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Ahhh!!! The Taxman. How to overcome the challenges of Equity Plan Taxation

Taxation of Equity Incentive Plan Transactions

It’s that time of year when many companies and their Equity Plan participants have to deal with the ‘Taxman’

  • Companies are filing complex Tax Forms and deadlines

  • Employees or other participants are being inundated with paper and emailed forms

  • The forms and the data required seem to change each year…

Equity Plans are offered to participants as an incentive and a benefit.  But when the time comes to tax reporting, much of the appreciation for Equity Plans can be diminished…

Taxation of Equity Incentive Plan Transactions

Participant Challenges

Participants face multiple challenges in dealing with the ‘Taxman’.  For example U.S. participants have to deal with the following forms:

  • From mid-January onwards various tax forms begin arriving in the mail such as the form W-2 (annual income and tax report), Form 3921 for ISO exercises, Form 3922 for 423 purchase plan purchases, Form 1099-B for share sales, and many other forms.
  • The information from these forms for share sales must be properly transferred to other forms (Form 8949, Schedule D and Form 1040).
  •  The forms seem to change on a regular basis as well as the data required, how the form is laid out and how the calculations are done.

By the time a participant goes through the process of the tax form reporting, they begin to wonder whether the benefits of their Equity Plans are worth it…


Solutions to simplify taxation 

Equity Compensation and Tax


By automating its Equity Plan using share plan administration software, a Company can provide participants with 24/7 access to the following information:

  •  Online Statements of their equity transactions, including tax details
  •  Individual Tax Forms are posted to a participant’s personal library, which can be viewed simply by loggin into their portal page
  •   FAQs, providing detailed information specific to the handling of equity plan tax reporting
  •   Videos that de-mystify the tax reporting process and reinforce the benefits of Equity Plan
  •   If a Company is concerned about providing ‘tax advice’ they can provide links to other sites that specialize in providing help in this areas, such as


The above scenario focuses on U.S. participants, however similar challenges are faced by participants across the world.

Companies with cross border equity plans and mobile workforces would benefit enormously by automating their Equity Plan to help tackle the challenges of taxation.

As Benjamin Franklin said “…in this world nothing can be said to be certain, except death and taxes”.

There is nowhere to hide from the Taxman!


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Do you have a question for the Global Shares team?

Please don’t hesitate to contact us!


About Global Shares 

Global Shares is a market-leading provider of outsourced share plan administration services and highly innovative web based software for companies equity administration and financial reporting. With offices in London, New York, California and Ireland, we work with public and private companies listed on multiple exchanges with participants in 100+ countries. Our next generation software products and services are created 100% in-house by our IT team and are renowned for their high quality, flexibility and reliability.  Global Shares success is attribu ted to its refreshing client-centric approach to the equity plan industry, its fully-customizable products and its sharp-minded Team of experienced Compensation Professionals. For more information please visit our website




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