Homesteading Forum banner

1 - 8 of 8 Posts

·
Registered
Joined
·
1,894 Posts
Discussion Starter #1
My DH's company was bought out last year and we are finally receiving our ESOP payouts. The question no one is answering is how do we do taxes on this? Do they take out tax off the top before they cut a check or do we put it on our taxes next year when we file? And if so.....how much tax should I expect to pay on it percentage wise? Does capital gains not pertain to ESOP/Stocks? Thanks everyone!
God Bless,
Michele
 

·
Registered
Joined
·
486 Posts
You should contact a financial planner about rolling that esop into a 401k or ira to defer paying taxes on it period.

http://www.schwab.com/public/schwab/home/account_types/ira_retirement/faqs/rollover_faq.html

Search for esop on that page....

If you just take a check and stick it in your checking account like a normal paycheck, yes you will owe taxes on it at the end of the year at whatever tax rate you fall into.

I would try really hard to get those funds rolled into a tax deferred holding place (ira, whatever) rather than lose 20-40 percent of it right off the bat to uncle sam.
 

·
Registered
Joined
·
1,894 Posts
Discussion Starter #3
We have other money that we have heavily invested in our IRA. This money is going to be used to purchase land and home debt free. I searched the page you gave me but really did not find anything to the extent I am looking for. Thank you though. :)
God Bless,
Michele
 

·
Registered
Joined
·
1,894 Posts
Discussion Starter #5
But how much tax is what I'm trying to figure out.....is that according to what tax bracket your in or the one it pushes you into? My head hurts already.
God Bless,
Michele
 

·
Registered
Joined
·
1,894 Posts
Discussion Starter #7
And the only exception to is from the sale of a home, right?
Ugh, my stomach churning now.
Plan Z! LOL
God Bless,
Michele
 

·
Premium Member
Joined
·
4,283 Posts
There are another couple of exceptions - education and healthcare I think - but I don't think any of the exceptions get you out of the tax bracket hike, they just get you out of the 10% penalty.

So, if you don't have an exception and you don't roll it over, your gross income goes up by the amount of the ESOP and pushes you into a new tax bracket AND you have to pay 10% of the full amount of the ESOP.

If you roll it over - no tax change, no 10% penalty.

With an exception - gross income goes up by the amount of the ESOP and pushes you into a new tax bracket but there is no 10% penalty.
 
1 - 8 of 8 Posts
Top