myStockOptions Updates: Year-End Planning 2016 (Oct. 19, 2016)
This alert presents some noteworthy additions and updates in the award-winning content of myStockOptions. Click here to see a full list of recent additions and updates.
Year-End Financial And Tax Planning 2016
Now is the time to start thinking about year-end planning. While the potential for changes in tax law under a new president creates some long-term planning uncertainty, in the short term it is important to remain aware of the thresholds for annual income that trigger higher tax rates. Good points of entry into our year-end content, which has been almost fully updated for 2016, include the following key articles and FAQs:
- Top Ideas For Year-End Tax Planning With Stock Compensation (Parts 1 and 2)
- Year-End Strategies For Restricted Stock, RSUs, And Performance Shares: Seven Ideas To Consider
- Year-End Strategies For Employee Stock Purchase Plans: Ideas To Consider
- What are some year-end strategies for restricted stock, RSUs, and stock options?
Restricted Stock Grants: IRS Finalizes Change In Tax-Filing Rule
The IRS has officially made it easier for employees to elect to pay taxes on restricted stock at grant instead of at vesting, the standard taxable moment. This choice, called a Section 83(b) election, carries both advantages and risks (it is not available for restricted stock units). While to make the 83(b) election you still must file it at the local IRS office within 30 days of the grant date, under final IRS rules issued in July you no longer need to attach the election to your tax return. For details, see our blog commentary on this topic.
Donations And Gifts Of Company Stock: New Article Discusses Planning Considerations
Gifting and/or donating shares can play a role in financial and tax planning for your equity compensation and company stock. A new article at myStockOptions, Making Gifts And Donations Of Company Stock, presents what you need to know when you are contemplating gifts or charitable donations of shares acquired from stock options, restricted stock/RSUs, or employee stock purchase plans.
Disability And Death: New Article Explains The Treatment Of Your Equity Awards
Every stock plan has provisions on the treatment of equity compensation in the case of disability or death. You and your family members should understand those plan features just in case they come into play. A new article at myStockOptions, Disability And Death: What Happens To Stock Options, Restricted Stock/RSUs, And ESPP Participation?, presents the most common ways in which stock plans treat grants upon the disability or death of employees.
Two New "Top 10" FAQs Cover Job Termination And Retirement Planning
We love "top 10" lists, as shown by our series of FAQs presenting the 10 most important questions to ask about equity awards in general, restricted stock/RSUs, performance shares, ESPPs, stock options, tax returns involving equity comp, and grants at pre-IPO companies. We recently expanded this series with two new FAQs:
- Leaving your job? To protect your outstanding grants and prevent problems, know the answers to the 10 crucial questions presented in our new FAQ on job termination.
- Planning for retirement? When factoring stock options, restricted stock/RSUs, or ESPPs into your planning, know the answers to the 10 important questions set forth in our new FAQ on retirement planning.
As in our other "top 10" FAQs, the new content has links to related articles and FAQs for further reading.
Tax Change For Stock Options In Pre-IPO Companies Passes House
The Empowering Employees Through Stock Ownership Act (HR 5719) was approved by the House of Representatives on Sept. 22, 2016, by a vote of 287 to 124. It has since moved to the Senate for consideration. The bill seeks to give employees in privately held companies extra time to pay taxes on the income they recognize at exercise. Instead of paying taxes at exercise with nonqualified options (or at RSU vesting when settled in stock), the proposed law would allow tax deferral for up to seven years. For details, see the blog commentary that we wrote about the bill when it was introduced in Congress.