 3921

Elsewhere on myStockOptions.com, a pair of articles explains IRS Form 3922 for employee stock purchase plans and IRS Form 3921 for incentive stock options. With annotated examples of the forms that translate IRS jargon into understandable language, these articles, along with detailed FAQs (for both ESPPs and ISOs), clarify what taxpayers need to understand about the information provided by the forms, which can help them better understand the complexities of ESPP or ISO taxation. The forms can help with tax-return reporting. They also give the IRS new tools for catching errors on the tax returns of people who sold ESPP or ISO stock.

Pro Membership Gives Advisors A Crucial Edge During Tax Season

myStockOptions.com Pro is a special membership for financial advisors, CPAs, and other professionals who have clients with stock compensation. MSO Pro gives advisors full access to the whole website and special features in the tools, where they can track and model stock grants for up to 25 clients. Access to the vast library of content at myStockOptions.com puts answers to tough client questions right at the fingertips of advisors, who can create PDFs of crucial content with their logo on it for distribution to clients. For more information, visit http://mystockoptions.com, email sales@mystockoptions.com, or call 617-734-1979.

Corporate Licensing

All the content on myStockOptions.com is ideally suited for licensing by companies and stock plan providers for their stock plan participants. A customized version of the website's award-winning content can be seamlessly woven into companies' HR, benefits, and/or compensation portals. Accessible through any internet browser, 24 hours a day, 7 days a week, licensed content from myStockOptions.com lets stock plan participants answer their own questions about their stock grants whenever they need to learn more—saving time for the stock plan staff and costs for the company. For more information, visit http://mystockoptions.com, email sales@mystockoptions.com, or call 617-734-1979.

About myStockOptions.com

With exclusive articles, 800+ FAQs, podcasts, videos, the Tax Center, interactive quizzes, the Learning Center with courses for CE credit, the Global Tax Guide, an extensive glossary, and dynamic patented tools, myStockOptions.com is the premier online resource of educational content and tools on stock options, restricted stock, restricted stock units, performance shares, stock appreciation rights, and employee stock purchase plans. myStockOptions.com is written and managed by leading experts in equity compensation, and is produced by a company with a long history of successful publications explaining complex legal and financial subjects in plain English.

The accounting journal CPA Wealth Provider selected myStockOptions.com among companies "that have taken the lead through innovation, efficiency, initiative, or growth in the financial-planning area." The Specialized Information Publishers' Foundation honored MSO Pro with one of its Editorial Excellence Awards in the category of Best Interactive Content among niche publishers. The influential consumer magazine PC World has ranked myStockOptions.com among "the most useful sites ever" that "deliver top-notch information, support, and services."

myStockOptions.com has also received extensive favorable coverage in the media, including BusinessWeek, The Wall Street Journal, The New York Times, the San Francisco Chronicle, and The Boston Globe, and on CNN/fn, National Public Radio, PBS, Money.com, and CBSMarketWatch.com.

myStockPlan.com Inc., the publisher of myStockOptions.com, has a separate website on nonqualified deferred compensation, http://www.myNQDC.com.


For more information, please contact Bruce Brumberg and Matt Simon at editors@mystockoptions.com or 617-734-1979.