An incentive stock option (ISO) plan is beneficial to employees because it isn't charged at a regular income tax rate. Instead, the stock options are taxed through a capital gains rate.

Offering ISO stock option plans benefits you as the employer as much as it does the employee. It allows you to attract talented employees and to divert extra money from potentially high salaries. Before you consider implementing an ISO plan for your facility, consider the following:

1. Determine what type of ISO stock option plan to offer and to whom.

2. Get help with ISO stock questions you or your employees may have.

3. Locate an ISO stock consultant to help weed through all the information available.

Action Steps
The best contacts and resources to help you get it done

Search through ISO stock advice to determine what plan is best to offer your employees

Figuring out what type of ISO stock option to provide can be daunting. Do you limit it to higher-up employees? What kind of tax rate should you provide? Should you offer more stocks each year the employee is with the company? These are just some of the questions to consider when implementing your incentive stock option plan.

I recommend: Salary.com provides ISO stock advice to businesses starting up with their ISO stock training programs. Graphs and charts provide key statistics as well as a link to a sample plan. The National Center for Employee Ownership (NCEO) has a glossary and a list of requirements to take into consideration for ISO stock plans.

Find answers to any ISO stock option questions

Odds are you or your employees may have questions on how ISO stocks work. Wouldn't it be nice to locate information online to provide all the answers? Luckily there are a few sites where you can find answers to any questions you may have.

I recommend: Find a list of common questions and answers about ISO stock plans on myStockOptions.com. You can also test your stock knowledge with a quiz located at the top of the page. See important tips on avoiding tax repercussions. If selling the stock is a concern, check out the Tax Guide for Investors at Fairmark Press. The company also offers an option to purchase "Consider Your Options," a book for those who receive stock options. Intuit provides tax-based answers to any concerns you or your employees may have about incentive stock option plans come tax time.

Locate an ISO stock consultant

Have a professional investigate your ISO options before they're offered to help get everything in place and eliminate some potential problems. One of the big concerns may be tax-related, and it's best to be fully informed about that. Contact a financial planner or certified public accountant (CPA) to assist in this area.

I recommend: CPAs are a wonderful resource to consider when dealing with ISO stock options, since they know the ins and outs of taxes and investments. Contact Michael Gray, CPA for answers to ISO stock questions. Check the firm's FAQ list and receive a special report on strategies via email. Securities America offers consultants to assist weeding through the ISO stock information available.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Usually employees who are offered ISO stock must stay with the company for a certain period of time. Make sure you address this before issuing the stock to potential employees.