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stock options and taxes

January 19th, 2006 at 04:07 am

walked with mom for 35 min today. The wind was blowing really hard. I was looking out the window in my office and I see this bird flapping it's wings as hard as it can and staying in one place in the air and then eventually getting pushed backwards. It was very comical. Almost like a cartoon.

Wow! there were so many entries today I had to go to the 2nd page to find my journal. It's great that so many people are journaling.

I found out what the descrepancy was with my paystub. The problem was with the stock options I did this year.
I did some research on this and found a good question and answer page that had the following:

Why am I taxed twice when I exercise stock options and sell the stock at the same time?
You have two separate transactions that must be reported separately even if they occur at the same time. But you aren't taxed twice on the same income. The profit from exercising your stock option is treated as compensation income and appears on Form W-2. In addition, you have to report a sale of the stock, which shows up on Form 1099-B. This form shows the total proceeds of the sale, not the amount of taxable gain. Before you figure your gain, you get to add the option profit from your W-2 to the amount you paid for the stock. That means you won't pay additional tax unless you sold the shares at a price that was higher than the value used to determine the option profit.

Bottom line is I was counting the gain twice when figuring my taxes, so it looks like I should be getting money back instead of owing. I'm still waiting for forms and will work on it some more this weekend to get a better final amount.

Finished listening to the library book on tape The Color of Death by Elizabeth Lowell. Romance/Mystery. Very good.

Finished reading the library book Dark Watch by Clive Cussler. Adventure. Also very good. I like his Dirk Pitt series better, but I like this new series with Juan Cabrillo also

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