HiddenChar t1_iydos9e wrote on November 30, 2022 at 5:08 PM

There is an IRS limit but other than that, technically yes. 15% gain which people recommend going max every time if you can.

helpdesk-26 OP t1_iydp120 wrote on November 30, 2022 at 5:10 PM

All I lose out on is having access to the money for 6 months ?

Is there an easy way to calculate if it’s worth it from a tax standpoint ?

HiddenChar t1_iydpyox wrote on November 30, 2022 at 5:16 PM

yep, youll mainly have a smaller paycheck for 6 months and if youre over the limit, the overpayment will get refunded in the next paycheck.

I am not a tax expert but I think any gains will be treated as normal income like normal stocks

bulldg4life t1_iydr1tw wrote on November 30, 2022 at 5:22 PM

You're contributing after tax money to the ESPP so you would only pay capital gains on the money above and beyond your contributions. So, you won't actually make 15% but even at the highest tax brackets, you're only paying 37% of the difference to taxes.

I max my ESPP out and sell it immediately and have been doing that for the past 6 years. It's even better if there is a look back period and the stock has gone up appreciably.

MikeWPhilly t1_iyeazt5 wrote on November 30, 2022 at 7:30 PM

We are a a progressive tax system. It is always worth it to make more. People need to stop making this statement because it’s essentially an old wives tales. And it’s not so much about you but just I see this comment far to often.

As to the money yes ESPP programs are always free money and you should always max it out if you can afford no access to that income for the 6 month period. I just autosell it. Only time in your life besides, 401k match, that people will hand you free money.