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Understanding Form 3921 for Taxes

  • 1.  Understanding Form 3921 for Taxes

    Posted 02-07-2024 12:06

    Hey Community Members!

    Tax season is upon us, and for those involved in equity compensation, understanding the intricacies of tax reporting is crucial. One such form that often comes into play is Form 3921.

    What is Form 3921? Form 3921 is used to report exercises of incentive stock options (ISOs) by employees, as required by the IRS. This form provides details such as the exercise price, exercise date, the fair market value of the stock at exercise, and any AMT (Alternative Minimum Tax) adjustment.

    Why is Form 3921 Important? For employees who exercised ISOs during the tax year, Form 3921 provides essential information needed for accurate tax reporting. It helps ensure compliance with IRS regulations and helps individuals calculate their tax liabilities correctly.

    How to file Form 3921? You can file Form 3921 either by mail (deadline: February 28) or online (deadline: April 1). There are three different copies required to file. You'll need to:

    • File copy A with the IRS, either electronically or by mail

    • Give copy B to the employee who exercised options

    • Keep copy C for your company's records

    How Can Carta Help? To simplify the process of handling Form 3921, Carta offers comprehensive support and guidance. Check out Carta's Form 3921: Guide for Admins for step-by-step instructions on how to navigate the Form 3921 process within the Carta platform. Whether you're a seasoned equity holder or new to the world of stock options, Carta's resources are here to assist you every step of the way.



    If you have any questions or need further assistance, feel free to reach out here on Carta Community or consult with a tax professional. 

    Happy filing!

    Hannah Givens