Tax Playbook · Keep more of each paycheck
ISO exercises: watch the AMT
Advanced
When you exercise incentive stock options and hold the shares, you owe no regular tax at that moment. But the bargain element — the profit between the exercise price and the market value — can count as income under the alternative minimum tax. A $120,000 bargain element can push you into the 28% AMT bracket and eat much of your AMT exemption. Run the math before you exercise so a no-cash move does not create a real tax bill.
Good for: Employees with incentive stock options at fast-growing companies.
Learn the basics
Recent articles & guides
- Higher 2026 AMT Risk: Tax Planning Strategies to Consider
- AMT Exemption 2026: Numbers and Who Gets Hit
- Alternative Minimum Tax Explained (U.S. Bank)
On this site
Related strategies
529 plans — and the Roth rolloverA 529 is a savings jar for college: the money grows tax-free, and many states give you a tax break for putting…Max out pre-tax retirement accountsPut money in a 401(k) before taxes are taken out, and you skip paying tax on it this year. In 2026 you can put…Backdoor Roth IRAMake too much money for a Roth IRA? There's a legal workaround: put money in a regular IRA without taking a ta…Mega backdoor RothSome 401(k) plans let you put in extra after-tax money — far more than the normal limit — and then slide it in…HSA: the triple tax breakAn HSA is the only account with three tax breaks in one: money goes in tax-free, grows tax-free, and comes out…Solo 401(k) for side gigsIf you run your own business, you can save for retirement as both boss and worker. In 2026 you can put in up t…
Browse all 97 strategies in the interactive playbook
Educational summary, not tax advice. Limits and rules change — confirm current law with your tax adviser.