If you have non-qualified stock options, you’ve likely spent time researching when and how you’ll face taxes for them. As a general rule, you will be subject to ordinary income ...
If you have non-qualified stock options, you’ve likely spent time researching when and how you’ll face taxes for them. As a general rule, you will be subject to ordinary income tax on the profit you make when you exercise non-qualified options. Being taxed when you exercise non-qualified stock options, or NQSOs, is attractive for a few reasons. For one, you control when your options become taxable. You may also enjoy more clarity as to what options are being exercised and what the value of those options will be. This means you can better estimate the tax impact you’ll face when you exercise (which is helpful for planning purposes). Another benefit to non-qualified stock options is the ability to sell exercised shares immediately via a cashless exercise. If you go this route, you turn the value of the stock options into actual cash you can use. Finally, you also have the potential to use an 83(b) election with NQSOs. Here’s what you need to know about this option and why you might want to consider it. Understanding 83(b) Elections for Non-Qualified Stock Options The first thing you’ll want to do is confirm whether or not you have the ability to do… Read More »
