Your equity pays you in pieces, on a schedule, with tax rules that change by type. We help you see the whole picture and plan around it, with your CPA.
This page is for software engineers, engineering and product managers, directors, and leaders at public tech companies and pre-IPO startups. Your pay probably comes in several forms: salary, bonus, and equity compensation (company stock, or the right to buy it, given as part of your pay).
Each form is taxed differently, and the pieces rarely fit together on their own. Our job is to put them into one coordinated plan with the rest of your finances. Most of our clients earn $200,000 or more.
When RSUs vest, their value is generally taxed as ordinary income, like salary, and appears on your W-2. Your company usually withholds tax by keeping some of the shares or taking cash. That withholding often uses a flat rate that can be lower than your actual tax bracket, which is one reason people owe more when they file.
How long you hold the shares after you buy them changes how the discount and any gain are taxed. The rules are detailed, so we model the choices with your CPA before you decide.
NSOs are generally taxed as ordinary income on the gain when you exercise. ISOs are not taxed as regular income at exercise, but the gain can trigger the AMT (alternative minimum tax), a parallel tax calculation that affects some high earners. Spreading exercises across tax years can change the result.
At a pre-IPO startup you may also hear about two other terms. An 83(b) election is a filing that lets you choose to be taxed on restricted stock when you receive it, rather than as it vests. The deadline is 30 days from the grant, so ask early. A tender offer is when the company or outside investors offer to buy shares from employees before an IPO.
Want the deeper tax detail? Read RSUs, ISOs, and NQSOs: The Difference That Actually Matters at Tax Time.
If you work there, the same company pays your salary, drives your bonus, and sets the value of your shares. A rough stretch for the company can hit all three at once. That is a risk to understand, and not a reason to act on a hunch.
We do not tell you to buy, sell, or hold any specific stock. We help you decide how much of your net worth you're comfortable having tied to one company, then map out the ways to get there and the tax cost of each. Common approaches include setting a target percentage, selling shares on a schedule as they vest, or giving appreciated shares to charity. Each has trade-offs.
This work sits alongside our investment management, where we build the rest of your portfolio around your goals.
Compare offers on total pay, not just salary. Private company equity can be hard to sell, so its value is less certain than shares of a public company.
Unvested RSUs and options are usually forfeited when you leave, and vested options often have a limited window to exercise. Severance (pay your employer gives when your job ends) can change your taxes for the year. A plan made before you need it makes a hard moment easier.
A backdoor Roth is a way to put money into a Roth IRA when your income is too high to contribute directly. A mega backdoor Roth uses after-tax contributions to a 401(k), if your plan allows them, and moves that money into Roth savings. Whether either one is available or sensible depends on your plan and your tax picture.
We do not prepare tax returns or replace your CPA. We build the plan, estimate the tax effect of equity events, and, with your permission, share those numbers with your CPA so the two of us work from the same page. Your CPA confirms the tax treatment and files your return.
This page is for general education only. It is not personalized investment, tax, or legal advice. Tax rules change and depend on your situation, so coordinate with your CPA before acting. See our disclosures.
Start with the checklist, or talk it through on a free 30-minute call.