Tax errors can be costly! Don't draw unwanted attention from the IRS. Our Tax Center explains and illustrates the tax rules for sales of company stock, W-2s, withholding, estimated taxes, AMT, and more.
ISOs
Incentive stock options carry great potential tax benefits, but their taxation can be complex, especially when the alternative minimum tax comes into play. Browse an overview of this section below, or explore the subtopics to the left. See also the ISO sections of the Tax Center.
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.
Video included! Incentive stock options (ISOs) are potentially quite valuable. However, they are more rule-bound, complex, and risky than nonqualified stock options (NQSOs). In fact, mistakes with ISOs can be quite costly. This article presents five key aspects of ISOs that you must know at the time of grant, before you exercise the options, and when you sell the shares.
Exercising incentive stock options (ISOs) and holding the shares beyond the calendar year of exercise triggers the need for the alternative minimum tax (AMT) calculation. While you should consult a financial advisor, accountant, or tax lawyer about the AMT and your personal situation, this article details several strategies that experts often suggest.
Videos included! Stock options rose to fame in the 1990s. Even on the TV sitcom Seinfeld, Elaine got stock options and wouldn't shut up about them (annoying the heck out of George). Options remain popular. This article explains the two types and how they work.
Video included! Learn how and when income from ISOs is subject to taxes, including the alternative minimum tax. You must consider taxes at both exercise and sale to put together an optimal strategy.
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.
You should know the answers to the questions in this FAQ's checklist and be familiar with the topics presented in the related video. Understanding these will help you make the most of your stock options and prevent costly mistakes...
With incentive stock options (ISOs), when you hold the shares for more than one year from exercise and two years from grant, the entire gain at sale over the exercise price is...
Your company is required to file Form 3921 with the IRS and either give you a copy or present the same information on a substitute document. With this reporting, the IRS now knows more information about your ISO exercises than it did before, particularly with regard to...
One strategy for minimizing AMT is to spread out the exercise of ISOs over multiple years. Following the calculation steps outlined in this FAQ, you can determine what is sometimes called your AMT cushion or crossover point...
Companies in the United States can grant two types of stock options: nonqualified stock options (NQSOs), the most common type, and incentive stock options (ISOs). The table in this FAQ summarizes and compares the major traits...
Form 1099-B or the equivalent substitute statement is necessary for the accurate completion of your tax return. Five facts you must know about this reporting to avoid tax-return mistakes are...
Tax errors can be costly! Don't draw unwanted attention from the IRS. Our Tax Center explains and illustrates the tax rules for sales of company stock, W-2s, withholding, estimated taxes, AMT, and more.
Listen to our podcast on the basics of stock options, or watch our videos on core concepts and ISO taxes.
Basics
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