Tax Cuts & Jobs Act Quiz

The "Tax Cuts & Jobs Act" (TCJA), which took effect at the start of 2018, includes provisions that either directly or indirectly affect stock compensation. Test your knowledge of this important tax development.

Please answer the following 10 questions. This quiz is also a course of study. The answer key links to content on the topic for follow-up reading. For in-depth courses of study that offer CE credits, see the myStockOptions Learning Center.

1. Under the TCJA, what is the top income tax rate?

33% 35% 37% 39.6%

2. What was the previous top income tax rate?

35% 37% 39.6% 41%

3. What are all of the current income tax rates?

10%, 12%, 22%, 24%, 32%, 35%, 37% 10%, 12%, 25%, 28%, 33%, 35%, 37% 10%, 12%, 22%, 24%, 32%, 35%, 39.6% 10%, 12%, 25%, 28%, 33%, 35%, 39.6%

4. Under IRS guidance, what is the standard flat rate of income tax withholding for stock compensation under $1 million?

28% 25% 24% 22%

5. What was the prior standard flat rate of income tax withholding for stock compensation under $1 million?

28% 25% 24% 22%

6. How did the TCJA affect the standard withholding rate for stock compensation in excess of $1 million during the calendar year?

It did not change the prior rate of 39.6% It lowered the rate from 39.6% to 37% It lowered the rate from 39.6% to 35% It lowered the rate from 39.6% to 33%

7. Did the TCJA change the capital gains tax?

It lowered the rates to 0%, 12%, and 15% It lowered the rates to 0%, 10%, and 18% It did not change the rates but changed the income thresholds that trigger the top rate of 20% It made no changes to the rates or the income thresholds that trigger the top rate of 20%

8. Did the TCJA affect the additional Medicare taxes introduced by the Affordable Care Act (Obamacare)?

No, it did not change the additional Medicare taxes or the income thresholds that trigger them Yes, it repealed the additional Medicare taxes Yes, it did not change the rates but changed the income thresholds that trigger the taxes Yes, it lowered the rates and the income thresholds that trigger the taxes

9. How did the TCJA affect the alternative minimum tax (AMT)?

It repealed the AMT It made no changes to the AMT It lowered the AMT rates from 26% and 28% to a single rate of 20%, making it more likely that ISOs will trigger the AMT It raised the AMT income exemption amounts and phaseout starting point, making it less likely that ISOs will trigger the AMT

10. The TCJA introduced a new type of option/RSU grant for private companies that lets employees defer the income and related taxes for how many years?

3 years 5 years 7 years 10 years

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