Stock Comp Tax Masterclass: Three-Part CE Crash Course

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Few endeavors in personal finance are more complex than understanding the taxation and tax planning for equity awards and ESPPs. While these valuable forms of compensation can make a big difference in achieving both short-term and long-term financial goals, they can be tricky not only for employees but also for their financial, tax, and legal advisors. For them, knowing the taxation of stock comp is crucial for successful work with clients, executives, and employees.

This is why we decided to launch a new webinar series focused on stock comp taxation: the three-part Stock Comp Tax Masterclass (May 1, May 21, June 18). It will offer a comprehensive and engaging crash course on taxes and tax planning for financial advisors, CPAs, Enrolled Agents, attorneys, and anyone else who counsels clients with stock compensation.

Our editor-in-chief Bruce Brumberg will present Part 1 (May 1), on the essential tax treatments of stock compensation, and Part 2 (May 21), on advanced aspects of stock comp taxation, including tax-return reporting, startup equity comp taxation, and interstate mobility.

Part 3 (June 18) will bring together all of the stock comp tax topics to cover tax planning. The webinar will feature a panel of leading financial advisors actively working with clients who have equity compensation. With Bruce Brumberg as the moderator, they will provide their top tips and real-world case studies. Panelists:

  • Travis Gatzemeier (CFP®), Founder, Kinetix Financial Planning
  • Valerie Gospodarek (CFA), Owner, VG Financial Consulting LLC
  • CJ Stermetz (CFP®, CEP), Founder, Equity For The Win

Topic to be covered by these experts include:

  • How to manage and minimize taxes with nonqualified stock options, restricted stock, and restricted stock units
  • AMT risk and opportunities with incentive stock options
  • Tax strategies for private company stock when an eventual IPO, M&A, or share-liquidity program is expected
  • How to use your equity comp tax knowledge to demonstrate your value to clients and prospects
  • How to get and collect key tax information and forms from clients and organize it
  • How financial advisors can work together most effectively with CPAs or Enrolled Agents for clients
  • Case studies involving various strategies: option exercises (NQSOs and ISOs); public company RSUs; tax-loss harvesting; private company transition to public

Viewers can watch the webinars live and/or on demand. Series completion includes a certificate showing that attendees are "myStockOptions Educated" on the taxation and tax planning for equity compensation.

Masterclass Webinar Details

You can register for the whole masterclass series of three webinars (including certificate) at a special package price or for any of the individual webinars, listed below:

Stock Comp Tax Masterclass (Part 1): The Essentials
May 1, 2:00pm to 3:15pm ET, 11:00am to 12:15pm PT
1.5 CE credits for CFP, CPE (live only), CPWA/CIMA, CEP/ECA, CFA
1.0 CE credit for EA (live only)

Stock Comp Tax Masterclass (Part 2): Advanced
May 21, 2:00pm to 3:15pm ET, 11:00am to 12:15pm PT
1.5 CE credits for CFP, CPE (live only), CPWA/CIMA, CEP/ECA, CFA
1.0 CE credit for EA (live only)

Stock Comp Tax Masterclass (Part 3): Elite Tax Strategies From Top Advisors
June 18, 2:00pm to 3:40pm ET, 11:00am to 12:40pm PT
2.0 CE credits for CFP, CPE (live only), EA (live only), CPWA/CIMA, CEP/ECA, CFA


Tax Season 2025: myStockOptions Helps Take The Stress Out Of Filing

Tax-season angst

The tax reporting for income received in 2024 via equity comp or stock sales can be complex, given the year's uneven stock markets and economic uncertainty. Moreover, changes at the IRS under the second White House administration of President Donald Trump could impact the IRS in unpredictable ways.

Mistakes can lead to overpaid tax, underreported income, IRS penalties, or even an IRS audit. The last thing you want is to pay too much tax or incur penalties that take yet more money out of your pocket.

As in every tax season over the past 20+ years, the fully updated myStockOptions Tax Center is here to help. Our resources provide expert yet easily understandable guidance on tax returns that involve stock options, restricted stock, restricted stock units, performance shares, stock appreciation rights, employee stock purchase plans, and sales of company stock. In addition to updates for 2025, the website's content includes new videos and infographics.

