Tax Center

Tax Center

As featured in PLANADVISER, Accounting Today, and CPA Practice Advisor, the myStockOptions Tax Center explains the tax withholding, reporting, and filing for stock options, restricted stock/RSUs, performance shares, ESPPs, and SARs.

Selected Articles

Tax Changes 2003–2019

Six Ways Tax Reform Affects Your Stock Compensation And Financial Planning

Podcast included! Effective from the start of 2018, the Tax Cuts & Jobs Act includes provisions that either directly or indirectly affect stock compensation, whether in financial planning or in stock plan administration (though the core tax treatments have not changed). This article details six provisions that have an impact on the taxation of stock compensation or holdings of company shares.
Tax Changes 2003–2019

NEW! Tax Season 2019: What You Need To Know About The New Reporting Rules And Tax Rates This is premium content

There are two major groups of changes to be aware of during the 2019 tax season. This article explains what you need to know to file your tax return accurately and avoid costly mistakes.
NQSOs: W-2s & Tax Returns

UPDATES! 12 Tax-Return Mistakes To Avoid With Stock Options And ESPPs This is premium content

Tax returns involving income from stock options or ESPPs can be confusing. The potential for mistakes is increased by new IRS reporting forms and rules for the 2019 tax season. This article explains errors to avoid when reporting stock compensation and stock sales on your tax return.
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Restricted Stock Basics

VIDEO! Restricted Stock & RSUs (Part 2): Taxes & Key Decisions After Tax Reform

Presented by the editor-in-chief of myStockOptions.com, this engaging video covers the tax treatment of restricted stock and restricted stock units (RSUs), including the tax rates, the timing of taxation, withholding, and the key points you must know after tax reform. Running time: 3:37
Tax Changes 2003–2019

NEW! Private Company Stock Options And RSUs: 10 Facts To Know About The New Tax-Deferral Opportunity This is premium content

Stock options and RSUs are popular at startups and late-stage pre-IPO companies. However, shares in privately held companies typically lack liquidity and thus cannot be sold, creating difficulty when taxes are owed on the income recognized. To address this problem, the Tax Cuts & Jobs Act introduced an income-deferral opportunity for certain types of stock compensation at privately held companies in Section 83(i) of the tax code.
NQSO Basics

VIDEO! Employee Stock Options: NQSO Taxation

To make the most of nonqualified stock options (NQSOs), you must understand their taxation. Learn the tax basics of NQSOs in this video, which features clear and concise explanations by the editor-in-chief of myStockOptions.com. Running time: 2:58.
This is simply a selection of the many articles in this section.
Use the navigation to the left to explore all of the categories in this section.

Selected FAQs

Restricted Stock Basics

Do you have a brief overview of the tax treatment for stock options, restricted stock, RSUs, and ESPPs? This is premium content

The table in this FAQ shows the types of taxes, when they are triggered, and the tax withholding (if any) for various forms of equity compensation granted in the United States. For details, examples, and illustrations...
Tax Changes 2003–2019

UPDATES! What are capital gains and capital losses? What are the capital gains tax rates?

Capital gain is income that arises from the sale of a capital asset. Gain from the sale of securities held for investment, such as shares acquired from stock compensation...
NQSO Basics

What happens with taxes on stock options if I live or work in different states during the period between grant and exercise? This is premium content

Generally, each state you live in determines what income is taxable and when. For administrative ease, many companies...
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NQSO Basics

How is capital gain calculated?

The amount of your capital gain is the difference between your sales price and your tax basis in the stock. However, with stock from equity compensation, your tax basis can be harder to determine. It is...
Tax Changes 2003–2019

UPDATES! What's new for tax-return season?

Here's a quick take on issues to be aware of when preparing your federal tax return. In brief, there are two types of changes to be aware of during the 2019 tax season...
ESPP Basics

How am I taxed if I participate in a tax-qualified (Section 423) employee stock purchase plan?

You are taxed only at sale, not when the shares are purchased. However, the rules for ESPP taxation are more confusing...
ESPP Basics

What is an ESPP disqualifying disposition, what can cause it, and why does my company care? This is premium content

A disqualifying disposition occurs when you sell or otherwise...
Restricted Stock Basics

When and how is a grant of restricted stock or RSUs taxed?

The timing of taxation is different than that of stock options. You pay tax at the time the restrictions on the stock lapse. This occurs when...
Restricted Stock Basics

What happens with taxes on restricted stock or RSUs if I live or work in different states during the period between grant and vesting? This is premium content

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...
NQSO Withholding

After I exercise NQSOs, will I need to make estimated tax payments? This is premium content

At a minimum, when you exercise your stock options, your company will withhold taxes at the required federal withholding rate for supplemental income. However, depending on your income, this minimum withholding may not be enough. If so, you will need to...
This is simply a selection of the many FAQs in this section.
Use the navigation to the left to explore all of the categories in this section.