Alert: IRA Conversions, Making Work Pay Credit, FBAR Rules, Tax Season (January 20, 2010)
- new rules for information statements your company issues to you and (soon) to the IRS after ISO exercises or ESPP purchases
- changes in calculating the maximum number of shares you can purchase through your ESPP without losing tax benefits
- the end of the income limit for converting traditional IRAs to Roth IRAs, and the role stock compensation can play
- "FBAR" reporting requirements for foreign financial holdings
- potential stock grant complications with the Making Work Pay Credit
Click here to see a list of the major recent additions and revisions to our content.
Tax Center Updated & Ready For 2010
Our Tax Center details the reporting and filing rules for all types of equity compensation, including restricted stock, RSUs, and employee stock purchase plans.
- Annotated diagrams about the reporting of stock grant income on Form W-2
- The section Reporting Company Stock Sales, with annotated diagrams of Schedule D
- Clearly written articles on tricky tax topics for stock options, ESPPs, and restricted stock/RSUs
- Podcast on tax return tips and mistakes to avoid
Converting Traditional IRAs To Roth IRAs
At the start of 2010, the income limit for converting traditional IRAs to Roth IRAs was eliminated. For the role that stock compensation can play in the related planning, and a special tax provision for IRS conversions that is available only in 2010, see the related FAQ on myStockOptions.com.
Making Work Pay Credit: Adjust Your Withholding
Available in 2009 and 2010, the Making Work Pay Credit is being deployed via tax-withholding systems, so you receive the credit in higher take-home pay. However, the credit has income phaseouts that your company applies according to your salary. If you have an income spike from another source, e.g. stock grants, that makes you ineligible, you may have to pay taxes on the credit. Therefore, now is the time to adjust your withholding for any extra income from stock compensation you expect in 2010. For details on this, including the new IRS Schedule M you may have to file with your tax return, see the related FAQ on myStockOptions.com.
Beware: FBAR Requirement For Foreign Financial Holdings
Any US taxpayer with a foreign financial account is required to file IRS Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (commonly called "FBAR"). As explained on myStockOptions.com, situations that may require filing include:
Acquisition of stock by an option exercise or ESPP purchase requiring funds to be held in an account the US person controls prior to the exercise/purchase.
Restricted stock/RSU vesting that requires stock to be held in a US person's name in a foreign account for a specific number of years until transfer restrictions lapse. An account whose value exceeds $10,000 at any time during a calendar year triggers the filing requirement. For more details, including the filing deadline and potential penalties for not filing, see the FAQ on myStockOptions.com.
AdvisorFind Directory For Advisors And Stock Plan Participants
AdvisorFind from myStockOptions.com is our online directory of financial, tax, and legal advisors for employees and executives who have stock compensation.
- AdvisorFind is a great place for advisors to find new clients and referrals from other professionals.
- Stock plan participants who need to find an advisor can search the directory on a number of criteria. Searching is free and does not require registration.
- The directory gives corporate stock plan professionals a resource where they can refer plan participants who need personalized professional advice on financial planning.
Curious? Try AdvisorFind now!