Tax Center Resources

  • Core articles and FAQs spell out the core rules and most common mistakes people make with stock grants on their tax returns. Taxpayers, financial advisors, CPAs, and Enrolled Agents can quickly run through these to be sure they submit error-free returns.
  • The reporting of stock sales is made clear by special FAQs with annotated how-to diagrams of IRS Form 8949 and Schedule D.
  • Diagrams of Form W-2, Form 3922 (for employee stock purchase plans), and Form 3921 (for incentive stock options) illustrate how companies report equity compensation income to employees.
  • Infographics illustrate the process of tax reporting on key IRS forms.
  • A fun interactive quiz on tax-return topics lets you test your reporting knowledge in a painless way, before you file your return, and links to related content from the answer key.
  • Brief videos include a guide to avoiding costly tax-return mistakes that can lead to the overpayment of taxes. A new video at the myStockOptions YouTube Channel, embedded into Tax Center content, goes over the top 5 things to know before you report stock sales on your tax return.
  • Engaging podcasts convey tips for tax returns.

Special Webinar Available To Stream On Demand

On February 12, myStockOptions.com held a special webinar on tax returns involving equity compensation and stock sales: Tax Returns With Equity Comp & Stock Sales: Prevent Mistakes & Avoid Overpaying Taxes. Now available for immediate streaming on demand, the webinar features three tax experts (two CPAs and an Enrolled Agent):

  • Stephanie Bucko, CPA, CFA®, Mana Financial Life Design
  • Dan Hodgin, CPA, Silicon Valley Tax Group
  • Daniel Zajac, CFP®, EA, Zajac Group
  • moderator: Bruce Brumberg, JD, editor-in-chief of myStockOptions

The panelists provide practical insights on mistakes to avoid that can lead to major tax overpayments or IRS trouble. They also discuss their takes on the future of the IRS under President Trump. In addition, they present real-world case studies, including one showing how to use information in tax returns to create better financial plans.

The on-demand webinar offers 2.0 CE credits for CFP, CPWA/CIMA, and CEP/ECA (the live event also provided CE for CPAs and Enrolled Agents). A detailed agenda is available at the webinar registration page.


Leading Advisors On Year-Start Planning For Stock Options, RSUs, ESPPs

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Financial and tax advisors routinely use the year-start period to get their clients to consider what’s next for their stock comp and holdings of company shares. Decision-making moments come at you fast when you have stock options, restricted stock units, an employee stock purchase plan, or other forms of company equity comp. This article presents what some leading advisors tell their clients.

Thinking Ahead: Questions To Ask

John Barringer, the managing partner of Executive Wealth Planning in Denver, explains that in his approach to clients, the early-year window is “a mirror of the end of the year—same basic questions as we had then.” One of those questions he asks his clients at year-start concerns the prospects for new equity awards. “What grants do you expect?”

John furthermore emphasizes the importance of knowing—and giving your financial advisor—a complete picture of your equity comp and company shares. “I’m surprised how many times clients will go into the brokerage website and click and sell something without telling us what they’re doing.”

He adds that you also want to be aware of stock option grants that are scheduled to expire this year, along with what would happen to stock options and RSUs should you lose your job. If you think you may take a new job at a different company, answers to key questions will help you negotiate severance or a new compensation package.

“What option grants will expire soon or could expire if you’re laid off?” John asks his clients. “What grants do you expect to receive in the first quarter or first half of the year? What RSUs vest in the coming year?”

Job Changes Ahead?

Clients’ job situations and career goals are a routine year-start focus for Rebecca Conner, the founder of SeedSafe Financial LLC, based in Austin, Texas. Any moves in the year ahead could affect income and the need to exercise options sooner than anticipated, depending on the company’s post-termination exercise deadline. “Review job expectations. If you’re making a move this year, consider your total expected income and the impact of any stock options that you may need to exercise when you leave your current job for a new one.”

Tax Planning For Withholding

“Prepare for estimated taxes for RSU under-withholding,” advises John Owens, Managing Partner at Brooklyn FI in New York. One of the tasks he likes to do with clients as part of year-start planning is to get ahead of the game and map out the estimated payment for at least the first quarter.

