RSU Tax Calculator
Calculate your exact tax liability on vesting RSUs. Get federal, state, and FICA breakdowns, optimal withholding recommendations, and sell strategies to maximize your take-home equity compensation.
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RSU Tax Calculator
Calculate your RSU tax liability and optimal strategy for tech equity compensation
⚡ Quick Start: Select your company level to see instant results
Income & Tax Information
RSU Details
How RSU Taxation Works
Restricted Stock Units (RSUs) are taxed as ordinary income at vesting, not at grant. The IRS treats the full fair market value as W-2 wages, just like your base salary. Here's the complete tax breakdown:
Example: 100 RSUs vest at $200/share = $20,000 income
| Federal Income Tax (32% bracket): | -$6,400 |
| California State Tax (9.3%): | -$1,860 |
| Social Security (6.2%): | -$1,240 |
| Medicare (1.45%): | -$290 |
| Additional Medicare (0.9% over $200K): | -$180 |
| Net Take-Home: | $10,030 |
Effective tax rate: 49.85%. This is why mega-vests can push you into AMT or trigger under-withholding penalties.
Common RSU Tax Mistakes (And How to Avoid Them)
✗ Mistake 1: Under-Withholding
The Problem: Employers withhold RSUs at the flat 22% supplemental rate, but you owe your marginal rate (32-37% for high earners). A $100K RSU vest withheld at 22% leaves you owing $10K-$15K extra at tax time.
The Fix: Use our calculator to determine your true rate, then adjust W-4 to withhold extra $$ per paycheck or make quarterly estimated payments.
✗ Mistake 2: Not Diversifying
The Problem: Holding all vested RSUs means you're double-exposed to company risk (salary + stock). If the company tanks, you lose both your job and your savings.
The Fix: Sell at least 50% of vested RSUs immediately and invest in index funds. Your future RSU vests will keep you invested in company upside.
✗ Mistake 3: Ignoring State Tax Implications
The Problem: If you're planning to relocate, timing matters. Vesting $500K of RSUs in California (13.3% state tax) vs Washington (0%) is a $66,500 difference.
The Fix: For mega-vests, consider relocating to TX, FL, WA, NV, or TN before the vest date. Keep detailed move records to prove residency.
✗ Mistake 4: Forgetting About AMT
The Problem: Large RSU vests combined with high deductions can trigger Alternative Minimum Tax (AMT), clawing back some of your write-offs.
The Fix: If you're expecting a mega-vest ($200K+), consult a CPA about AMT exposure and timing deductions across tax years.
Advanced RSU Tax Strategies
Strategy 1: 83(b) Election for Early-Stage RSUs
At very early-stage startups, you can sometimes negotiate to convert RSUs to restricted stock and file an 83(b) election. This lets you pay tax on the initial (low) valuation and convert all future gains to long-term capital gains.
Only works if stock has minimal value. Not available at public companies.
Strategy 2: Donor-Advised Fund (DAF) for Appreciated Shares
If you hold RSUs >1 year post-vest and they've appreciated, donate them to a DAF. You get a deduction for the full market value, avoid capital gains tax, and can donate to charities over time.
Requires holding period and appreciation. Best for large charitable goals ($10K+).
Strategy 3: Tax-Loss Harvesting with Company Stock
If your company stock drops post-vest, sell the losers to realize capital losses (up to $3K/year deductible against ordinary income, unlimited against gains). Then immediately buy an index fund to maintain market exposure.
Wash sale rule doesn't apply if you buy a different security (e.g., sell GOOG, buy VOO).
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