Tax Center

Tax Center

Featured in PLANSPONSOR, Accounting Today, and CPA Practice Advisor, the myStockOptions Tax Center explains the tax withholding, reporting, and filing for stock options, restricted stock/RSUs, performance shares, ESPPs, and SARs.

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Selected Articles

Tax Changes

Tax Season 2022: What You Must Know About New Reporting Rules

Surprise! (Or maybe not.) Federal tax-return reporting has changed yet again for the 2022 tax season. For taxpayers who had income from stock compensation and/or company shares in 2021, this article presents key aspects of the Form 1040 tax return, its associated schedules and forms, and more details on changes for the 2022 tax season.
NQSO Tax Returns

12 Tax-Return Mistakes To Avoid With Stock Options And ESPPs This is premium content

Tax returns involving income from stock options or employee stock purchase plans (ESPPs) can be confusing. Recent changes in IRS reporting rules haven't helped. This article explains errors and nasty surprises to avoid.
Restricted Stock Tax Returns

Restricted Stock & RSUs: 10 Mistakes To Avoid On Your Tax Return This is premium content

Restricted stock, restricted stock units (RSUs), and performance shares bring their own very special issues to tax returns. The potential for mistakes has been increased by recent IRS changes in reporting rules. This article presents tips for sidestepping tricky common pitfalls that can even fool professional tax-return preparers.
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ESPP Basics

VIDEO! Employee Stock Purchase Plans (ESPPs): Taxes

To maximize the benefits of your employee stock purchase plan (ESPP), you must understand the five key tax rules explained in this video. Illustrated by animated examples, the covered concepts include the special rules that depend on how long you hold the shares. Running time: 4:24
ESPP Basics

ESPPs 101: Taxation Made Simple (Part 1)

Video included! Your employee stock purchase plan may be one of the best benefits offered by your company. However, to appreciate the advantages of enrolling in the ESPP you must understand the tax consequences of participation. This article series explains the tax basics.
Tax Changes

UPDATES! 4 Ways Biden's Tax Proposals Could Affect Stock Comp Financial Planning

Could President Biden's proposed tax changes impact the piggy banks of employees with stock comp and company shares? Yes, depending on income. Some of the proposed tax hikes, such as an increase in the top capital gains rate, may require you to adjust your financial and tax planning ahead of time.
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Selected FAQs

Tax Changes

UPDATES! What's new for the 2022 tax-return season?

Ready or not, tax-return reporting has changed yet again for the 2022 tax season (income received in 2021). Meanwhile, the impact of the...
NQSO Basics

Video included! Do you have a brief overview of the tax treatment for stock options, restricted stock, RSUs, and ESPPs? This is premium content

The table in this FAQ shows the types of taxes, when they are triggered, and the tax withholding (if any) for various forms of equity compensation granted in the United States. For details, examples, and illustrations...
Restricted Stock Basics

Video included! When and how is a grant of restricted stock or RSUs taxed?

The timing of taxation is different than that of stock options. You pay tax at the time the restrictions on the stock lapse. This occurs when...
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NQSO Basics

Video included! When are nonqualified stock options taxed?

You are taxed when you exercise nonqualified stock options and thus acquire the underlying shares of your company's stock. The difference between the market price of the stock at exercise and your exercise price is...
ESPP Basics

Video included! How am I taxed if I participate in a tax-qualified (Section 423) employee stock purchase plan?

You are taxed only at sale, not when the shares are purchased. However, the rules for ESPP taxation are more confusing...
NQSO Basics

UPDATES! What happens with taxes on stock options if I live or work in different states during the period between grant and exercise? This is premium content

Generally, each state you live in determines what income is taxable and when. For administrative ease, many companies...
NQSO Basics

What are capital gain and capital loss? What are the tax rates on capital gains?

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...
NQSO Basics

How is capital gain calculated?

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...
ESPP Basics

What is an ESPP disqualifying disposition, what can cause it, and why does my company care? This is premium content

A disqualifying disposition occurs when you sell or otherwise...
ESPP Basics

How am I taxed if I participate in a nonqualified employee stock purchase plan?

"Not qualified" means that your company's employee stock purchase plan (ESPP) does not meet the requirements under Section 423 of the Internal Revenue Code. Its mechanics and procedures may be the same as a tax-qualified ESPP, but the favorable tax treatment does not...
This is simply a selection of the many FAQs in this section.
Use the navigation to the left to explore all of the categories in this section.
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