Employee Stock Purchase Plans

Rastiln is talking about RSUs, not options, though. I’m not an expert on RSUs in general, but my RSUs have always been taxed as ordinary income in the year that they vested.

ETA: I sell all company stock ASAP, so any capital gains/losses are minimal in my case.

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Well, it’s 2 things (forgive me, never had this situation before), I am discussing RSUs at this moment of the thread but following I’ll be doing the normal ESPP/ISO which will be a statutory stock option.

Still waiting to get details but I’m considering slamming $25k/year into it and selling everything when it reaches 12 months. Annoying at tax time but it’s basically another 401k match with less tax sheltering, and available faster.

Also, HR hates me. I have them researching if we can use 83(b) elections to pay the taxes upfront on the RSUs… don’t think I will but actuaries aren’t known for being uninterested in financial details.

THis.

For example: 100 RSU shares are granted (not “gifted”) in 2020 but vest 25% each year from Year + 1 through Year + 4 (or whatever vesting schedule you are granted)

So included in your ordinary income in 2021 through 2024 are the value of the 25 shares that vested each year, which vest at the value the stock is on the day of vesting, which could be more or less than the value it was on the day of the grant.

Any RSU I have ever gotten was settled in cash, not in actual shares of stock, and I had no choice to take them as stock.

This is precisely my understanding, you pay tax like income when it is vested (which for us is sadly all in the same year). Unless, apparently there’s an 83(b) option to pay it prior to vesting, but that seems too complicated, especially if I leave the company.