83(b) Election
An 83(b) election is a tax strategy that lets you pay income tax on restricted stock or options at the time of grant – when the value is low – rather than at vesting, when it may have grown significantly. You have just 30 days from your grant date to file, making it one of the most time-sensitive decisions in equity compensation. For startup founders and early employees, acting on the 83(b) election early can mean the difference between paying taxes on thousands of dollars versus millions. Read the articles below to understand how the 83(b) election works, who should file one, and how to avoid costly mistakes.