Incentive Stock Options (ISOs) are a type of employee stock option that allows workers to purchase shares of their company's stock at a predetermined price, known as the exercise price. These options are typically granted as part of an employee's compensation package and can provide significant financial benefits if the company's stock price increases over time. One key advantage of ISOs is their favorable tax treatment. If certain conditions are met, employees can pay taxes on the profit only when they sell the shares, rather than when they exercise the options. This can lead to lower overall tax liability compared to other types of stock options.