ESPP 省税有方 – 祖传秘方，不可外传啊！

基本思路：

Shift your ordinary income (又名：W-2 compensation) to long term capital gain. 

具体操作：

For ESPP With Stock Price Decrease Between Offering Date and Purchase Date ONLY, this is what you should look for: 

Disqualifying Disposition Resulting in Long-Term Capital Gain

How?

First of all,  you want to sell your ESPP as a disqualifying disposition, i.e. selling your ESPP shares less than two years after the offering date to keep your ordinary income as little as possible,.

Secondly,  you want to sell your ESPP shares more than one year after purchasing them to inflate your long term capital gain as much as possible,.  That is good, because long-term capital gains are taxed at a rate that is lower than your regular tax rate.

In a word, sell your above ESPP less than two years after the offering date and more than one year after purchase. (Be aware of, this won't applied to any other ESPPs.)

Why? 

http://blog.wenxuecity.com/blogview.php?date=201104&postID=7381

Here is my concern.

Many of the Bush-era tax cuts from 2001 and 2003 are set to expire as well. The list is long, but here’s one of the most important changes:

Higher tax brackets may be coming back.

American taxpayers got a big break in 2001 when tax brackets on ordinary income were reduced. On January 1st, you’ll ring in more than a new year—you’ll ring in new tax rates, too.

Current tax brackets are set at 10%, 15%, 25%, 28%, 33% and 35%. The new 2011 rates will revert back to the pre-2001 rates of 15%, 28%, 31%, 36% and 39.6%.

While you may wince at this development, look at it this way: the 2011 tax rates will be no higher than the rates we all paid in the 1990s.