IRS Form W-4 determines how much federal withholding tax will be deducted from your paycheck, at least from your salary. You want to submit a new Form W-4 to adjust your withholding whenever your personal or financial situation changes. In 2020, the IRS introduced a revised Form W-4 that...
To compute the appreciation since exercise, you take the sales price after commissions and subtract...
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...
Yes. The spread at exercise of an NQSO is considered wages for the purposes of...
When too much Social Security tax is withheld above the Social Security wage base during a calendar year, your recovery approach depends on whether...
There is a federal tax (called FUTA) to help fund unemployment benefits. FUTA is imposed on...
Many states, along with some counties and cities, impose...
Generally, state and local income taxes are an itemized deduction on your...
Supplemental income, such as stock compensation, is subject to one of two flat rates that are linked to rates in the income tax brackets. When the income tax rates change, as they did with the...
The holding period to determine whether a capital gain is long-term or short-term starts on the...
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...
When you sell the stock at exercise, companies usually calculate the taxable spread with your...
If you do a cash exercise, your employer will require you to make arrangements to pay additional cash to the company to cover the withholding obligation. If...
The IRS has set deposit rules companies must follow. With a cashless exercise, the broker essentially sells the shares that underlie the options at the time of exercise. The broker sends the company cash from the sale of your shares that is equal to the amount required for tax...
The holding period to determine whether a dividend is qualified and thus taxed at a lower rate starts on...
Former employees' transactions, regardless of the reason for termination, follow the same withholding and reporting requirements that apply to...
Most companies base withholding on your employment status at the time of grant. If you work elsewhere or are retired at exercise or vesting, then...
Yes. While the tax treatment of NQSOs is the same for everyone, the reporting and withholding are different for employees and nonemployees...
The income will be included in tax year 2022, even if you recognize it on the last business day of the year. However, you should confirm...
Only in very limited circumstances, and your company needs to allow the rescission. The company would...
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.
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