What You Need to Know About Employee Stock Options

Employee stock options are a powerful tool for businesses to provide an incentive for key employees and those who contribute to a company’s success. Stock options give you the right to purchase shares of stock at a predetermined price within a certain period of time through a vehicle called a stock option grant.     If...

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...

There is no easy way around it, employee stock options are complicated. And depending on the type of stock options you have, how many you have, other types of employee stock options you own — along with all your other specific financial planning needs — understanding what to do with your employee stock options can...

Access to employee stock options represents an agreement between you and your employer that allows you to purchase a specified number of shares of the company’s stock at a fixed grant price for a specified period. If the future stock price appreciates above the stated grant price (the price at which you can purchase the...

The decision to exercise your employee stock options can be a difficult one, regardless of whether you have incentive stock options or non-qualified stock options. You have to consider potential tax implications, whether or not you have the necessary cash flow to execute a chosen strategy, and of course, deal with the fear of making...

When it’s time to exercise your employee stock options, you generally have one of two options to consider: you can do either a cash exercise, or a cashless exercise. The right choice for your situation will depend on a number of factors specific to your finances, your goals, and your needs and challenges to address....

When the time comes to exercise your non-qualified stock options, you may find yourself asking about the process, the cost, and how it actually happens. This may lead you to ask whether to do a cash exercise or a cashless exercise. Many people default into a cashless exercise for a few reasons. For one, a...

The income tax rules for an exercise of non-qualified stock options are relatively straightforward. You generally do not owe taxes when you are granted non-qualified stock options. You don’t owe when your non-qualified stock options vest, either. This no-tax timeframe allows you to defer income tax while potentially creating considerable wealth if the value of...

Non-qualified stock options are unique in that they retain tax characteristics similar to restricted stock and employee control similar to incentive stock. One might say that they fall right in the middle of these two. From a tax standpoint, gains are subject to ordinary income tax rates.  In terms of control, employees have the ability...

Non-qualified stock options (NSOs) are commonly issued to allow employees to participate in the upside potential of a company. While they can offer the potential to amass wealth, they’re also usually part of compensation packages referred to as “golden handcuffs.” Golden handcuffs keep you working for a company in exchange for possibly cashing in on...