Are employee stock options taxable?

Stock options are an employment incentive tool used by many large corporations that provide their long-term employees with options to buy stock at a certain price, called a strike price. Once the stock hits the strike price set in the employee stock option plan, employees may purchase the stock at anytime before the stock options expire. As with stocks generally, stock options have no easily determined and stable value. Therefore, you are generally not required to include any amount of stock options or actual stocks in your gross income for tax purposes. Instead, you report income or loss when you sell the stock that you purchased under an employee stock option plan.

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What are the tax consequences of an early withdrawal from a Simple IRA?

A SIMPLE IRA, also known as a “Savings Incentive Match Plan for Employees” is most common among small employers who have less than 100 employees. When Congress created SIMPLE IRAs, it intentionally imposed harsh penalties on early withdrawals because this type of retirement plan is specifically designed to force lower wage workers to save for retirement. Unlike other retirement plans, loans against the value of a SIMPLE IRA are not permitted.

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