When do I need to pay AMT on my stock options?

September 4, 1999

Date:   Tue, 10 Aug 1999
From:   Joe

Ok, here goes…

Taxable income about XXXX after deductions (mortgage making up the bulk of them), filing jointly, my spouse has not worked this year. I’m looking at a spread of about $X on XXXX options that I’d like to exercise to get the capital gains clock going. Would I need to pay AMT now or in December or April 2000?

Joe Thomas
Director, Strategic Alliances
Viador, Inc.
San Mateo, CA


Date:   Sat, 04 Sep 1999

Hello Joe,

The answer to your question is, “It depends.”

If your 1999 federal and California withholding are adjusted so that you pay in at least 105% of the tax on last year’s tax returns, you will be “protected” from penalties for underpayment of estimated tax.

The balance of your tax liability will be due April 15, 2000.

Good luck!

Mike Gray

For more information about incentive stock options, request our free report, Incentive Stock Options – Executive Tax and Financial Planning Strategies.

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