Types of Equity Compensation

Equity income is taxed differently than regular salary and often involves vesting schedules, exercise decisions, and capital gains considerations. These tools focus on clarity and real-world outcomes.

Why Equity Taxes Are Often Misunderstood

Employers may withhold taxes conservatively, and equity events can push income into higher brackets. Understanding after-tax outcomes helps with diversification, timing sales, and avoiding cash shortfalls.

Frequently Asked Questions

Do I owe tax even if I don’t sell my shares?

In many cases, yes. RSUs are taxed at vesting even if you hold the shares. Options may also trigger tax at exercise.

Can equity compensation increase my tax bracket?

Yes. Large vesting or exercise events can significantly increase taxable income in a single year.

Are these calculators a replacement for tax advice?

No. They provide estimates for planning and comparison. Complex equity situations may require professional tax guidance.