Who Really Pays Taxes? Message Board

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Non-Tech : Who Really Pays Taxes?

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To: ztect who wrote (288)	8/15/2000 5:22:10 PM
From: Lizzie Tudor	of 666

Options that vest after 3yrs are considered deferred income, and if I'm not mistaken are taxed at a lower marginal rate of 20%. Not any more... I don't think, but its so complicated and I have a tax guy... The way (I thought) it worked last time I exercised, Say 10K options, 4K vested at 40$/share. If you want to hold the stock you have to pay income tax on the difference between the grant and exercise price - this is even if you want to hold. So its 160,000 of income added to your tax return in order for you to put those 4k shares in your schwab account. You pay medicare on the total amount 1+% because there is no cap on medicare but SS caps at 75K or something. Someone once told me they would never remove the cap on SS since stock options are income and that matching 7% would kill companies like msft and cisco where the execs make in the millions.

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