Tax Center

Tax Center

Featured in PLANSPONSOR, 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.

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Selected Articles

Tax Changes

Tax Season 2023: What You Must Know About Reporting Rules

Surprise! (Or maybe not.) The federal tax-return reporting for stock compensation and company shares is complicated. For taxpayers who had income from stock compensation and/or company shares last year, this article presents key aspects of the Form 1040 tax return, its associated schedules and forms, and more details on changes for the 2023 tax season.
Restricted Stock Tax Returns

Restricted Stock & RSUs: 10 Mistakes To Avoid On Your Tax Return This is premium content

Restricted stock, restricted stock units (RSUs), and performance shares bring their own very special issues to tax returns. The potential for mistakes has been increased by recent IRS changes in reporting rules. This article presents tips for sidestepping tricky common pitfalls that can even fool professional tax-return preparers.
Tax Changes

NEW! Two Special Tax-Return-Reporting Issues In 2023: Volatile Stock Prices And Employee Mobility This is premium content

The impact of down and volatile stock markets can complicate your tax return. So can interstate mobility and allocation of income between states, a growing issue as more employees work remotely or become digital nomads. This article presents insights on these topics from tax experts.
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NQSO Tax Returns

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

Tax returns involving income from stock options or employee stock purchase plans (ESPPs) can be confusing. Recent changes in IRS reporting rules haven't helped. This article explains errors and nasty surprises to avoid.
Restricted Stock Tax Returns

4 Big Tax-Return Mistakes To Avoid With Stock Options, RSUs, And Stock Sales This is premium content

Tax returns involving income from equity comp and stock sales are prone to mistakes that can lead to overpaid tax, overreported income, IRS penalties, or even an IRS audit. Ouch. This article has insights from tax experts on how to avoid some of the most common errors.
ESPP Basics

VIDEO! Employee Stock Purchase Plans (ESPPs): Taxes

To maximize the benefits of your employee stock purchase plan (ESPP), you must understand the five key tax rules explained in this video. Illustrated by animated examples, the covered concepts include the special rules that depend on how long you hold the shares. Running time: 4:24
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Selected FAQs

NQSO Basics

Video included! 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...
Restricted Stock Tax Returns

NEW! What key forms do I need to report stock sales on my tax return?

The table in this FAQ provides a handy checklist of documents you need to report stock sales acquired from equity awards or an ESPP...
Restricted Stock Tax Returns

UPDATES! What are the biggest mistakes with restricted stock or RSUs that I can make on my tax return, and how can I avoid them? This is premium content

It is all too easy to make costly tax-return errors that attract unwanted IRS attention. Learn how to prevent mistakes...
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Restricted Stock Tax Returns

What are the top 10 questions I should ask before I report my stock sales on my tax return?

You should know the answers to the questions in this FAQ's checklist. They will help you be sure you report your stock sales accurately and avoid costly mistakes that attract the attention of the IRS...
Restricted Stock Basics

Video included! 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...
Tax Changes

UPDATES! What's new for the 2023 tax-return season?

There are a few reporting modifications you should be aware of when preparing your tax return in 2023 (income received in 2022). The key changes are summarized in brief below. For a fuller discussion...
NQSO Basics

Video included! How are nonqualified stock options taxed?

You pay taxes when you exercise nonqualified stock options (NQSOs). The taxable income that you recognize is...
NQSO Basics

When I hold NQSO shares after exercise, what tax applies when I later sell the stock at a gain?

Capital gains tax applies on the amount of your gains above...
ESPP Basics

Video included! 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...
NQSO Basics

Video included! When are nonqualified stock options taxed?

You are taxed when you exercise nonqualified stock options and thus acquire the underlying shares of your company's stock. The difference between the market price of the stock at exercise and your exercise price is...
NQSO Basics

What are capital gain and capital loss? What are the tax rates on capital gains?

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...
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.
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