It’s that time of year again – the best of 2024 articles. As the year winds down and we prepare for the new one, here are the three most widely read articles of the year.
They all have pearls of wisdom when it comes to finance. Here they are along with a quick summary.
The Best of 2024
“Surf Wax and Financial Planning” details the need to be prepared for both surfing and finances.
“ISOs and the AMT” goes through how the Alternative Minimum Tax (AMT) is complicated when it comes to exercising ISOs.
“The Advantages of NSOs” mentions the advantages of this type of option, often scorned for its tax disadvantages.
Lessons Learned from the Best of 2024
There are many lessons from the best of 2024 list – both good and bad – from the three posts mentioned above. Here are the important points of each one.
Be Prepared
When you go surfing, it’s important to wax your board before getting in the water. Sometimes in finance, you may forget your “wax” without knowing it. Where in your life are you missing out on financial opportunities? A lot of times they are right in front of you without knowing it.
AMT and ISOs
The AMT is tricky when it comes to ISOs. When you exercise ISOs, you’ll likely have to pay the AMT – a large tax bill. This impacts your cash flow and you take on more risk by owning shares in your employer. There are other considerations outside of a higher tax and more risk, like the AMT credit.
NSO Advantages
NSOs have many advantages over their cousins – ISOs. For example, there is no $100K calendar year limit, early exercise is easier, and there is no AMT. NSOs usually get a bad wrap because of their ordinary tax rate, but there are ways to use them to your advantage.
As we venture into 2025, how will your “best of” stories unfold?