How tax reform affects year-end planning in 2018
Year-end checklist 2018: what you need to consider
Articles and other resources on year-end planning
Tax-season suprise: major changes in tax-return forms
myStockOptions featured at and other major media outlets
Year-end CE credits for CEPs, CFPs, CPWAs, CIMAs, and others
Save the date: myStockOptions financial-planning conference in San Francisco/Silicon Valley area, June 18, 2019



Tax reform, in the Tax Cuts & Jobs Act (TCJA), took effect at the start of 2018 (see the related article). The tax changes it brought affect year-end planning for stock compensation and company shares. This newsletter highlights some of our award-winning content on year-end financial and tax planning, including issues affected by the new tax law and strategies that apply every year.

Don't want to wait for our quarterly newsletter updates? The Blog is a great way to stay informed about new developments in equity compensation. You can also follow us on Twitter and Facebook. In addition, I now have a blog at

—Bruce Brumberg (Editor-in-Chief)

How does tax reform affect year-end planning in 2018?

This is the first year-end season when employees with stock compensation must consider the tax changes introduced in 2018 by the Tax Cuts & Jobs Act (TCJA). Fortunately, the new tax law doesn't make any huge changes in the usual year-end steps that you and your financial advisor should consider when you have stock options, restricted stock/RSUs and company stock holdings.

"Tax reform" is the blanket term often applied to the TCJA, which made two major types of changes in the tax laws for individuals. In some areas, the TCJA made straight-up tax cuts. In others, it restructured or eliminated tax provisions. Each of those two categories affects your year-end strategies differently, as explained below.

Tax-Cut Provisions

The TCJA modified the income tax rate and income ranges of each tax bracket, including the reduction of the top income tax rate from 39.6% to 37%. However, we still have the same number of tax brackets (lucky seven), and the capital gains tax and the Medicare surtaxes remain unchanged.

What this means: Whenever you consider exercising stock options or selling shares at year-end (or recognize any extra income), you need to know your tax bracket. Even with the lower tax rates that took effect in 2018, you still want to consider the income thresholds that would trigger a higher tax rate and the Medicare surtax on investment income.

In general, you want to do the following multi-year planning, just as you did before the TCJA:

  • Keep your yearly income under the thresholds for higher tax rates and know the additional room you have for more income in your 2018 and 2019 tax brackets.
  • Recognize income at times when your yearly income and tax rates may, according to your projections, be lower.

Underwithholding Risk

The flat withholding rates for supplemental wages, including stock compensation, are tied to the seven income tax brackets, so those changed too. For income up to $1 million in a calendar year, the withholding rate is now 22%. For amounts of income in excess of $1 million during a calendar year, the withholding rate is 37%.

What this means: The 22% rate of withholding may not cover all of the taxes you will owe on income from an exercise of nonqualified stock options (NQSOs) or a vesting of restricted stock or restricted stock units. You must therefore know the tax bracket for your total income and assess the need to (1) put money aside to pay the additional taxes with your tax return, (2) increase the withholding on your salary, or (3) pay estimated taxes.

See the full FAQ for additional details about the impact of the TCJA on charitable donations of stock to maximize your itemized deductions, and on the alternative minimum tax (an issue with incentive stock options).

Eaton Vance: Your exposure, our expertise

Eaton Vance offers strategies and tools to help financial advisors and investors:

  • Diversify or manage the risks of concentrated stock holdings
  • Design a tax-managed completion portfolio around a concentrated security
  • Enhance risk-adjusted portfolio returns and generate current income
  • Minimize capital gains and other taxes

Financial advisors: Call our Wealth Strategies Group at 617-672-8500.

Return to table of contents

What should be on my 2018 year-end checklist of items to review, know, and consider about my stock comp?

The checklist below summarizes what you need for comprehensive year-end planning with stock compensation.




  • your situation, including short-term cash needs that may prompt you to sell company stock and/or exercise options
  • whether your decisions should be entirely tax-driven
  • your outlook for both your company's stock price and your job
  • how comfortable you are with your concentration in company stock and whether you should diversify
  • multi-year projections for your income and taxes
  • donations in company shares instead of in cash


  • Company and brokerage firm statements, whether online or in print. You will need them for tax-return reporting.