Why? The federal flat withholding rate at restricted stock/RSU vesting for most employees may not cover all of the taxes you owe to the IRS, depending on your tax bracket. The flat withholding rate that most companies use for employees’ supplemental wage income is 22% (it is 37% for yearly total amounts in excess of $1 million). One way to remedy a meaningful tax shortfall is to pay quarterly estimated taxes.

ESPPs

John Owens also points out that year-start is a great time to enroll in, or review your salary contributions to, an company employee stock purchase plan. He is an ESPP fan, especially if the plan has “a good lookback provision for calculating the purchase price.” An ESPP with a discounted purchase price and a lookback can be a good deal, even if the stock price declines after enrollment.

Tax Returns

Tax season is another year-start client focus for Rebecca Conner. “Early in the year, we’ll be getting ready for tax returns, so we’re looking for forms. We’re making sure we know where things are or when things are due. We’re re-checking cash to be sure we have enough for taxes as well as all of our strategies.”

Special Issues For Incentive Stock Options

Special issues arise with incentive stock options and the alternative minimum tax. You can trigger the AMT when you exercise ISOs and then hold the shares beyond the calendar year of exercise, though this is less likely under the TCJA than it used to be. Many experts say that the first quarter of the year is the best time to exercise ISOs, given the ISO tax treatment.

Here’s why. With ISOs, when you sell the shares after holding them for more than one year from exercise and two years from grant, your entire gain over the exercise price is capital gain (no ordinary income). This a called a qualifying disposition.

However, when you hold the shares beyond the calendar year of exercise, the spread at exercise becomes part of your AMT income calculation, not your regular income tax, for that year. As you pay the higher of either your AMT or your regular income tax, an ISO exercise followed by holding the shares through the calendar year of exercise can result in paying the AMT on paper gains recognized at exercise — even if the stock price has since fallen.

Therefore, one core strategy for ISOs is to exercise the options early in the year and then re-evaluate the stock price in late December. If the stock price has fallen since exercise, you can sell before year-end and eliminate the AMT on your paper profits from the exercise spread. This is sometimes called an “escape hatch” strategy.

That is why John Owens emphasizes with his clients the importance of year-start planning for ISOs. “I love an early-year ISO exercise,” he enthuses. “Early in the year, we’re talking with clients about whether to do ISO exercises and holds.”

Exercising ISOs early in the year gives you the rest of the year to see where the stock price goes, he explains. This allows plenty of time to make decisions about whether to sell the shares or whether to hold them beyond year-end. If you owe the AMT because of the ISO shares that you hold, you can sell some of the ISO shares the following year at your long-term capital gains tax rate to pay the AMT. For startup companies, with 409A stock-price valuations staying flat or declining, John also suggests this as an early-year strategy to consider, though it brings additional risks and a lack of liquidity in the shares that you acquire.

Rebecca Conner also advises ISO exercises early in the year. She particularly favors doing so when the stock price is depressed and/or when the company’s outlook is positive. “Then if something happens during the year you can always sell the stock if you need to and disqualify it.

Year-End Strategies

For planning actions to take at the end of the year, see the year-end section at myStockOptions. Many of the advisor recommendations presented in it remain relevant every year.

SPECIAL WEBINAR

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Tax Returns With Equity Comp & Stock Sales: Prevent Mistakes & Avoid Overpaying Taxes

February 12, 2025
2:00pm to 3:40pm ET, 11:00am to 12:40pm PT
Agenda and panelist details available at the webinar registration page
Can't make the live webinar? Watch on demand!

With actionable takeaways and peer-led insights, our webinar on tax-return topics for stock comp will sharpen your knowledge of the reporting for stock options, restricted stock/RSUs, ESPPs, and sales of company shares. Plus, get special insights from the IRS, and learn from presenter case studies how to use tax-return info to create better financial plans. 2.0 CE credits for CFP, CPE (live webinar only), EA (live webinar only), CPWA/CIMA, CEP/ECA

REGISTER NOW

"The knowledge I gained from myStockOptions both as a premium member and from your webinars has made me stand out at work."
—Vincent Leonardo (EA), Tax Analyst, Intuit