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It’s supposed to look up the stock price and display it under the price, but I’ll have to see why it’s not loading. I actually use it to optimize for how much

It’s supposed to look up the stock price and display it under the price, but I’ll have to see why it’s not loading. I actually use it to optimize for how much to contribute because when the stock falls you end up hitting the convoluted IRS limit, which degrades the effective return on the total amount of contributions.

smachiz 4y ago
Ahh... probably good to clarify that. My company limits us to a maximum of 15% of your total compensation in addition to IRS limits. I set it to 15% and let them sort out the IRS math.
astrange 4y ago
Does your company not have a discount beyond the minimum price thing? Because it's always worth contributing the max to ESPP no matter what happens, then selling as soon as possible, if you have that. None of the tax optimization stuff is worth it. It's just an option to get 15% more money in exchange for getting paid once every six months.
beembeem 4y ago
Many plans I've participated in cap contributions well before the theoretical 25k limit. Current employer has a very interesting plan that leaves much of the limits up to you which is a double edged sword. If you can figure out how to model the limit, you can make informed decisions when the price falls but for the average employee it's complicated and can cap their contributions way too early. To effectively figure out the 25k limit you need a history of prior contributions to know how much limit is left in each tax/calendar year.
- codingmatty 4y ago
  The problem really lies in the way the IRS limit works. It limits the amount of shares you can purchase based on the FMV of the stock on the offering date. So if your stock goes down then you may well hit the limit and not realize it. But you are correct, the 25k limit is based on all of the purchases made in the calendar year. And the $25k carryover complicates things as well.
- deleted 4y ago
  [deleted]

smachiz 4y ago

Ahh... probably good to clarify that. My company limits us to a maximum of 15% of your total compensation in addition to IRS limits. I set it to 15% and let them sort out the IRS math.

astrange 4y ago

Does your company not have a discount beyond the minimum price thing? Because it's always worth contributing the max to ESPP no matter what happens, then selling as soon as possible, if you have that. None of the tax optimization stuff is worth it. It's just an option to get 15% more money in exchange for getting paid once every six months.

beembeem 4y ago

Many plans I've participated in cap contributions well before the theoretical 25k limit. Current employer has a very interesting plan that leaves much of the limits up to you which is a double edged sword. If you can figure out how to model the limit, you can make informed decisions when the price falls but for the average employee it's complicated and can cap their contributions way too early. To effectively figure out the 25k limit you need a history of prior contributions to know how much limit is left in each tax/calendar year.

codingmatty 4y ago
The problem really lies in the way the IRS limit works. It limits the amount of shares you can purchase based on the FMV of the stock on the offering date. So if your stock goes down then you may well hit the limit and not realize it. But you are correct, the 25k limit is based on all of the purchases made in the calendar year. And the $25k carryover complicates things as well.
deleted 4y ago
[deleted]