I receive RSU every year and a portion vests every year. What is the best way to manage the tax implications on these? I tried moving it to 401k to avoid taxes but was told I could not do that. What do most people do with these?

like
Posting as :
works at
You are currently posting as works at

I used to pay taxes when they vested. And manage your tax burden better - bigger mortgage, charities, dependents

Presumably it’s more than IRA contribution limits, but can you transfer in kind to that?

What’s that?

What taxes are you trying to avoid?
Vesting RSU are taxed as compensation and generally deposited net (ie your firm withholds enough to pay tax). If you want to get them gross of withholding you’ll still have to pay income taxes the following year so you’ll have to set aside cash to do that.
The only other tax you may have to pay is from the gain from the cost basis at which shares are deposited and the price you sell them.
Can’t avoid the taxman... :)

Do you have a black-out period for the vested RSUs? What’s your vesting schedule? Prior to receiving the value paid as stock (also cash), you will need to settle-up on the tax due. This is because your restricted stock units are often taxed when they vest. The amount that is taxable to you (as compensation income, which is potentially subject to Social Security and Medicare tax), is equal to: (Number of Vested Units) x (Fair Market Value of the Stock) = Compensation Income. To cover this income tax need, you could consider some of the following options when your restricted stock units vest:
Net Exercise – A net exercise allows BOAML to withhold the number of units required to meet the pending tax bill prior to delivering the remainder to you.
Cashless Exercise – In a cashless exercise, you immediately sell some of all of your shares of restricted stock units. If you choose to sell only enough to cover the tax bill, it is often referred to as a sell-to-cover. If you sell all your vested shares, it is commonly referred to as a same-day sale.
Cash Exercise – A cash exercise means that you pay BOAML the amount of cash required to cover the tax bill at the time of exercise. This results in your retaining the maximum number of shares.
Don’t assume that just because BOAML may automatically withhold a percentage to cover taxes, that this is sufficient to meet your total tax need. You may still owe additional tax at the end of the year, pending your specific tax returns.
Know your tax situation (Fed, State and local) so you can plan for the tax due if any. In fact, knowing a tax may be due may be a reason to make an estimated tax payment in the quarter the restricted stocks units vest. Again, it may make sense to work with a CPA (and me :) who can help you work through the numbers. Each tax situation is different, and without knowing your situation, I can only share the concept, not make a recommendation.

Thank you so much for the detailed explanation. You have given me much to think about. I think the shares vest at 50 a year and taxes get taken out when they vest.

Related Posts

Best credit cards to gain travel rewards? Looking to find benefits I can use on plane tickets or hotels

like

Seems like the AH market is going to find a reason for these overvalued tech stocks to miss expectations somewhere, somehow. Fortunately had bearish positions on SNAP TWTR AAPL BABA. Wish I'd picked up some VIX! So what does tmw look like?

like

Does anyone have experience creating a NY LLC? Is it better to create one in Delaware if I’m NY based? Do you have to file anything annually? What if the LLC had no income?

like

Looking to invest -> was thinking to get a CD from Chase at 3% APY for 12 months and a IBond at 6.89%. Has anyone gotten a treasury bond before? is it FDIC insured? Any other suggestions are welcome

likehelpful

How much do you let a stock’s price fall before you sell your shares? 10% price decline enough?

Any suggestions on stock purchases for long term(10-15 yrs)

like

Anyone tried to withdraw their PF?

Just a quick question - to choose old tax regime I have to select "with exemption/deductions"

like

I live in Virginia and looking to buy rental/investment property. The barrier to entry in the renal market in Northern Virginia is high so I am looking at other cities/states with properties priced at 100-150K with a cap rate ranging from 8-9%. I am looking at Michigan or Ohio right now but open to other states/cites

like

How do you balance wanting to sell higher-priced properties with the thought of them not selling because of how much they’re worth?

like

Freelancers: What do you do for health insurance?

likehelpful

Morning ! Just setup a coinbase pro account yesterday but I got the trading prohibited message . Does anyone know whats going on?

like

Hello Fishes,
First time coming under tax bracket.
Can someone help me how to design my investments and other stuff so that i can save taxes?

1.I dont have seperate insurance till now.
2.I have mutual fund investments but not ELSS
3. I dont have any loans

Post Photo
like

I have two job offers, 1.) Low to Mid size healthcare firm, privately held, Senior Financial Analyst role working on physician compensation, $90k base, no bonus, or 2.) Temp to hire postion with McKesson, 3 to 6 month contract, high probability of leading to a full-time role as a Financial Analyst, $41 an hour, high probability of earning a senior role within a year. Base range for a full-time offer should range between 90-100k, but definitely taking a risk.

Any thoughts?

like

Bowl to discuss investment strategies, how and where to invest

Has anybody interviewed with Guidehouse? Have an interview with their healthcare team and I’m wondering what the case would be like?

like

Has anyone taken part of the education reimbursement program? I’ve been here for 4 years and I’m thinking of obtaining my Master’s in Organizational Leadership, but I feel like with this merger, if I started the program and then there are layoffs or too many new hires, or work just becomes overwhelming, I wouldn’t be able to complete my program. I’m already wearing multiple hats when it comes to work. Does anyone have insight on how it works/what it’s like? Thanks in advance!

like

I've been super unhappy the past few months and I'm not sure how to get past it. I don't think I'm depressed. Just very unhappy with life right now and it's seriously affecting my work and day-to-day life.

