I am married, joint filer, no kids, standard deduction. we rent. Both of us work. This year, after 401k max out, our gross income should be around 225K. Also, we got bonuses around 100K. Taxes for hese amounts have been withed at 25%.
I have ISOs that are fully vested(but not exercised, grant date 2010) to the tune of $332K(10000 shares).
I am thinking of staying at the company until the year end and spread out the exercise across 2015 and 2016. I will NOT make this kind of money in 2016 and chances are my income will be 0-40% of $225k(plus no more bonuses and isos) and continue to stay so for years to come (early retirement).
So, I am planning to switch jobs soon and scratching my head on how to deal with this -
Looking at the graph for joint filers here, [www.kitces.com
Clearly, I hit the bump if I exercise the ISOs.
A> Based on the amounts(AGI $325K + 332 = $667K) I have written above, it appears I have to exercise and sell another $167K of stock while holding on to the remaining. Is this a good way of looking at it?
B> should i exercise, sell ~60% and keep the remaining 40% as accelerated income and taking the bitter pill of 35% hump one time?
C>Stay until the end of the year and split my exercises?
D>Should I exercise, pay AMT and wait 1 year before I can sell the entire block or chunks? As i said, our compensation is going to tank since both of us may end up not working.
E>Can I use the situation next year to my advantage, ie early retirement? I will also be a non-resident in 2016.
any ideas appreciated.
I am still unsure how to go about it. I am DIYer normally. But, wont mind paying for professional advice.