Stock option and RSU tax planning

Hack Your Wealth

#73: One big reason the tech industry attracts a lot of talent: you get partly compensated in stock, and if you’re early enough at a company that IPOs, your stock options or RSUs can make you a millionaire multiple times over when the company goes public.

Google created >1000 millionaires at IPO. Facebook too. Microsoft has created >10k millionaires. Amazon probably even more.

But with stock compensation, your taxes can quickly get complicated. You need thoughtful tax planning to make sure you don’t pay more in taxes than needed. As with other types of income, what matters isn’t what you earn – it’s what you keep.

So this week, I spoke with Shane Mason, whose CPA firm specializes in advising entrepreneurs and tech workers, to share tips and strategies on stock option and RSU tax planning.

We discuss:

• The different types of stock-based compensation and tax regime applicable to each
• Deep dive on Incentive Stock Options + AMT + AMT “refund” rules
• How an 83(b) election works, and pros/cons of doing it
• Key tax planning strategies applicable to stock compensation (e.g. timing strategies, optimizing tax buckets)

Check it out here:

https://hackyourwealth.com/stock-option-rsu-tax-planning

Do you earn stock-based compensation? What tax planning best practices have you followed? What do you want to know more about when it comes to stock tax planning? Let me know by leaving a comment.
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Links mentioned in this episode:

• Brooklyn FI
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Intro/Outro: Old Bossa by Twin Musicom.