💰 Did you know that Restricted Stock Units (RSUs) are taxed as ordinary income? Understanding this could save you from unexpected tax surprises! 🚨
In today’s competitive job market, RSUs have become a favored way for companies—especially in tech—to attract and keep talent.
But here’s the catch: when those RSUs vest, their value is treated as taxable income at your ordinary income tax rate.
That means if the stock appreciates, you could face a hefty tax bill that doesn't always match your cash flow. 😲
When RSUs vest, the total value of the shares on that day is subject to taxes—100% of it!
Unlike Incentive Stock Options (ISOs), which may offer favorable tax treatment under certain conditions, RSUs require you to pay taxes immediately, which can be a shock if you're not prepared.
Timing is everything! Stock price fluctuations can impact your tax liability, leaving you potentially cash-strapped when tax season rolls around.
If the stock skyrockets, you might owe more than you can afford to pay without selling some of your shares. 📉💸
Planning is key! Whether you decide to sell some shares right away to cover your tax bill or hold out for long-term gains, understanding the tax implications of your RSUs is essential for your financial strategy. 🗂️💡
Want to dig deeper into how RSUs are taxed and how to navigate this complex landscape?
Tune into our latest podcast episode for all the insights! 🎧✨
#RSUs #TaxPlanning #EquityCompensation #FinancialLiteracy #PodcastEpisode
Follow for more!
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Listen to the full episode here:
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YouTube:
https://youtu.be/CgQZW0Ma8kg
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Audio Podcast:
https://www.techequityandmoneytalk.com/rsus-and-equity-compensation/
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