Reality Check: Tax Breaks on Stock Options
Current legislation swiftly moving through the House of Representatives could ensure that employees receive tax incentive breaks when they exercise their right to purchase stock from their employers.
Controversy exists, of course. Labor unions and Democrats have gone public in saying that the legislation needs to make certain employees don't abuse this privilege by replacing traditional retirement plans with stock buys.
Current rules state that employees have to pay taxes when they buy shares. The legislation, on the other hand, allows employees to defer any tax payments until the shares are sold. Depending on the situation, employees will pay taxes at long-term capital gain rates instead of higher income tax rates.
The proposal only calls for half of any company's employees to be eligible for the tax breaks; Democrats would like for at least 90 percent of employees to be eligible.
Voice of the Editor
Which isn’t completely true. I mean, occasionally I drop by when I manage to sneak out of the nonstop frat party over at Going Concern, but I’m mostly a wallflower over there. I’m happy to say that I’ve been given express permission (or explicit orders, if you like) to wander over here to AccountingWEB more often.
Why is that, you might ask? My job is to replace the irreplaceable Gail Perry as Editor-in-Chief. What does that mean? I don’t really know! I think it’ll be fun getting a feel for things, throwing in my own thoughts here and there, and listening to the discussions you’re having about the accounting profession.