How do I report equity compensation on my taxes?

How do I report equity compensation on my taxes?

Reporting equity compensation can be complex. It typically involves including it as income on your tax return. Are you dealing with stock options or restricted stock units?

I have stock options. What specific forms do I need?

For stock options, you'll usually need to report the income on Form 1040 and may also need to complete Schedule D and Form 8949 for capital gains. Did you exercise your options this year?

Yes, I exercised them last month. What should I consider for capital gains?

When you sell the stock, you'll need to report any capital gains or losses. The gain is the difference between the sale price and the exercise price. Keep track of your purchase price and sale price for accurate reporting.

Thanks! Is there anything else I should be aware of?

Yes, be mindful of the tax implications of holding the stock after exercising. Depending on how long you hold it, you may qualify for long-term capital gains rates.