For general financial-planning points to consider with stock compensation, see a related FAQ. For guidance on year-end planning with nonqualified deferred compensation, especially deferral elections for 2019, see the related FAQ at our sibling website

Return to table of contents

Articles on year-end financial and tax planning for stock compensation and company shares

Below we list our articles about year-end financial and tax planning, all of which have been fully updated for year-end 2018. To see our entire array of content on year-end planning, see the year-end section at For guidance on year-end planning with nonqualified deferred compensation, especially deferral elections for 2019, see the related FAQ at our sibling website

Our award-winning content is available with Premium or Pro Membership or through corporate licensing.

12 Ideas For Year-End Planning With Stock Compensation (Parts 1 and 2)
Consider year-end or year-beginning tax planning with your stock compensation and company stock holdings. While investment objectives, not tax considerations, should generally drive your decisions, here are several ideas to review to prevent paying more taxes than necessary. Part 1 is available free.

7 Year-End Strategies For Restricted Stock, RSUs, And Performance Shares, by Bruce Brumberg
As part of your year-end and year-beginning tax planning, don't forget to review any grants of restricted stock, RSUs, or performance shares that vested this year, plus other company stock holdings. This article presents strategies many experts suggest.

Year-End Strategies For Employee Stock Purchase Plans: Ideas To Consider, by the myStockOptions Editorial Team
When you think about year-end financial and tax planning, don't forget to review shares acquired through an employee stock purchase plan. This article outlines issues and strategies to contemplate.

PODCAST! How Tax Reform Affects Year-End Planning For Equity Comp And Company Shares
This is the first year-end season when taxpayers with stock compensation must consider the changes introduced in 2018 by the Tax Cuts & Jobs Act. This podcast summarizes how those changes affect your year-end planning, along with strategies that apply every year-end. Available free.

Stockbrokers' Secrets: Year-End Planning For NQSOs, Restricted Stock, And RSUs, by John Barringer and Michael Beriss
The time for tax planning is before the year ends; tax season is too late. Learn about several ideas for year-end 2018 that apply to nonqualified stock options (NQSOs) and restricted stock/RSUs.

Stockbrokers' Secrets: Year-End Planning For ISOs, by John Barringer and Michael Beriss
Learn about year-end planning specifically for incentive stock options, including ideas related to the alternative minimum tax.

Leading Advisors Reveal Strategies For Equity Comp And Company Stock At Year-End
Year-end planning can be tricky amid the ongoing impact of tax-rate changes that took effect a few years ago and expected tax reforms in the year ahead. We asked several leading financial advisors for their ideas on financial and tax planning for the end of 2018 and the start of 2019. This article presents their responses in their own words. Available free.

Making Gifts Of Company Stock, by the myStockOptions Editorial Team
In addition to being an effective form of generosity, gifting shares can play a role in financial and tax planning for your equity compensation and company stock. This article presents the basics that you need to know when you are contemplating gifts of shares acquired from stock options, restricted stock/RSUs, or employee stock purchase plans.

Making Donations Of Company Stock, by the myStockOptions Editorial Team
Nonprofit organizations appreciate donations of shares as much as gifts of cash, and most large nonprofits are experienced in accepting stock donations. This article presents the basics that you need to know when you are contemplating charitable donations of shares acquired from stock options, restricted stock/RSUs, or employee stock purchase plans.

Six Ways Tax Reform Affects Your Stock Compensation And Financial Planning
Effective from the start of 2018, the Tax Cuts & Jobs Act includes provisions that either directly or indirectly affect stock compensation, whether in financial planning or in stock plan administration (though the core tax treatments have not changed). This article details six provisions that have an impact on the taxation of stock compensation or holdings of company shares and may affect your year-end planning. Available free.

Return to table of contents

Insider Trading Prevention And Education:
Think Twice Video And Intranet Series
Request free previews at the Think Twice website

Insider-trading prosecutions are a major priority of the SEC and the Justice Department. For two decades, the dramatic Think Twice video series has been a vital training and compliance resource for thousands of corporations and law firms trying to prevent insider-trading violations. The Think Twice videos are celebrated for enhancing the value of corporate education by entertaining viewers with compelling stories.

Used by over 1,000 companies and developed with input from the SEC Enforcement Division, these powerful and memorable story-lines will drive home key points on:

  • what insider trading is
  • the penalties and consequences
  • how the SEC discovers illegal activity
  • what happens if illegal tipping or trading is suspected
  • how SEC investigations are conducted

For more information on the Think Twice video series, and a free white paper on insider trading prevention and education, see the Think Twice website. Both DVD and VHS formats are available. Qualified corporate buyers, including new IPO companies, can request free previews. Intranet licensing is available.

