Financial Advisor Insights

How Incentive Stock Options are Taxed

If you have incentive stock options (ISOs) it is important to understand how your equity compensation will be taxed. Holding ISOs through the end of the calendar year in which you exercised the options can often trigger the alternative minimum tax (AMT). Further, your employer is not required to withhold any amount at exercise or sale to cover your potential income tax liability. If you have ISOs, it is important to work with your financial and tax advisor to develop a plan for your stock options. Managing equity compensation requires proper planning to avoid unwanted surprises.

To learn more about how Darrow can help you manage your stock options or equity-based compensation, schedule a consultation with an advisor today. 

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