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Tax tips 2010: double check ESPP income

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ESPP stands for Employee Stock Purchase Plan. My former employer is a public company, and it offers a good ESPP plan: 15% discount of stock market price at the beginning or the end of plan period (pick the lower of the two prices, then apply 15% discount), the plan period is usually 6 months. I took advantage of that. I was nervous about the market crash in Jan 2010, so I locked in my gains in late 2009. But I found a catch until today when I finalize the federal income tax using Turbo Tax (got 35% off referral from Bank of America here).

Basically I found my W2 form already included the ESPP gain (as my ordinary income). And I already put those in the investment section before today. That’s double counting my income! I am glad I caught this when I double checked my W2 form 😀

Opened traditional IRA
To correct the mistake I made about selling ESPP stocks too earlier, also combined with my new employment situation, I opened an IRA account to reduce the taxable income for year 2009.

4 thoughts on “Tax tips 2010: double check ESPP income

  1. Good write up keep it up, i will be one of your regular readers. Citibank Aadvantage

  2. ESPP good item to watch, not all employers may get it right on W-2

  3. Good thing you double checked your W2 form! Nice article.

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