Cashing out employee stock purchase plan | TigerDroppings.com
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dallastiger55
LSU Fan
Jennings, LA
Member since Jan 2010
6611 posts

Cashing out employee stock purchase plan

Hey guys I might be leaving my job in the next month to take another one and I've recently thought about cashing out my stock from my employee stock purchase plan.

I have 15k in it as of now and contribute $100 per paycheck to it and they buy stock at the end of every quarter for a 15% discount.

My question is, what are we looking at with taxes on this and is this something they tax when withdrawal or at end of year?

Also what happens to that money I contribute every check if I leave in the middle of the quarter?



Thnks in advance


LSURussian
LSU Fan
Member since Feb 2005
85152 posts

re: Cashing out employee stock purchase plan
The answers to your questions depend on the type of plan your company has and your current taxable income level.

Your best bet is to get a copy of you plan's "Summary Plan Description" which is the required explanation employers must provide to employees about their benefits plans.


dallastiger55
LSU Fan
Jennings, LA
Member since Jan 2010
6611 posts

re: Cashing out employee stock purchase plan
Ok I will check.


Forgot to mention fidelity manages it and my wife and I's combined income is $115k


dallastiger55
LSU Fan
Jennings, LA
Member since Jan 2010
6611 posts

re: Cashing out employee stock purchase plan
spoke with fidelity and they said that the 15k is subject to capital gains taxes and i get a discount if i hold them past 2 years.

how do i tell what capital gains taxes are and should i hold or cash them out now because isnt the government going to raise it?


matthew25
Ole Miss Fan
Member since Jun 2012
3977 posts

re: Cashing out employee stock purchase plan
Just a wild thought: how much have you put in? That should not be taxable. Capital gains should be 15%?

Or, just keep the fund at Fidelity?


Hope someone will chime in.


LSURussian
LSU Fan
Member since Feb 2005
85152 posts

re: Cashing out employee stock purchase plan
quote:

how much have you put in? That should not be taxable.

You're assuming his payday contributions were after tax.

That's why I bailed on answering his questions. Too many unknowns to give accurate answers.


dallastiger55
LSU Fan
Jennings, LA
Member since Jan 2010
6611 posts

re: Cashing out employee stock purchase plan
geez sorry guys im a virgin on this stuff

here is what it says word for word from our companys handbook

"Allows you to deduct an after-tax dollar amount from your paycheck to purchase (company name) class A common stock"


LSURussian
LSU Fan
Member since Feb 2005
85152 posts

re: Cashing out employee stock purchase plan
quote:

an after-tax dollar amount

When you cash out your shares from the plan, your company should give you a statement showing what your cost basis is for the shares for tax purposes.

For example if your cost basis is $10/share and you sell all of your shares at $12/share, you will have a taxable gain of $2/share. Whether the gains are long-term (max tax rate of 20%) or short term (taxed at your ordinary income marginal rate) will depend on how long you've owned the shares, both within the plan and after you withdraw the shares from the plan.


dallastiger55
LSU Fan
Jennings, LA
Member since Jan 2010
6611 posts

re: Cashing out employee stock purchase plan
thanks Russian, appreciate ya pal


thinking of cashing them out to put towards a house in a year or two and wanted to know my options.


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