Equity 101 Part 3: How stock options are taxed
We explore what it means to exercise stock options, the taxes you may need to pay, and the common times people exercise their options.
Explore by topic
Categories
subscribe
Stay up to date with monthly blog highlights
Share on linkedin
Share on twitter
Share on facebook
Share on email
Category: Employee resource center
How to value your equity offer (free startup equity calculator)
Learn how to evaluate the equity portion of your job offer and download our free equity calculator to see what your options could be worth.
What are employee stock options?
Stock options aren’t actual shares—they’re the opportunity to exercise (purchase) a certain amount of company shares at an agreed-upon price. Learn more.
What happens to equity when a company is acquired?
If you’re at a company that has potential to be acquired, learn how an acquisistion could affect your equity.
What does exercising stock options mean?
Exercising stock options means purchasing shares of the issuer’s common stock at the set price defined in your option grant.
What is alternative minimum tax (AMT)?
The alternative minimum tax (AMT) is a different way of calculating your tax obligation. Learn if you’re more prone to paying it, how to calculate it, how you may be able to minimize it, and more.
What is vesting?
To encourage employees to stay with a company longer, employees have to earn the right to purchase their shares over time. This is called vesting.
What are restricted stock units (RSUs)?
An RSU is a promise from your employer to give you shares of the company’s stock (or the cash equivalent) on a future date if certain restrictions are met. Learn more about this type of restricted stock.
What are incentive stock options (ISOs)?
ISOs are a type of stock option that qualifies for special tax treatment. Unlike other types of options, you usually don’t have to pay taxes when you exercise (buy) ISOs. Plus, you may be able to pay a lower tax rate if you meet certain requirements. Here’s what you need to know.
