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Withholding & estimates
RSUs
The RSU tax traps that hit in April, and how to dodge them
The flat rate your company withholds at vesting is almost always lower than what you owe, and that gap is just the first of the RSU traps. This is the complete field guide: the withholding gap, estimated taxes, the double-taxed 1099-B, short-term gains, blackouts, wash sales, acceleration, and the private-company bill on shares you cannot sell.
Sell at vesting or hold? The complete RSU decision
Sell at vesting unless you can name a real reason to hold. This is the whole decision, start to finish: the default, how to fund the tax, when holding earns its keep, how to diversify a pile you already have, and how to give shares away without paying gains.
How RSUs are taxed
RSUs are taxed as ordinary income the day they vest, then as capital gains on anything they earn after that. The trap is the gap between what your employer withholds and what you actually owe, and on a big year it pulls in surtaxes and quarterly payments too.
Case study: a full vesting year at a public company
An engineer with a large RSU year, and the tax bill nobody warned her about.
2026 RSU supplemental withholding rates
The flat supplemental rates that apply to your 2026 vests, and why they often under-withhold.
How to read your W-2 and 1099-B for RSUs
The vesting income already sits in your W-2. The basis column on your 1099-B is the one you have to correct yourself, or the same dollars get taxed twice. Here is every number, where it lives, and a full vest worked start to finish.
RSU withholding gap calculator
See how much your company under-withheld on a vest and what to set aside before April.
RSU net shares after withholding calculator
Estimate how many shares you actually keep once taxes are withheld at vest.
How RSUs are taxed at an IPO
An IPO can detonate years of double-trigger RSUs into one tax year. The income stacks, the withholding falls short, and the bill arrives while the stock is still locked up.
RSU tax estimator
A simple way to estimate the tax on a vesting year and the shortfall your withholding leaves behind. The interactive version is on the way.
RSU sell-or-hold after-tax calculator
Compare selling at vest against holding, after tax and after concentration risk.
Case study: holding RSUs through an IPO
Double-trigger shares all settle at once, and a six-figure tax bill lands in one quarter.
NSOs
How NSOs are taxed: the bargain element and everything after
The spread between the stock price and your strike at exercise is ordinary income, taxed like salary that year. Then the shares are just stock. This is the whole NSO tax picture: the spread, the payroll surtaxes, the withholding gap, your real basis, and the capital gain after.
NSO exercise strategy: when to exercise, hold or sell, and the moves around it
The one lever an NSO hands you is the calendar. This is the whole playbook: when to exercise, whether to hold or sell, how to spread it, how to fund the tax, and how to give the shares away.
Case study: a large NSO exercise in one year
A director exercises $300k of spread at once, gets surprised by the bracket math, and learns the lever was the calendar all along.
NSO traps: the double-counted basis, the cash bills, and the deadlines that kill grants
The expensive NSO mistakes are quiet ones. The double-counted 1099-B basis taxes you twice, under-withholding ambushes you in April, illiquid stock owes cash you can't raise, and two deadlines erase winning options. Here is all of it.
Reporting NSOs: your W-2, your 1099-B, and the basis fix
The spread lands in your wages on the W-2, the sale shows up separately on the 1099-B, and the basis is the link between them. Read them as one story, fix the basis on Form 8949, and you pay tax once instead of twice.
NSO exercise calculator
Estimate the spread, the tax, and the cash you actually need to exercise, in four numbers you can do on a napkin.
Case study: an advisor's NSOs taxed on a 1099
No employer withholding meant the entire tax bill on the spread came due at filing, with nothing set aside.
ESPPs
Hybrids & more
How SARs and phantom stock are taxed
Cash-settled equity looks like stock and gets taxed like salary. The whole payout is ordinary income the day it lands, there is no capital gains door, and the only real lever you have is timing.
A phantom stock payout at a private company
An executive watched her phantom units pay out at a sale, then learned the whole check was wages. A walk through what landed, what was withheld, and what she owed.
When cash-settled equity beats real shares
Real shares win on taxes almost every time. So why take SARs or phantom stock, and once you have them, how do you plan a payout you mostly cannot control?
How SARs and phantom stock show up on your W-2
Both land in your wages, taxed like a bonus, and the withholding usually falls short of what you owe.
Case study: a SAR payout at a private company
Cash settled at a tender offer, taxed entirely as ordinary income, with a withholding gap that landed in April.