Service — Equity Compensation

If your comp has more letters than your last paycheck.

RSUs, ISOs, NSOs, ESPPs, RSAs, 10b5-1 plans, AMT, the 83(b) election, the qualifying vs disqualifying disposition. Equity compensation is one of the most tax-complex areas of personal finance — and most advisors aren't trained in any of it.

Book a free intro call

For Tech & Corporate RSU / ISO / NSO / ESPP AMT Modeling Mega Backdoor Roth

A Specialty Area

Equity compensation is one of Golden Acre's specialty areas. As an Enrolled Agent with an active fee-only RIA practice, Aaron works directly with tech and corporate professionals in Scottsdale, Phoenix, and remotely on every part of the equity comp picture — from the grant to the exercise to the sale to the tax filing.

The Four Most Common Types

What we plan for, by type

Each form of equity compensation has its own tax treatment, its own planning windows, and its own pitfalls.

Restricted Stock Units (RSUs)

RSUs are the most common equity compensation at public tech companies. They're treated as ordinary income on the vest date, with the full vested value added to your W-2. Most companies withhold at the 22% supplemental rate — which can be lower than the actual tax bracket of higher-income recipients, sometimes resulting in an unexpected tax bill at filing.

Planning around RSUs covers concentration risk (selling at vest vs holding), bracket management across multi-year vesting cliffs, withholding adjustments to avoid the underpayment penalty, and integration with the broader portfolio.

Incentive Stock Options (ISOs)

ISOs are the most tax-advantaged equity comp — and the most likely to wreck your year if mishandled. Exercising ISOs creates an Alternative Minimum Tax (AMT) preference item equal to the bargain element.

ISO planning is about exercising in the right year, in the right amount, with awareness of AMT exposure. We model AMT exactly — including the AMT credit recovery in future years — and structure exercises to capture the long-term gain treatment without unintended AMT bills.

Non-Qualified Stock Options (NSOs)

NSOs trigger ordinary income on exercise, equal to the spread between strike price and fair market value. Unlike ISOs, there's no AMT exposure and no holding-period requirement for ordinary income treatment — but also no qualifying disposition opportunity.

NSO planning is about timing the exercise to manage the tax hit, generating cash to pay the tax, and deciding whether to hold post-exercise for long-term capital gains.

Employee Stock Purchase Plans (ESPPs)

ESPPs let you buy company stock at a discount (typically 15%) using payroll deductions. The lookback feature, where it exists, lets you buy at the lower of the start-of-period or end-of-period price.

ESPP planning is about evaluating contribution levels, then deciding when to sell. Many participants choose to sell at purchase to capture the discount; others have reasons to hold based on tax-bracket and concentration considerations.

Cross-Cutting Issues

What we plan around

Concentration risk

If 60% of your net worth is in one company's stock, your job and your investments are correlated. We build sell-down plans using 10b5-1 trading plans, pre-set sell rules, and bracket-aware tax management.

AMT & the AMT credit

AMT triggered by ISO exercises generates a credit that recovers in future years when AMT is not the binding tax. Tracking the credit and structuring future income to recover it is part of the multi-year plan.

Mega Backdoor Roth

Many tech 401(k) plans offer after-tax contribution capacity well beyond the standard limit. Converting those dollars into Roth turns your 401(k) into a more tax-efficient retirement engine.

Pre-IPO and tender offer planning

If you're at a private company headed toward IPO or a tender offer, the planning is different. 83(b) elections, early exercise decisions, QSBS qualification under Section 1202, and concentration risk all become live.

Common Questions

Things people often ask

Should I sell my RSUs at vest or hold them?

For many clients, the analysis points toward selling at vest — RSUs are taxed as ordinary income on vest regardless, so holding the shares is similar to using your bonus to buy a concentrated position in your employer's stock. Other clients have reasons to hold, including tax-bracket considerations or stock-grant plan holding requirements. The right answer depends on your full picture.

How is AMT triggered by exercising ISOs?

When you exercise ISOs and don't sell in the same year, the bargain element (FMV minus strike price) becomes an AMT preference item. If your AMT exceeds your regular tax, you owe AMT on that spread — even though you haven't sold the shares. The AMT paid creates a credit recoverable in future years.

What's the qualifying disposition for ISOs?

Sell more than two years after grant and more than one year after exercise. Both clocks must be satisfied. A qualifying disposition gets full long-term capital gains treatment on the entire gain. A disqualifying disposition treats the bargain element as ordinary income.

Can you handle the equity comp filings on my tax return?

Yes, if you engage Golden Acre for tax preparation. As an EA, I prepare returns including Schedule D, Form 8949, ISO AMT calculations on Form 6251, and the AMT credit recovery on Form 8801.

Do I need to be in tech to benefit?

No. Senior executives at any public company, employees of pre-IPO startups, ESPP participants at any company, and corporate professionals with stock-based compensation all benefit. The planning techniques apply across industries.

Start Here

Equity comp questions piling up?

Book a free 30-minute intro call. We'll talk through what you're holding, what's vesting, and where the planning leverage is highest.

Book a free call See all services