Hi, my name is Tom Lo with Vested Financial Planning. I’m here to help you understand how can you save on your taxes with your ISOs.
The key way of saving taxes on your ISOs is by exercising and holding them for more than a year. If you exercise and hold your ISOs for more than a year, they qualify for the lower long-term capital gains tax rate. That means instead of paying ordinary income tax rate of a high 37%, you could pay the highest long-term cap gains tax rate of 20%. That’s a 17% savings on taxes.
So, for example, if you have a million dollars in ISOs, then you can save $170,000. So this is an important way for you to save taxes on your ISOs.
If you want to learn more come to my website at vestedfinancialplanning.com. Thank you very much.