These include white papers, government data, original reporting, and interviews with industry experts. When you get an RSU from your employer, it's just like getting salary from your employer. This is known as your vesting date, and from this point forward you own your stock restriction free. Payments are estimates of how much you will owe when you prepare your tax returns for that year. For the next 5 years, Bobs taxes arent impacted by this arrangement in any way. By accessing and using this page you agree to the Terms of Use. This is because the stocks appear in your brokerage account. Lets dive into the four (4) unique RSU tax strategies to consider in 2022. Due to the fact that you do not technically own the shares yet, there will be no tax consequences. One question that comes up from time to time is: Can my vesting RSUs trigger a wash sale? ", Govinfo.gov. RSUs or Restricted Stock Units work a little differently than traditional restricted stock. If youre scratching your head wondering what exactly you own and how its taxed, youre not alone. Intuit, QuickBooks, QB, TurboTax, ProConnect, and Mint are registered trademarks of Intuit Inc. Compared to these other forms of equity compensation, RSU taxation is pretty straightforward but does have a few unique characteristics everyone needs to understand. If the value of the stock increases between when it is granted and when you become vested, using Section 83(b) can save you massive amounts of tax money. Charitable giving is the same. If you get a larger refund or smaller tax due from another tax preparer, we'll refund the applicable TurboTax Live Full Service federal and/or state purchase price paid. When RSUs are issued to an employee or executive, they are subject to ordinary income tax. If and when you decide to sell your stock later, you will owe tax based on whether you held the asset for a short or long period of time. Your employer will sell some of the RSUs at the time of vesting and apply the amount sold to income and payroll taxes.
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