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Taxes on employee stock options/profit sharing program?

I learned that my company at one time had an employee stock option program which as a result of selling a majority stake to an Alaskan base company my employeer closed the program & converted it to a profit sharing one while they await IRS permission to depense the funds. Last I was told I was elegible for the program & that at the time the indivual share would be about $30,000 dollars. My question is I assume it will be taxed but can someone help me as to at what percent it would be? I guess to be more clear is it taxable & if as I assume it will be what type or percentage would it likely be taxed? I don't expect a perfect answer just an idea. A perfect answer would be of course nice but I won't hold it against anyone.

Public Comments

1. You may be able to roll this into a 401K or IRA plan and not be taxed on it until you withdraw it from your plan. It all depends on the matter in which the IRS rules the plan is to disperse the funds. If it is taxable, it will be taxed as ordinary income an you will also have all taxes charged on it FICA and Medicare unless the plan receives special treatment. The tax rate is hard to determine, it will be withheld probably at 15% plus your state rate but keep in mind that this will be added to your annual income which might force you to pay a higher rate on all your income.
2. It's earned income; of course it's taxable. It will be taxed at your current rate using your current deductions just as if it were a paycheck. When you do your taxes for this year it will show on your W2 as income. When you plug in the numbers you will find it raised you to another tax bracket and you'll likely owe the IRS some money. So don't go spending it until after you've figured your taxes.
3. There are several types of stock options so this answer is far from "perfect". You may have some options to roll this money into an IRA but that determination is beyond the information you have provided. So, let's just assume that you get $30K in the mail from this "program" and put in in a coffee can in the back yard. In some fashion (depending on the type of distribution) this will be ordinary income on you tax return in the year of the distribution. If your taxable income (after taking standard deduction and exemptions) is $31,850 from all other sources you would now have $61,850 in taxable income. If you are single with no dependents your tax on the $31,850 in come is $4,886 and the tax on the $30K from the program is $7,500 for a total of $12,386. The following link will provide tax charts for tax year 2007 from which you can do the same thing given your filing status. http://www.irs.gov/formspubs/article/0,,id=164272,00.html
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