Since TSFC did kinda bad last month, I will write you a nice article that may help your life.  Today we are going to talk about ISOs.

No, not illegal WAREZ ISOs of pirated video games – Incentive Stock Options.  If your company is cool and offers you ISOs they can come in pretty handy if your company is successful.  How do they work?  Glad you asked!

The elusive Eggo

Some companies will add this as a perk to your salary.  They offer you a shot to buy the company stock at a set price (strike price in technical terms).  Think of it like a rain check for Eggo Waffles at a grocery store.  Well, when you go back to the store, you have the option to buy the Eggo’s at that price on your slip.

Well what if you see on the news that Eggo’s cause instant cancer?  The price will surely go down.  They won’t be able to give them away.  Well that kinda makes your rain check worthless.  On the other hand, what if there is a shortage?  Much like the great Eggo shortage of ‘09, stores could charge more.  That is when your rain check (ISO) is worth something.

So in conclusion, your company gives you a shot to buy some stock but that chance is only worth something to you if the price goes up.  If you need help calculating how much your ISOs are worth or would like help with the tax impact of ISOs, contact us.  That should hold you until we have another poor performance month.