Surprise! (Or maybe not.) The federal tax-return reporting for stock compensation and company shares is complicated. For taxpayers who had income from stock compensation and/or company shares in 2022, this article presents key aspects of the Form 1040 tax return, its associated schedules and forms, and more details on changes for the 2023 tax season.
Video included! The stock-sale information provided by brokers on IRS Form 1099-B has changed. Cost-basis reporting, both for your broker on Form 1099-B and for you on your tax return, is now more complex, confusing, and vulnerable to errors. This article explains the crucial facts you must know to avoid overpaying tax or attracting unwanted IRS attention.
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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.
The Tax Cuts & Jobs Act has provisions that affect stock compensation, whether in financial planning or in stock plan administration. This article details six with an impact on the taxation of stock compensation or holdings of company shares.
While in 2018 the Tax Cuts & Jobs Act superseded many prior tax provisions, other tax provisions introduced in previous legislation (such as the Affordable Care Act, i.e. Obamacare) remain in place. Income thresholds for the tax brackets trigger higher tax rates, so it is wise to monitor the tax impact of income-generating events stemming from stock compensation. This article suggests strategies for minimizing their impact.
Shares in privately held companies lack liquidity and thus cannot be sold, creating difficulty when taxes are owed on income recognized from stock option exercise and RSU vesting. To address this problem, the Tax Cuts & Jobs Act introduced an income-deferral opportunity for certain types of stock compensation at private companies. These "qualified equity grants" are now provided by the Section 83(i) of the tax code.
Learn the rules for reporting stock sales on your tax return, along with costly errors to avoid if the shares you sold came from stock options, restricted stock/RSUs, stock appreciation rights, or an employee stock purchase plan. Among other issues, you must understand your "cost basis" to avoid overpaying your taxes. Running time: 8:05.
Notable shifts in tax rates occurred in 2013 for people with high incomes. Part 1 surveys these important tax changes and considers their ongoing impact on planning. Even after the changes made by the Tax Cuts & Jobs Act in 2018, many of the rates, income thresholds, and planning ideas covered in this article still apply.
Part 2 of this article series looks at planning strategies involving capital gains rates, the AMT, and ISOs, and considers general ideas related to income-shifting.
This extensive IRS guide covers many topics related to reporting income and expenses from investments, including dividends (Chapter 1), capital gains (Chapter 4), and interest on loans (Chapter 3).
The IRS tips its hand on what its agents look for in audits related to all types of stock pay to ensure compliance, whether by corporations or executives.