Equity Compensation Tax Services

It can. The difference between the fair market value at exercise and your strike price (the bargain element) is an Alternative Minimum Tax preference item, even though it is not regular taxable income until you sell. We model your AMT before you exercise so you know the cost, and we plan the share count and timing to manage it. The AMT you pay can also generate a minimum tax credit that comes back in later years on Form 8801.

RSU vesting income is usually withheld at the 22 percent federal supplemental rate, but a large vesting year can put you in the 32 to 37 percent bracket. That gap is not withheld automatically, so it comes due at filing. We calculate the shortfall and set up estimated tax payments so you are not surprised in April or hit with an underpayment penalty.

Possibly, and this is one of the most common and expensive equity-comp errors. Brokers often report only what you paid for the shares, not the compensation income already taxed on your W-2. Without a correction you pay tax twice on the same dollars. We adjust the cost basis on Form 8949 so the income is counted once.

Qualified Small Business Stock under Section 1202 can let you exclude a large portion of the gain when you sell stock in a qualifying C-corporation held more than five years. Founders and early employees frequently qualify without realizing it. We confirm eligibility, track the holding period, and plan stacking and Section 1045 rollovers where they apply.

Yes. States tax equity based on where you worked while you earned it, not just where you live when it vests, so the income can be sourced to more than one state. High-tax states are aggressive about this. We allocate the income correctly across states and avoid both double taxation and underreporting.

An 83(b) election must be filed within 30 days of receiving restricted stock or early-exercising options, with no extensions. It elects to be taxed on the value at grant (often near zero) instead of at vesting, which can save substantial tax and start the long-term capital gains and QSBS clocks. It carries forfeiture risk, so we walk through whether it fits your situation before the deadline passes.