Calculate the after-tax value of stock options (NSOs) and RSUs from your employer.
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NSO spread = (Current price - Strike price) × shares. Tax = spread × ordinary income rate. RSU ordinary income = shares × FMV at vesting. Hold 1+ year for long-term capital gains rates on future appreciation.
RSUs are taxed as ordinary income when they vest (at FMV on vest date). If employer withholds at 22%, high earners may owe more. Sale triggers capital gains.
ISOs (Incentive Stock Options): taxed as capital gains if held 1 year post-exercise and 2 years post-grant. NSOs (Non-qualified): taxed as ordinary income at exercise.
Early exercise + 83(b) election starts capital gains clock. Beneficial if stock is early-stage (low FMV). AMT risk for ISOs. Get a financial advisor for large grants.
File 83(b) within 30 days of early exercise to pay tax on current (low) value vs future (higher) vest value. Missing 30-day window forfeits the benefit permanently.
Use Black-Scholes for option value or intrinsic value (Stock Price - Strike Price). For early-stage startups, use recent 409A valuation with heavy discount for illiquidity.
Calculations are for educational purposes only. Consult a qualified financial advisor for personalized advice.