What are the top 10 questions I should ask about my stock options?
You should know the answers to the questions in the checklist below. Understanding the topics involved will help you make the most of your stock options and prevent costly mistakes.
1. What type of stock options do I have?
2. Is formal acceptance of the grant required? What happens if I don't accept the grant before exercise?
3. What is the vesting schedule?
4. How long is the term of the stock options?
5. What is the deadline for exercising the options to prevent the expiration of the grant?
7. How do I exercise the stock options?
8. After I exercise my options, in what account will the shares or cash proceeds appear?
In addition, you should understand the tax treatment of the options you have. Nonqualified stock options and incentive stock options are taxed differently. You should also learn about the related tax return reporting. This website's Tax Center covers all tax topics involving stock compensation.