Archive | Wealth Accumulation

Accumulating wealth for investments and retirement

Dan Zajac, philadelphia financial advisor

Is a Non-Qualified Deferred Compensation Plan a Good Deal?

It’s common for employees that earn considerable income to be offered a non-qualified deferred compensation plan (NQDC). Simply put, an NQDC plan allows a plan participant to defer receiving a portion of income in the year it is earned, to later receive this income in the future. The deferral of income is also, in effect, […]

Continue Reading 0
Dan Zajac, philadelphia financial advisor

Exploring the Details of A Cash Exercise of Stock Options

When it’s time to exercise your employer-provided stock options, you generally have one of two options: a cash exercise or a cashless exercise. You may choose a cash exercise in the hope of achieving preferential long-term capital gains treatment on further appreciation of the stock. In addition, you choose a cash exercise in order to […]

Continue Reading 0

The Math Behind a Cashless Exercise of Non-Qualified Stock Options

When the time comes to exercise non-qualified stock options, the question of whether to perform a cash exercise or a cashless exercise is a common one. In many cases, option holders default into a cashless exercise—and for good reason. Among other things, a cashless exercise may be an easy option and may result in zero […]

Continue Reading 3
Dan Zajac, philadelphia financial advisor

Comparing the Solo(k) and SEP-IRA for the Self-Employed

For those who are self-employed, the question of how to save for retirement is a frequent one. Fortunately, the answer isn’t all that difficult. Establishing a retirement plan as a self-employed individual can be easy. In fact, it can be easy AND more advantageous than a typical employer-sponsored 401(k) plan. This is because as the […]

Continue Reading 3

Exploring Tax Rules for Non-Qualified Stock Options

On the surface, the tax rules associated with non-qualified stock options are relatively straightforward. Upon receipt of non-qualified stock options, no taxes are due. Furthermore, these stock options are not taxable until you exercise your shares. This “exercise control” allows the option owner to defer income tax while potentially creating considerable wealth, should the value […]

Continue Reading 2
Dan Zajac, philadelphia financial advisor

Selling Incentive Stock Option Shares To Accelerate Tax Credits

Incentive stock options may provide for the opportunity to pay taxes on the gain at long term capital gains rates instead of at ordinary income rates if exercised following the rules for a qualifying disposition.  Because of this potential tax advantage, many will attempt to meet the standard for qualifying in order to “save” on […]

Continue Reading 1
NUA and Net unrealized appreciation

What Is Net Unrealized Appreciation?

Net unrealized appreciation is an underused and often unknown tax planning opportunity for those who own company stock inside a 401(k) plan. For many of the employees that participate in an employer-sponsored 401(k) plan, the assumption is that when money is withdrawn from the plan, it will be taxed at ordinary income tax rates. For […]

Continue Reading 3
ESPP or employee stock purchase plan

Why Your Employee Stock Purchase Plan May Be a Great Deal

Employee stock purchase plans allow for plan participants to purchase company stock at a discounted rate of up to 15% (subject to your specific plan rules, of course). Based on this simple statement alone, one could argue that an employee stock option plan is something that all eligible employees should consider. While this argument may […]

Continue Reading 0
Dan Zajac, philadelphia financial advisor

4 Questions to Ask When Your Employer Stock Options Vest

Employer stock options are often issued as part of an employee compensation package to reward and retain key employees. If the company does well, the employee also does well through an appreciating stock price. However, employer stock options may also apply the proverbial golden handcuffs to an employee.  Leave the company before the options vest […]

Continue Reading 1
exercise incentive stock options and AMT

Why Exercising Your Incentive Stock Options Early May Be the Best Strategy

In lieu of intentionally exercising for a strategic reason, incentive stock options (ISOs) are often held until near expiration.  At which point, at the risk of expiring and losing all value, the recipient of the incentive stock options will likely choose to exercise. Upon exercise, tax reporting will occur.  Exactly what reporting occurs and the […]

Continue Reading 0