How to Handle Taxes on Company Stock

Shares from your employer can equal a big payout, but it pays to know the rules.

(Image credit: Anya Berkut)

When your employer awards you a bonus in the form of restricted stock units, or RSUs, it promises to give you a set number of shares of company stock after a specified vesting period—as long as you stay with the company. For example, suppose your company gives you 2,000 RSUs that vest in four years. If on the vesting date the stock is trading at $22, you’ll own shares valued at $44,000. That’s before taxes, which can be considerable.

TOOL: Pinpoint Your Tax Audit Odds

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Sandra Block
Senior Editor, Kiplinger's Personal Finance

Block joined Kiplinger in June 2012 from USA Today, where she was a reporter and personal finance columnist for more than 15 years. Prior to that, she worked for the Akron Beacon-Journal and Dow Jones Newswires. In 1993, she was a Knight-Bagehot fellow in economics and business journalism at the Columbia University Graduate School of Journalism. She has a BA in communications from Bethany College in Bethany, W.Va.