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April 27, 2021
Question

Company acquisition, stock payout in cash

  • April 27, 2021
  • 1 reply
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Hi. My company recently went through an acquisition. As part of it, the acquiring company paid out our stocks in cash. I see from my paystub that my normal taxes were taken out already when my company sent the payment. How should this be handled during the next tax season? Will I likely owe additional taxes on the amount I received?

1 reply

SusanY1
April 28, 2021

Most likely, the additional tax the company withheld will simply be a part of your W-2 withholding (Box 2).  The payment, depending on a number of factors, could be part of your Box 1 wages or it could be reported to you separately.  

 

It is difficult to know for sure if you will owe additional taxes since this transaction will work together with all of your other income to determine your total tax liability  Our TaxCaster tool may help you to estimate your total liability.

 

Also, for all taxpayers concerned about withholding either due to changes made during the year or unusual income circumstances such as yours, can benefit from checking to see where you are with our Withholding Calculator.

 

I would suggest, in your case, taking your most recent pay stub and running through the above withholding calculator to gauge whether it appears your withholding (overall) is sufficient for your goals for the year.  If it's not, this calculator will walk you through the necessary adjustments at the same time.  

 

If you make adjustments to withholding, I recommend marking your calendar to come back to the withholding calculator to check again after 2-3 months to see where you are and recommend that you file a new W4 at the beginning of 2022 to reset it back to "normal".  

 

Using the withholding calculator now as well as again in a few months will help you to avoid unpleasant surprises at tax time next year, and should not take more than about 15 minutes of your time.  

 

 

 

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