Can we avoid taking a tax bath?

[Ghoulish Delight]

Originally Posted by scaeagles

I am curious, though. Capital gains rates are a flat rate, are they not? And I thought they were 28%. How is it, then, based on your OP, that your effective rate is 40%? Tax law changes all the time, but I thought stock options were typically offered because of their tax advantage - it is not deemed as work related income, and liquidation would then only require capital gains taxes, with no medicare or social security taken out.

According the ETrade page, they will indeed be witholding federal, state tax, SDI, medicare, and SS. Those are 25%, 9.3%, 1.08%, 1.45%, and 6.2% respetively. Don't ask me why it falls under all that instead of just CG.

Perhaps you're thinking of an employee stock purchase plan vs. a stock option. My company offers both, this is a stock option.