How To Avoid Tax Surprises and Penalties On Your RSUs and Stock Options

Don't get caught owing a bunch of money to the IRS & paying extra in penalties & interest! Whether you have restricted stock units (RSUs), non-qualified stock options (NQSOs), or incentive stock options (ISOs), you'll definitely want to pay attention to the tax consequences that come with each form of equity compensation.
In this video, we cover everything you need to know so that you are fully prepared when it comes to tax time.
0:00 Intro
0:30 How company withholdings work
1:46 Gotcha #1: RSUs
3:01 Gotcha #2: Selling stock
3:48 Gotcha #3: NQSOs
5:23 Gotcha #4 & 5: ISOs and AMT
8:19 Underpayment & the penalty
9:09 Figuring taxes owed
13:50 Safe Harbor rules
15:45 Adjusting withholdings
16:32 Paying quarterly estimated taxes
17:20 State taxes
17:53 Outro
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#stockoptions #rsu #personalfinance #taxplanning

[@ParabolicGains]

Great video, I've got a new client at a tech firm so was looking to upskill on this topic.

[@Maloha486]

Let's say I have RSUs; they vest and I don't sell right away, then the stock price goes up, does compound interest kick in or no?

[@LostMoney-sx4sr]

In your RSU and NQSO examples, where exactly does the $11k of tax liability get 'withheld' from??

[@JavaWealth]

Most commonly, the stock plan provider will do a "sell to cover", meaning they'll automatically sell enough shares to raise the cash and the remaining shares will go to you. So if 1,000 RSUs vest, the number that will hit your brokerage account will look closer to 600-700 shares after all the different taxes are withheld. NQSOs are usually handled the same way.