Tax errors can be costly! Don't draw unwanted attention from the IRS. Our Tax Center explains and illustrates the tax rules for sales of company stock, W-2s, withholding, estimated taxes, AMT, and more.
Video included! Incentive stock options (ISOs) are potentially quite valuable. However, they are more rule-bound, complex, and risky than nonqualified stock options (NQSOs). In fact, mistakes with ISOs can be quite costly. This article presents five key aspects of ISOs that you must know at the time of grant, before you exercise the options, and when you sell the shares.
To make the most of incentive stock options (ISOs), you must understand their tax fundamentals, explained by the editor-in-chief of myStockOptions.com in this engaging video.
Incentive stock option (ISO) exercises made during a calendar year must be reported by the company to you and the IRS on Form 3921 by January 31 of the following year. This article explains what you need to know about the information on the form, and how the form can help you better understand the complexities of ISO taxation.
Video included! Learn how and when income from ISOs is subject to taxes, including the alternative minimum tax. You must consider taxes at both exercise and sale to put together an optimal strategy.
Podcast included! Moving between US states, whether to relocate permanently, travel for business, or retire, can involve tax complications for people who have stock compensation. This article presents the tax issues that you may encounter when you leave your home office and cross a state line.
The final rules clarify and consolidate a tangle of proposed, temporary, and final regulations, as well as other guidance, that governed the taxation of ISOs, including rules for disqualifying dispositions.
The final rules clarify and consolidate a tangle of proposed, temporary, and final regulations, as well as other guidance, that governed the taxation of ISOs, including rules for the $100,000 ISO limit.
The final IRS regulations on ISOs, last modified in 2004, clarified points that are of greater concern to ISO-granting companies than to individual optionholders and advisors (they did not affect the basic tax structure or the AMT treatment). However, for the purposes of ISO-related financial planning, the rules do clarify certain advanced topics, such as the wash sale rule, stock swaps, transfers to trusts, and transfers in divorce, and they confirm current interpretations and practices. A detailed discussion about the background of the final ISO regulations occurs in the text of the proposed regulations.
With incentive stock options (ISOs), when you hold the shares for more than one year from exercise and two years from grant, the entire gain at sale over the exercise price is...
First: Remember that the sale of ISO stock will raise AMT implications (alternative minimum tax). Second: The matter depends on how long you hold the stock...
Your company is required to file Form 3921 with the IRS and either give you a copy or present the same information on a substitute document by January 31 of the year following the tax year. With this reporting, the IRS now knows more information about your ISO exercises than it did before, particularly with regard to...
Companies make some information available voluntarily, while the reporting of other information is mandatory. Section 6039(a) of the Internal Revenue Code requires companies to send an information statement to employees who have exercised incentive stock options or have made purchases in a tax-qualified Section 423 employee stock purchase plan. ISO exercises are reported on IRS Form 3921. ESPP purchases are reported on IRS Form 3922...
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...
The Tax Cuts & Jobs Act (TCJA), which took effect in 2018, included significant changes to the calculation of the alternative minimum tax (AMT) that result in...
Running parallel to the regular tax system, the alternative minimum tax (AMT) was designed to require extremely wealthy people to pay their fair share of taxes when credits and deductions could otherwise reduce or eliminate their tax liabilities. However, the reach of the AMT has expanded over time to hit middle-income people it was never intended to tax...
It is possible to be subject to the alternative minimum tax if you exercise and hold incentive stock options with a big spread. This FAQ calculates the income thresholds where the AMT can be triggered...
The United States taxes the worldwide income of all US citizens, regardless of where they live. This means that when you live abroad you must file a US tax return that includes your worldwide income. In addition, the foreign country where you live may also tax your income. But the US has tax treaties with certain nations to help taxpayers avoid double taxation...
Reporting Stock Sales 2023 UPDATES!
Tax errors can be costly! Don't draw unwanted attention from the IRS. Our Tax Center explains and illustrates the tax rules for sales of company stock, W-2s, withholding, estimated taxes, AMT, and more.
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