Tax question

[MizTink]

i worked for a company (publix) that regularly gives employees stocks. i never purchased any, just accumulated what i was given. anyways, i don't work for them anymore and sold all my stocks. i haven't received my check yet and have a few questions.
i was told by (another employee) that they will take a HUGE amount of taxes out of the check. like apx 40%. i called to check the status of my check and was told what the current value/share is right now. i have a paper saying how many shares i had/sold. simple math to figure out how much i'll get. but what rate is it taxed at?? the rep said they don't take ANY taxes out, that is my responsibility. is this something i will do with my annual income tax for 2009? will it be at a different rate than my regular income?
thanks for any help with this. google was NOT my friend this time.

 

[LadyZolt]

The tax rate for the stocks depends on when the stocks were purchased. If the stocks were held less than a year, you'll pay based on your income (and I think that the value of the stock is added to your income, so it could push you into a higher tax bracket). For stocks held more than a year, you'll pay the capital gains on it, and again it depends on your tax bracket. You might seriously consider hiring a CPA for this tax year just to make sure you pay the right amount (and not more than you must - LOL!)

-Dorothy (LadyZolt)

 

[MizTink]

yuck

 

[mickeyfan1]

You need to know whqat the value of each share was when you got it. And what the value was when it was sold. You will owe tax on any profit you make. Also, if the company "gave" you the stock, did that tax the value at that time as income to you? If not, there could be other tax implications. Most likely they did tho, so you would be OK. You will be taxed at the standard tax rate for the profit, however, if you are in say the 20% bracket and made a bundle on the sale, you could easily be pushed into a higher bracket. Yes, it is a capital gain, but in the end, it all counts to that total income line.

You should get a statement from the brokerage that sold your shares showing the sales price and the amount of $ you made in total. If they are the same firm that handled the original "gifts" they may have all the history as to the original values. This is important, because if you bought the shares at 20 and sold for 40, you owe tax on 20. (if the company taxed the "gift to you, it is considered that you bought the shares). However, if you have no records of the original values, you could be liable for the entire $40 when it come to taxing. You need to talk to an accountant or a tax expert.

 

[manning]

Was this stock given to you in a 401-k plan or what??

If it is not in a 401-k I have no idea how it is handled. If it was in a 401-k you will be taxed at regular income tax rates and if you are younger than 59 1/2 taxed an additional 10% as an early withdrawal penalty.

 

[Cheshire Figment]

If the stock was "awarded" each year, the fair market value (FMV) of the award was porbably included in your W-2 and you paid income taxes on those shares at the time. Your basis would be the FMV at the time of the award.

If the stock was sold to you at a discounted price, the basis would be what you paid for the stock.

If the stock was in a retirement plan your basis is zero and it is treated as a withdrawl from a retirment plan.

What I would suggest doing is going to the company and ask them for a listing of each date you had received stock, the number of shares given to you, and the FMV at the time you received the stock.

Any stock which was outside of a retirement plan and held one year or longer at the date of sale is considered long term gain (or loss) but if held less than a year is short term gain (or loss).

You need to sit down with someone knowledgable on the subject with all the paperwork to find out how to treat this. And it should be quickly.

Mike (CPA Retired)

 

[dis-happy]

You lucky dog. I wanted to buy some Publix stock but they only have an ESOP.

Most likely they will withhold more than necessary and you can recoup some when you file your tax return.

 

[MizTink]

You lucky dog. I wanted to buy some Publix stock but they only have an ESOP.

Most likely they will withhold more than necessary and you can recoup some when you file your tax return.

they aren't withholding anything. but i want to have some sort of idea of how much i'll have to pay because i will be living of of that money. i would hate for a big surprise when i file!!