This tax-return season presents greater-than-usual potential for confusion, uncertainty, and expensive mistakes in Internal Revenue Service (IRS) filings for equity compensation plans, according to myStockOptions.com.
The big changes for this year include modifications both in the major IRS form used to report stock sales and in the rules for reporting the cost basis of stock compensation.
Anyone who received income from equity compensation or sold shares in 2014 must understand the related reporting on IRS tax forms if they are to avoid costly errors on their tax returns. In the articles and FAQs of its Tax Center, myStockOptions.com provides guidance that can help taxpayers and their tax return preparers file accurate and error-free IRS tax returns.
The content provides insights into the prevention of tax return mistakes. Examples in plain English show taxpayers and their advisers exactly how to report stock compensation and stock sales on tax returns. A new interactive quiz on tax returns lets users test their understanding of the tax rules before they file.
The Tax Center has all the answers on the filing and reporting of tax returns that involve stock options, restricted stock, restricted stock units, performance shares, stock appreciation rights, and employee stock purchase plans. Core articles and FAQs spell out the most common mistakes people make with stock grants on their tax returns. Taxpayers, their financial advisers, and their accountants can quickly run through these to be sure they submit error-free returns.
Users of the Tax Center can make sense of reporting requirements with annotated how-to diagrams of IRS tax-return forms, along with diagrams of Form W-2, Form 3922 (for employee stock purchase plans), and Form 3921 (for incentive stock options). Podcasts and a video convey tips for tax returns, including common errors to avoid.
“The tax reporting for stock compensation is complex,” says Bruce Brumberg, editor-in-chief of myStockOptions.com. “Even accountants and tax advisers sometimes make mistakes. Our goal is to help employees and their financial or tax advisers realize the full potential of equity compensation by educating them about tax rules and helping them prevent costly errors.”