Stock questions

[5ofus]

Through my DH employer he puts a % each pay check into the company stock plan. They match a % what he puts in. The amount he puts in is put in after taxes.

 

When we want to withdraw money do we have to pay taxes on the amount withdrawn or only the gains plus the matched amount from the employer? When do we pay the taxes? At the time of withdraw or when we file income taxes?

 

Thanks.

 

All this stock stuff is new to us so I'm trying to learn as we go.

[Seabee]

Tax will be on the gain only, or the sale price less his original investment. If he sells at a loss this can offset ordinary income. There is not normally withholding on stock sales. The sale will be reported on your regular tax return. If possible only sell shares that have been held over a year to qualify for the preferential long term gains rate.

[5ofus]

What about the matched part put in by the employer? Is that considered a gain and taxed?

 

Thanks

[Seabee]

What about the matched part put in by the employer? Is that considered a gain and taxed?

 

Thanks

 

It will be taxed. How it is taxed will depend on the details of the plan. It could be treated as either a capital gain or ordinary income. Someone at your company should be able to tell you.