Exercising Stock Options & Taxes - How Do Taxes Work With Stock Options?

Are you confused as to the question of how to dealtime.The second piece of good news is that you can
with your incentive stock options? Or are you worriedend up only paying 15% tax on the options when you
about owing a large amount of tax on options that youdo sell. This will apply if you hold on to the stocks for
have not even exercised and do not have the cash tolong enough to qualify for a long-term capital gain.So
pay for it? Well, luckily, if you manage your affairs wellthings are starting to sound a lot better on stock
and take on board some simple advice, you will beoptions taxation. By postponing the tax owed until you
able to avoid owing too much tax on your stocksell the shares, you can avoid the hardship of having a
options, and also postpone paying it until you have thetax fall due without any money coming in to pay for it.
cash to do so. In most cases, if you have a largeIt is similar to the cases in the past where people
amount of money tied up in stock options, then youreceived valuable paintings or other works of art in a
should probably get some professional advice. Thiswill, and then immediately had to sell the painting in
article is only intended to give you an idea of the stepsorder to pay the tax that was owed on the
that can be taken when tax planning with stockinheritance. Also, 15% is quite a low rate of tax and it
options.First of all, you do not have to pay any taxshould also be remembered that this is the highest rate
owed immediately, if you do exercise your stockthat can be payable on a long-term capital gain.For
options. This is the case so long as you do not sell themore information, consult a qualified financial
stock you receive. If you exercise an option to buyadvisor.Check out for articles about eminis futures
some shares, then so long as you do not sell thattrading and commodity futures trading.
stock, you do not have to pay any tax at that