Tax Center

Tax Center

As 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.

Want to know more? Listen to our podcast on tax return tips and how to avoid reporting mistakes!

Check out our podcast and video on the tax forms and reporting rules for stock sales.

Selected Articles

Restricted Stock Basics

Restricted Stock Units Made Simple (Part 2): Taxation

The taxation of RSUs generally resembles that of restricted stock but carries some important differences.
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.
NQSO Tax Returns

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

Puzzled by your Form W-2, 1099-B, 3921, or 3922? Need to report sales of stock on Form 8949 and Schedule D? Tax returns involving income from stock options or ESPPs can be confusing. Recent changes in IRS reporting rules haven't helped. This article explains errors and nasty surprises to avoid.
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ESPP Basics

ESPPs 101: Taxation Made Simple (Part 1)

Your employee stock purchase plan may be one of the best benefits offered by your company. However, to appreciate the advantages of enrolling in the ESPP you must understand the tax consequences of participation. This article series explains the tax basics.
NQSO Tax Returns

NQSOs: Tax-Return Tips And Traps This is premium content

Understand the basic tax-reporting requirements of stock options. This article reviews what you need to report on your tax return.
NQSO Tax Returns

Tax Season 2020: What You Need To Know About New Reporting Rules

Ready or not, tax-return reporting has changed yet again for the 2020 tax season. Prepare yourself with this article. Our editorial team presents the key points you need to know for your federal tax return if you had income in 2019 from stock compensation.
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 Withholding

UPDATES! When my restricted stock or RSUs vest, will I need to make estimated tax payments? This is premium content

At a minimum, when the restricted stock vests your company will withhold taxes at the required federal withholding rate for...
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

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...
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Restricted Stock Tax Returns

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 in the 2020 tax season...
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...
SAR Tax Returns

UPDATES! If I file an extension to complete my tax return after the IRS deadline, are there any mistakes I should avoid that involve stock compensation income? This is premium content

In any tax year, stock compensation income, such as from an NQSO exercise, an ISO or ESPP disqualifying disposition, or the vesting of restricted stock, can raise your income tax and make your return complex. Mistakes include not paying taxes owed with...
NQSO Basics

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...
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...
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...
NQSO Basics

UPDATES! What is 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...
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...
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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