The season of holiday movies, festive knitwear, and Christmas trees brings also the time for year-end financial and tax planning. At myStockOptions.com, we recommend promptly learning about the issues so that your yuletide year-end planning doesn't become The Nightmare Before Christmas.
Along with the planning concepts that apply at the close of every year, in 2015 people with equity comp and company shares will want to consider the ongoing impact of the tax-rate changes that took effect in recent years under the American Taxpayer Relief Act and the Affordable Care Act. Timely year-end guidance is particularly important for people who are considering option exercises or stock sales at the end of 2015 or the start of 2016. Employees with equity grants and company shares should be aware of the thresholds for higher tax rates on compensation income and capital gains in 2015 and 2016, the additional Medicare tax on compensation income, and the Medicare surtax on investment income. They may want to consider keeping their income below those thresholds, if possible. Beyond these issues, other planning conundrums may arise for people with stock options, restricted stock, or restricted stock units, and for participants in employee stock purchase plans.
Fortunately, the year-end articles and FAQs at myStockOptions.com provide helpful education and guidance on major issues, decisions, and innovative financial-planning strategies for the end of 2015 and the start of 2016. Here is our short guide to holiday reading for people with equity compensation and company stock:
- Top Ideas For Year-End Tax Planning With Stock Compensation (Parts 1 and 2)
- Year-End Strategies For Restricted Stock, RSUs, And Performance Shares: Seven Ideas To Consider
- Year-End Strategies For Employee Stock Purchase Plans: Ideas To Consider
- Stockbrokers' Secrets: Year-End Planning For NQSOs, Restricted Stock, And RSUs
- Stockbrokers' Secrets: Year-End Planning For ISOs
- In Their Own Words: Advisors On Strategies For Equity Compensation And Company Stock At Year-End
- What are some year-end strategies for restricted stock and stock options?
- Next year I may be in a higher tax bracket. I am thinking about exercising my nonqualified stock options before then to accelerate income into this year. What issues do I need to think about?
- My income next year will trigger higher taxes, including the 3.8% Medicare surtax on capital gains. If I sell stock this year, I can avoid these taxes and then next year repurchase the stock to reset the basis. What issues should I consider?
Alongside these core year-end articles and FAQs, other FAQs in the year-end section answer advanced related questions, including:
- How can employees defer income to years when they are in a lower tax bracket?
- How do the additional Medicare taxes on high earners affect planning for stock compensation?
- How do employees harvest capital losses against capital gains from company stock holdings?
- Are there strategies for using capital-loss carry-forwards from prior years?
- What risks are posed by the wash sale rule?
- What year-end strategies can help to minimize alternative minimum tax with incentive stock options?
- How can employees save taxes on company stock by making gifts and donations, including those to private foundations or grantor-retained annuity trusts?
In addition, the calculators and modeling tools at myStockOptions.com allow users to play out various "what if" scenarios with different tax rates and stock prices.
For similar education and guidance on year-end planning for nonqualified deferred compensation, employees can turn to myNQDC.com, a separate sister publication of myStockOptions.com.
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