If you have employee stock options, you need to determine what kind you have: incentive stock options (ISO) or non-qualified stock options (NQSO). The differences go far beyond their names. ISOs may provide tax advantages for you, assuming you meet certain requirements. For this reason, many people prefer incentive stock […]
Alternative minimum tax
What You Should Know About the Alternative Minimum Tax
The alternative minimum tax (AMT) acts as a sort of parallel tax system to the regular federal income tax system. For taxpayers, this means they need to calculate their income twice: once under the regular tax rules and a second time under AMT. After running this calculation, taxpayers then pay […]
Why Waiting to Exercise Your Incentive Stock Options May Increase The AMT
Incentive stock options are unique in that the longer you wait to exercise, the costlier it may be to exercise and hold your shares. That’s not because exercising the ISOs cost more, as that price is fixed, but because the cost of the alternative minimum tax (AMT) may be higher. […]
How to Do a Year End Exercise of Incentive Stock Options to the AMT Crossover Point
Finding the best time and best strategy to exercise incentive stock options is difficult. Competing considerations on income tax, investment planning, and financial planning make it difficult to address the best time to exercise incentive stock options (ISOs) with a blanket answer. Some strategies suggest that exercising early may be […]
4 Ways to Lower Your Alternative Minimum Tax Liability with Incentive Stock Options
When you exercise and hold incentive stock options, it’s very possible that you will be subject to the alternative minimum tax (AMT). This part of the tax code gets complex, making it difficult to understand. One way to think of the AMT is a pre-payment of income tax on exercised […]
Incentive Stock Options and The Alternative Minimum Tax
If you have incentive stock options, you’ve likely heard the term alternative minimum tax, or AMT. But what is the AMT and how is it calculated? It’s a type of income tax, but very different than what you may be used to paying. Typically, the calculation of your income total […]
