Every once in a while, local employers provide an opportunity to cash out of a company stock ownership program.

The good news is that hard work and employee loyalty are rewarded by the creation of a substantial nest egg. The bad news is that the
nest egg is burdened with a tax bill and other possible implications. If an employee stock buyback is in your future, you should act quickly to form a tax planning strategy, so that you are ahead of the curve.

Here are some opportunities that you might not have thought about:

  • Understand the effect of capital gains or ordinary income taxes on your other income
    and deductions.
  • Take advantage of the remainder of the tax year to create offsetting losses or deductions.
  • Take care to avoid tax underpayment of tax penalties.
  • Create an investment strategy that complements tax planning opportunities and obligations.
  • Understand the future role of your nest egg so that it can be invested to complement your full financial or retirement plan.

Our experience is that this kind of windfall is new to most employees and a unique planning experience in an otherwise successful career. Making well-informed and strategic decisions will be beneficial in the short and long term.

If you are concerned about your tax situation or needing to create an investment strategy, then you should consult a financial advisor that will work in your best interests.

Feel free to give us a call and take advantage of our experience to make the most of this opportunity.

Will the stock be counted as income?

How will this affect my taxes?

How can I minimize the tax implications?

What should I do with the money?