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 […]
incentive stock options
6 Things to Consider for Your Pre-IPO Incentive Stock Options
The choice of when to exercise your incentive stock options can be a difficult one, with serious implications for financial planning and taxes. When your company is still pre-IPO, that opens up an entirely separate set of concerns that you may need to be aware of. The issues associated with […]
7 Things You Should Know About Incentive Stock Options
Incentive stock options (ISOs) are a form of compensation distributed by a company to their employees. Typically, companies use ISOs as a vehicle to retain top employees, reward specific milestones or successes or as an incentive when hiring new employees. ISOs can be a lucrative long-term compensation benefit, particularly if […]
5 Reasons Why You Might Want a Disqualifying Disposition for Your Incentive Stock Options
Want to pay less in taxes from the sale of your incentive stock options? While you can’t completely avoid taxes on a profit when you exercise and sell shares from ISOs, you can potentially earn the right to pay at long-term capital gains tax rates — which are lower than […]
What Happens to Your Employee Stock Options When You Leave Your Company?
Even if you don’t have plans to leave anytime soon, it’s not unreasonable to consider what happens to your employee stock options when no longer work for your current employer. Whether due to a planned retirement after a long career, a new opportunity at another company, or an intentional sabbatical […]
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. […]
