The big picture
The Equity Comp Tax Map
Every tech worker with equity walks the same road — from the day you’re granted shares to the day you retire. At each stop, a different tax shows up. Here’s the whole journey on one page, with the free calculator for every step.
Step 1
It starts with an offer
You sign on and get equity — RSUs, ISOs, or NSOs. No tax the day you’re granted, but almost every choice from here has a tax bill attached.
New to all this? Start with the basicsStep 2
Your RSUs vest
The day shares land in your account, their value is taxed as income — and your employer usually withholds too little. This is where the surprise April bill is born.
Step 3
A cash bonus lands
Bonuses are withheld at a flat 22%. If your real tax rate is higher, the gap shows up as money you owe later.
Step 4
You exercise stock options
Turning options into shares can trigger ordinary income (NSOs) or the Alternative Minimum Tax (ISOs). Run the numbers before you click “exercise.”
Step 5
You sell shares
Your broker often reports a $0 cost basis — taxing money you already paid tax on at vest. Catch it before you file, or pay twice.
Step 6
Stay ahead of the IRS
Big equity income can mean you owe quarterly — or you can cure it with a single W-4 tweak. Either way, dodge the underpayment penalty.
Step 7
Get your AMT back
If an ISO exercise cost you AMT, that money isn’t gone — it returns over future years as a credit. See when your balance hits $0.
Step 8
You move states
California doesn’t stop taxing your old vests just because you left. See exactly what each state still claims after a move.
Step 9
Build tax-free wealth
Once the comp tax is handled, route the surplus into the Roth space most high earners don’t realize they have.
Not sure where you are on the map?
Most people start at their next vest or a sale they’re about to make. Pick the calculator that matches what’s happening this month.
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