Return to table of contents

Looking ahead to tax-return season: major changes in tax-return reporting

Ready or not, tax-return reporting has significantly changed for the 2019 tax-return season. The IRS Form 1040 tax return has been overhauled. New schedules (supplementary forms) have been added that affect the reporting of capital gains and the alternative minimum tax (AMT).

According to the current draft forms, the IRS is condensing Form 1040 from 79 lines to just 23 lines and has created an additional six new schedules that funnel information to Form 1040. That is where you now first enter many of the numbers you previously reported on Form 1040. For example, capital gains and losses will now go from Schedule D to Schedule 1. Also, the AMT, a concern for anyone with incentive stock options (ISOs), is no longer directly reported on Form 1040 from the calculation on Form 6251. It instead goes on the new Schedule 2.

For details on these and other new tax-season developments to be aware of, see our article and FAQ on what's new for tax-return season.

Return to table of contents

myStockOptions featured at and other major media outlets

We are thrilled to announce that our editor-in-chief Bruce Brumberg now has a blog at, a notable acknowledgment of our leading expertise in stock compensation and related topics. The blog is yet another successful foray in our mission of "making complex legal and tax concepts understandable to people who do not enjoy reading the securities laws or the Internal Revenue Code." In addition, the San Francisco Chronicle recently sought the expertise of for an article about the potential for stock compensation being granted to "gig" workers at Uber and Airbnb.

In the stock plan niche, recently received coverage (about our year-end-planning content) in the widely read publications PLANADVISER and PLANSPONSOR.

Return to table of contents

AdvisorFind Directory
Find a financial, tax, or legal advisor with experience in stock compensation

Stock compensation raises many questions.

  • How much should you contribute to your ESPP?
  • When should you exercise stock options?
  • Should you sell or hold restricted stock at vesting?
  • How can you diversify your company stock holdings?
  • How can you minimize your tax bill?
  • How do you negotiate for stock compensation in your employment agreement?

While is a good place to learn about concepts, issues, and general strategies in equity compensation, at some point you may need an advisor to help with your unique situation. Yet finding a good advisor can be hard when you are busy and don't know where to start. The AdvisorFind Directory from is for you.

  • Identify and contact an expert who can provide specialized professional guidance on equity compensation.
  • Search for advisors by geographical area, type of advisor, years of experience, minimum portfolio size, and other key criteria.
  • Look up resources for performing background checks on advisors.

Searching AdvisorFind is free and does not require registration at

Need CE credits before year-end? Learning Centers at and offer credits for CEPs, CFPs, and other professionals

The Learning Center has courses of study and exams that offer:

  • 30 continuing-education credits for Certified Equity Professionals (100% of the total requirement!)

  • 15 continuing-education credits for Certified Financial Planners

  • 15 continuing-education credits for CPWAs and CIMAs (37.5% of the total requirement)

  • CPE for Certified Public Accountants (CPAs) and CE for CFA Charterholders (see the Learning Center for information)

Each course of study features podcasts, articles, and FAQs from They are woven into a dynamic, interactive learning tool that teaches the topics in a memorable way. The answer key for each exam also links to relevant content on the site for further reading and learning.

Six Self-Study Courses

The six courses offered through the myStockOptions Learning Center focus on nonqualified stock options, incentive stock options, ESPPs, restricted stock/RSUs, SEC law for stock compensation, and financial planning with equity awards. Built on a similar model, the the Learning Center on nonqualified deferred compensation offers up to 6 continuing-education credits for Certified Financial Planners, 6 Professional Achievement in Continuing Education (PACE) credit hours for CLU® and ChFC® certifications, and up to 12 CPE hours for credentialed ASPPA members.

Return to table of contents

myStockOptions 2019 financial-planning conference: save the date!

Our annual national conference, Financial Planning for Public Company Executives & Directors, will be held on June 18, 2019. The venue of the 2019 event is the Hilton San Francisco Airport Bayfront. This is a very good location both for advisors in the San Fran/Silicon Valley area and for those flying in from all over the USA.

Our conference is for financial advisors working with executives, directors, and high-net-worth employees at public and private companies, as well as others interested in these topics. The 2018 event was a big success, as our blog reported earlier this year.

Contact us ( to be notified when registration starts at the early-bird discount rate.

Return to table of contents

Subscription And Licensing Information

If you found this update from useful, please share it with your friends and colleagues, but do not copy or customize the text itself for your company's use without express permission.

TO SUBSCRIBE: Visit and register as a new user. Be sure to check the box for our email newsletters.


Return to table of contents