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Employee Stock Purchase Plans – Understanding the Essentials Part 1

Employee Stock Purchase Plans – Understanding the Essentials Part 1

 

Photo Credit: AMagill

Employee stock purchase plans can hold immense financial purpose and benefit. Understanding the procedures and processes to properly capitalize upon the benefits of employee stock purchase plans is especially important.

This two part blog series will introduce four of the essentials for understanding employee stock purchase plans and will help better your financial experience. They first two essentials are:

  1. Know how to enroll and follow procedures: Employee stock purchase plans have very detailed rules for enrollment and they will differ with every company. Be sure to understand the procedures, forms and eligibility rules before enrolling in your own plan. Be conscious of what you are authorizing by signing these forms and enrolling into your plan. We also suggest being aware of enrollment dates with an understanding of an “election period” and “open enrollment.”
  1. Understand tax qualifications: There are multiple types of employee stock purchase plans and being mindful of both tax and non-tax qualified plans will help you understand your own employee stock purchase plan better. Having this understanding will also aid in the future filings of tax returns. Do your research and be proactive about educating yourself on all aspects of your plan and how your financial decisions can affect your taxations and general outcomes. Seek professional advice if necessary.

Stock Connections specializes in working with San Francisco Bay Area companies that are involved in mergers & acquisitions, are raising capital, or creating stock option or other equity plans. We help start-up, private and public firms become – and remain – SEC-compliant. Stock Connections’ services are designed to help both start-ups and established firms comply with SEC and other regulations in their equity compensation programs. If you or anyone you know is looking to get involved with any of the above, we encourage you to contact us today!

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