Beware the Success Tax!

Your UPS stock incentive stock options could subject you to the Success Tax!

The Alternative Minimum Tax (AMT) or “Success Tax” might be thought of as a separate tax system with a unique set of rules for deductions, which are more restrictive than those in the traditional tax system. In recent years, however, the “very rich” aren’t the only ones who need to be concerned about the AMT. Because the AMT was not indexed for inflation until 2013, more and more middle-class Americans are being forced to pay it.

Balancing risk, taxes, asset allocation, and retirement income is important.

These provisions involve complex calculations, making it difficult for most people to determine whether or not they will be subject to the AMT or investment surtax in a given tax year. One of the best ways to avoid or minimize taxes is to communicate throughout the year with your tax professional and financial advisor, and obtain advice before selling investment positions and real estate, or making other decisions that may result in a taxable event.

We can work with your tax professional during the year to help estimate the AMT and any tax credits available so you can make an informed choice on when and how much to exercise your stock options.