As 2017 draws to its close, the new tax-reform law is getting a lot of attention, and it will certainly affect tax rates in the future (see this blog's summary of its provisions that affect stock comp). However, don't forget the fundamentals of year-end planning. The checklist below summarizes what you need for comprehensive year-end financial and tax planning with stock compensation.
Review:
- exercises, vestings, and ESPP purchases in current year
- holdings of NQSOs, ISOs, restricted stock/RSUs, and company shares
- scheduled vestings in the year ahead, including the end of the cycle for a performance share grant and when payout occurs
- salary contributions allocated for ESPP purchases
Know:
- deadlines for option or SAR exercises and the expiration dates of option grants
- expected new grants in year ahead and ESPP enrollment/change dates
- trading windows and blackouts, company ownership guidelines, and any post-vest holding-period requirements
- your ability to spread the recognition of income from certain sources over 2017 and 2018
Consider:
- your situation, including short-term cash needs that may prompt you to sell company stock and/or exercise options
- whether your decisions should be entirely tax-driven
- your outlook for both your company's stock price and your job
- how comfortable you are with your concentration in company stock and whether you should diversify
- multi-year projections for your income and taxes
Collect:
- Company and brokerage firm statements, whether online or in print. You will need them for tax-return reporting.
For general financial-planning points to consider with stock compensation at year-end, see a related FAQ at myStockOptions.com.
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