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 […]
AMT
How to Use the AMT Credit Effectively in Retirement
If you have incentive stock options, you’ve likely heard of — and perhaps already paid — the alternative minimum tax. This is the tax due in the years you exercise and hold incentive stock options, or ISOs. You might also be entitled to an AMT tax credit if that’s the […]
Why Waiting to Exercise Your Incentive Stock Options May Increase The Alternative Minimum Tax
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 incentive stock option cost more, as that price is fixed, but because the cost of the alternative minimum tax (AMT) may […]
4 Taxes to Plan for When You Sell Your Incentive Stock Options
If you try and look up information to learn more about your incentive stock options, most of what you’ll find addresses what happens when you exercise your options — but doesn’t go much farther than that. You may already know that when you exercise your incentive stock options, or ISOs, […]
How and When Are Incentive Stock Options Taxable?
Incentive stock options are a form of employee compensation that allow you to participate in the appreciating value of a company stock price. Much like their non-qualified stock option cousins, incentive stock options, or ISOs, allow for the purchase of a stock at a predetermined share price. If the current […]
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 […]