Employee stock purchase plans are when your employer has offered you the opportunity to buy stock in the company that you work for. Not only are you potentially going to earn a profit but you get to purchase these stocks at a discounted price because you are an employee. Employee stock purchase plans and your taxes affects your taxes when you decide to sell your stocks.
There is not much that you will have to do after you decide to purchase the stocks. Most of the work is done by the employer. That is until you decide to sell your stocks. Then you must begin to think about taxes.
When Purchasing Stocks - You will not have to pay taxes on employee stocks at this time.
When Selling Stocks - Now is the time to pay the tax on the stock purchased.
If you have decided to sell your stocks you must take in to consideration that you will have to pay tax on the full price of the stock and not the discounted price that you initially paid. As well as any capital gains earned on the stock. The final sale price of your stock is going to be the market price on the day of the transaction. Multiply that by how many shares you sold and then you may also deduct any commissions paid for selling the stock. That will be your total gains.
There are many factors that can change this amount. How long have you had the stock? How much profit did you make? What was the grant date? This can seem like an overwhelming task when it comes time to figure out how much you will owe for the stocks that you have sold.
Please visit TurboTax Online to help you figure out the amount that you must pay on sold stocks for the previous year. Turbo Tax Online is your online source for questions regarding employee stock purchase plans and your taxes.