I'd like to know how to roughly calculate tax company stock options, for the following fictitious scenario:. Suppose Little Susie joined a private private stock in California as a normal employee, and Little Susie private granted some ISO company options. These stock options are not forward exercisable. However, she has strong faith that the company will do well and IPO some time in the future.
Or does she have to include stock salary on top amt that before calculating AMT? Suppose in the worst case, the company goes completely under. Does she get her massive amounts of tax back? Or if it's tax credit, where can I find more info on this?
Any advice for Little Susie on how she can even afford private pay that much tax on something she can't even sell anytime soon? Should she take out a loan? I've also heard that you can sell your illiquid shares on SecondMarket? Options scenario aside, I will options seek options services to file my taxes next year I'm guessing a CPA can do this?
All her income is included in calculating the AMT, minus the AMT exemption amount. The difference between the regular calculated tax and the calculated AMT is then added to the regular tax. Note that some deductions allowed for the regular calculation are not allowed options the AMT calculation.
California has its own AMT rules, and in California any stock option exercise is subject private AMT, unless you sell the company in the same year. Here's a nice and easy to understand write up on the issue from the FTB.
Tax is due when income is received i. However, most company don't actually pay the tax then, but rather discover the huge tax liability when they prepare to submit their tax return on April 15th. To avoid that, I'd suggest trying to estimate the tax and adjust your withholding using form W4 so that by the end of the year you have enough withheld.
You asked and answered. Yes, filing 83 b election is the way to go to avoid this situation. This should be done within 30 days of the grantand submitted to the IRS, and a copy attached to the tax return of the grant year. However, if you're considering exercise - that ship amt likely sailed a long time ago.
Sign up or log in to customize your list. Stack Exchange Inbox Reputation and Badges. Questions Tags Users Badges Unanswered. Join them; it only takes a minute: Here's how amt works: Anybody can ask a question Anybody can answer The best answers are voted up and rise to the top.
I'd like to know how to roughly calculate tax for stock options, for the following fictitious scenario: How does California state tax come into play for this? When would she have to pay the taxes for this huge AMT?
Is there any way to avoid this tax? Can she file an 83b election? Dzt 1 Well, not exactlyDon't exercise the options? Sign up or log in StackExchange. Sign amt using Facebook. Sign up using Email and Password. Post as a guest Name. MathOverflow Mathematics Cross Validated stats Theoretical Computer Science Physics Stock Biology Computer Science Philosophy more 3.
Meta Stack Exchange Stack Apps Area 51 Stack Overflow Talent.