Incentive stock options (ISOs) are a type of stock option. If holding periods are met, incentive stock options qualify for favorable long-term capital gains tax treatment. But there are risks. Learn more about financial and tax planning considerations for ISOs, such as exercising options, tax planning strategies, Section 1202, considerations during a lock-up, and what to do with the proceeds. The blog also discusses liquidity events such as IPOs, mergers, or acquisitions and what happens to stock if you’re laid off or leave the company. Key insights for founders and executives on strategic stock option planning and strategies to best manage sudden wealth.
Updated for 2025 and 2026. If you have incentive stock options, you’ve probably heard of the alternative minimum tax (AMT). Essentially, the alternative minimum tax is a prepayment of taxes. In years when not subject to the AMT, you can receive an AMT credit. The credit reduces your tax liability
For individuals with stock-based compensation, an 83(b) election has the potential to greatly reduce taxes on stock options or restricted stock. When you purchase unvested stock compensation and make the election, you recognize the taxable gain now (if any), instead of when the shares vest. What is an 83(b) election?
What happens to employee stock options or equity compensation if you leave the company? Before giving notice, understand how vested and unvested stock options and restricted stock units are treated if you quit, retire, or leave the company for other reasons. In brief, here’s what usually happens to stock options
If you work for a private startup, you may be able to exercise your stock options early. Early exercisable stock options means you can exercise your option to buy the stock before the vesting date. When should you exercise an option early? In the right situations, early exercising stock options
Tax implications of exercising and selling stock options If you have stock options as a large part of your income, taxes are especially important. There are two types of stock options: incentive stock options and non-qualified stock options. How stock options are taxed depends on the type of options you
Whether you work for a private company about to IPO or one that’s recently gone public, you may wonder what that means for employees and their stock options. Financially, what an IPO means for current and former employees mostly depends on when you were hired. For early-stage employees and founders
6 tax strategies for incentive stock options and AMT in 2025 and 2026 Triggering the alternative minimum tax isn’t the end of the world, but you don’t want to do it by accident. Here are six tax planning strategies to consider when exercising and selling ISOs in 2025: Exercise early
Losing your job is stressful. If you’ve been laid off, you may be wondering what will happen to your stock options or restricted stock units. It will depend on some specific details about your company, grant agreement, and the type of stock options or awards you have. Here’s what you
What’s your post-IPO stock liquidation strategy? Working for a company as it goes public can be a very exciting and rewarding experience. If you have company stock, an IPO means there will soon be a public market for your shares. IPOs make it much easier to sell stock options after
Stock options or awards can be quite complex. But it’s important to understand how stock options work, especially if it’s a big part of your compensation. The goal of this article is to provide employees with a complete primer to their stock options. Employer stock may be a significant part