On paper I have a lot of things that I thought would have made me happy. I got into a deferred M7 program, I'm over $500k liquid because of inheritance, I'm nearby my parents, and a few of my college friends moved to the city I'm currently working in.

like

More Posts

Hi Fishers,

Need your help.
Capgemini has not paid me incentive in my fnf. Now my manager is saying you were not "eligible" for it.
What should I do? Any escalation point who can help me here??
Capgemini

like

Anyone else feeling brain dead every day? 😩

like

If you were in a private company assistant controller position being offered $10k more to switch over to public and much better PTO days and fully remote as opposed to an in office position that I’m currently at in a Real estate growing company. Would u do the switch back to public (left public just recently)?

like

I currently do lots of portfolio operations work as an MC but am looking to change companies. Am I better off going to a fund or staying in consulting?

like

Dear All,
I'm looking for job opportunity as system administrator. I'm any opportunity please let me know. Thankyou
YOE: 6.5

like

I did travel nursing many years ago and really started craving stability. Now, I'm considering going back to it, but I know a lot of people are. Do you think it's worth it? How do you manage with the lifestyle changes? I'm not as young as I was. Thanks

like

8.1 YOE as a business analyst, 2 offers IQVIA -20lpa and wipro -24 CTC, got 45 days remaining before joining. Should i expect higher offers? Around 30?or stop looking for it?or should i ask for revision in offer from IQVIA?

like

Recently saw an article stating that in China real estate seems to be booming. Has anyone here ever made the transition to an international market?

like

Anyone hiring for strategic account manager, or AE/SaaS Sales roles?

Any guys in here looking to date. DM me 😊

like

Will the decision on internships getting cancel affect the full time employment?

like

You receive Najee Harris and Brandin Cooks (need receiver, ok at RB) while I get Dameon Pierce and Breece Hall from you.

Would you trade?

like

PwC fishes, is anyone willing to chat about the Digital Products activation and customer success group? I am interested to know about
1. What types of products being developed and implemented?
2. The different types of roles such as activation manager vs
Customer Success & Activation Strategy Manager?
3. The compensation range for an experienced hire manager

Thank you.PwC

like

Wait for a dip for buy bitcoin now?

like

Hello all,

I’m a recent graduate of masters and currently have 2 offers in my hand.

1) One with CITI Bank with 100k salary and no sign on bonus and as it is in my home town as I stay with my family needs no relocation bonus required.

2) This is with American Airlines in Dallas Fort Worth which offered 100k + 10k bonus + 18k relocation bonus (required)

Which ofer should I consider given I’m a new graduate and this is going to be my first job. Any suggestions will be greatly appreciated.

like
like

Hello Everyone
I have three years of work experience in SAP ABAP in one of the Big4. I am currently looking for a job change. I am an immediate joiner.

Can someone refer me to open positions in Deloitte USI or EY in Mumbai location?
Thanks.

How do hours compare across firms? Not sure I’ve seen a definitive take on that.

likehelpful

Curious to know bonus Payout in Life science!
I received 700 Annual bonus!!! I was surprised to see such low bonus!

like

This week Deloitte Comp announcement .. curious to see how this bowl gets filled up

like

Additional Posts in Finance

Let’s say someone cracks your iPhone screen. It’s not absurd to ask them to cover the cost to fix it at the Apple store right? ... the other person works in finance and clearly has enough money

like

What is your hottest take?

like

Favorite work appropriate jokes. Go!

like

What’s the name of those dress pants that look like slacks but feel like workout pants?

like

I recently graduated with a bachelors in finance, and have recently got hired (5 months ago) as a financial analyst. Realistically I do FP&A for a company. I have realized I am not a huge fan of doing non stop spreadsheet all day. Am thinking I’d enjoy my career more by becoming a financial planner and getting my CFP certification. Maybe in the future opening up my own firm. Any advice on what career move to make next in order to accomplish this? CFP requires 3 years of relative experience.

like

How did you guys become good at Excel? Did you utilize youtube to learn, please share your thoughts 😀

like

Am I crazy for loving banking? You all are making me think so.

like

I have two job offers, 1.) Low to Mid size healthcare firm, privately held, Senior Financial Analyst role working on physician compensation, $90k base, no bonus, or 2.) Temp to hire postion with McKesson, 3 to 6 month contract, high probability of leading to a full-time role as a Financial Analyst, $41 an hour, high probability of earning a senior role within a year. Base range for a full-time offer should range between 90-100k, but definitely taking a risk.

Any thoughts?

like

Thoughts on leaving bb sell-side equity research role after a few months for a top 15 b-school? Previously was on the buyside for 5ish years after undergrad. My ultimate goal is to work at a more of a boutique-y type firm on the buyside in vc/growth equity investing.

like

What's your relationship like with your MD? Gotta brag - my MD is awesome.

like

Does watching the west world make you feel to quit the job?

like

What's the most common lie we hear from MDs?

likeuplifting

What's everyone up to tonight?

like

Congrats all CFA L1 winners

like

Is Deutsche still all f’d up?

likehelpful

On a level of 1 - 10 (10 being the highest), how stressed are you right now and why?

like

How often do you grab lunch/coffee or casually talk to coworkers in your office? No one does anything together here, and barely even leaves their cubes to talk to each other unless necessary. It sucks

like

Any resources out there for venture capital case studies?

like