It can be difficult to take full advantage of your stock options, but doing so can have many rewards. In order to help you make the most out of your financial planning in association with stock options, we are providing you with the following 10 rules.

Rule 1: Have a Plan - The rules that are associated with stock options can be very complex and you will need to keep track of the options over the course of time. Failing to follow through can result in your losing the ability to cash in on the options at some point in the future. On an annual basis, you should review your stock options and come up with a plan for the following year. Be sure to take action.

Rule 2: Setting Goals - As is the case with anything associated with financial planning, it is important for you to set goals. In setting goals for stock options, you may want to consider how many options you are going to purchase and any other options that you may take advantage of throughout the year. Setting both short-term and long-term goals will benefit you more fully.

Rule 3: Understand Your Options - Many of us who have options do not fully understand what we have at our disposal. This can make it difficult, especially when it comes to claiming them on our taxes. It is always best to have the help of a qualified CPA to assist you with that process.

Rule 4: Wait before Exercising - Although it may be tempting to exercise your options immediately, doing so may not always be of the greatest benefit to you. If it looks as if your company is doing well and you can expect the stocks to increase in value, it may be beneficial for you to wait to exercise them at a future date.

Rule 5: Exercise Quickly - In direct contrast to rule 4, there are also times when it is to your benefit to exercise the option quickly. This may be in association to the guidelines that your company has with stock ownership. You may also want to take the money and invest it elsewhere. One other reason why you would want to exercise the option quickly is if you are working for a company that tends to be volatile, and there is a possibility of the stock dropping in price.

Rule 6: Don't Keep Secrets - You should fully understand the rules associated with your stock options, including what would happen if you should leave the company or if you should die. Make sure that your family is aware of your stock options and what is available, should the unthinkable happen.

Rule 7: ISOs and AMT - If you have incentive stock options (ISOs), it is important for you to understand a potential tax trap in regards to capital gains, if you plan on holding the option for a year. Familiarize yourself with the alternative minimum tax (AMT), which may have an impact on your taxes. Since these rules can be rather difficult to navigate on your own, contact us for additional assistance in filing your taxes.

Rule 8: Brackets - As stock options can change your taxable income, it can also throw you into another tax bracket. It is important for you to watch this throughout the year and to talk to a qualified CPA, who can help you to avoid this potential trap.

Rule 9: Vesting - Although some companies will allow you to exercise your options immediately, you may also be vested, according to your plan. You should familiarize yourself with this possibility and keep an eye on vesting so that you can make the most out of your investment.

Rule 10: Get Help - Throughout this article, we have made no secret of the fact that it is often necessary for you to get qualified help. You can contact us for more information about your stock options and how they can benefit you, provided you make the right decisions.