Tax Implications of S-Corporation Compensation

Tread carefully when determining compensation for S-corporation shareholder-employees. By distributing profits in the form of dividends rather than salary, an S-corporation and its owners can avoid payroll taxes on these amounts. Because of the additional 0.9%...

Tax treatment of NQSOs vs. their better-known counterpart

With nonqualified stock options (NQSOs), if the stock appreciates beyond your exercise price, you can buy shares at a price below what they’re trading for. This is the same as for the perhaps better-known incentive stock options (ISOs). The tax treatment of NQSOs,...