Restricted Stock Units vest as ordinary income. Strategic timing of sales, pairing with charitable contributions, and tax-loss harvesting can significantly reduce the tax impact.
Consider the 83(b) election for restricted stock (not RSUs). Pair RSU income years with large deductions. Sell immediately at vesting to avoid double taxation risk.
Holding RSU shares after vesting creates concentration risk AND additional capital gains exposure.
Qualified Small Business Stock (QSBS) under Section 1202 allows founders, employees, and investors to exclude up to $10 million (or 10x basis) in capital gains when selling stock held for more than 5 years.
A founder who sells $10M in QSBS stock pays $0 in federal capital gains tax — saving $2,380,000 vs. the 23.8% long-term rate.
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Book A Free Strategy Call to UnlockIncentive Stock Options qualify for long-term capital gains rates if held correctly, but the spread at exercise is an AMT preference item. Strategic exercise timing minimizes total tax.
An executive with $1M in ISO spread who exercises in a low-income year and holds for 12 months pays 20% long-term rates vs. 37% ordinary income — saving $170,000.
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Book A Free Strategy Call to UnlockNon-qualified deferred compensation plans allow highly compensated employees to defer a portion of salary or bonus to a future date, deferring income taxes until distribution.
An executive deferring $200,000 of bonus income at a 37% rate saves $74,000 in current-year taxes. If distributed at a 24% rate in retirement, permanent savings of $26,000.
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Book A Free Strategy Call to UnlockExecutives and highly compensated employees can defer a portion of their compensation to future years, deferring income tax until the funds are received — typically in lower-income retirement years.
Deferring $200,000 in bonus income from a 37% bracket to retirement at a 24% bracket saves $26,000 in taxes on that deferral.
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Book A Free Strategy Call to UnlockR&D credits are a dollar-for-dollar tax credit — not just a deduction — and apply to software development wages.
NOL carryforwards from startup losses can offset future profitable years indefinitely.
Qualified Small Business Stock (QSBS) under §1202 can exclude up to $10M in gains from federal tax.
This write-off is commonly used by the following taxpayer profiles. Click to see all strategies for your situation.
