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 — and if you hold startup stock, see how much of the eventual exit gain QSBS can make federal-tax-free.
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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