Your RSUs are withheld at 22%. You are in the 37% bracket.That gap is why April hurts.

Employers withhold federal tax on RSU vests at a flat supplemental-wage rate, generally 22%, while a household with significant equity income often sits in the 32% to 37% marginal brackets. The difference between what was withheld and what you actually owe shows up as a balance due in April, often with an underpayment penalty on top. The fix is to project the gap from your vesting schedule and close it during the year with extra withholding or quarterly estimated payments.

When you exercise incentive stock options and hold the shares, the spread between the fair market value and your strike price is generally an adjustment in the alternative minimum tax calculation, even though it creates no regular income tax. Your AMT is then computed under its own exemption, phase-out, and rate structure, and you pay whichever of the two calculations is higher. Because the exemption and phase-out change every year and depend on your other income, the number of ISOs you can exercise before AMT kicks in is specific to you and has to be modeled, not guessed.

Qualified Small Business Stock treatment under Section 1202 depends on facts you can verify: the company must have been a qualifying C-corporation when your shares were issued, its gross assets must have been under the applicable cap at that time, it must run an active qualifying business, and you must hold the shares long enough, five years under the classic rules, with shorter tiered holding periods for certain stock issued after mid-2025. Shares acquired by exercising options generally start their holding clock at exercise, not at grant. It is worth verifying early, ideally before an exit is on the table, because the exclusion can be one of the largest tax benefits available to startup employees.

A double-trigger RSU requires two conditions before it vests: a time-based service condition and a liquidity event, usually an IPO or acquisition. Nothing is taxed until both conditions are met, even if you satisfied the service condition years ago. When the second trigger fires, the accumulated shares vest at once and the full value is taxed as ordinary income in that year, which is why IPO years need estimated payment planning well before the event.

For tax purposes, vesting, not selling, is what creates the income, and your cost basis resets to the share value on the vest date. Selling immediately therefore usually produces little additional gain or loss, while holding is a concentrated bet on one company, which is an investment decision rather than a tax strategy. We model the tax side of the sale schedule and coordinate the diversification decision with your financial advisor.

Often by both states, in pieces. California, for example, can source equity compensation using California workdays during the applicable grant-to-vest period, even after you move away, and other states apply their own sourcing rules. The income from each vest gets allocated between the states, credits are coordinated so you are not taxed twice on the same dollars, and the move itself needs documentation to survive a lookback.

Software files the year that already happened; it cannot tell you how many ISOs to exercise, whether your withholding will cover a vest wave, or that your broker reported $0 basis on shares you already paid tax on. The value of a planning CPA is decisions made before December 31 and errors caught before they cost you. If your equity income is a five- or six-figure line on your return, the planning usually matters more than the filing.

That is common at this income level, and it is handled under the same roof. We run short-term rental loophole planning, cost segregation coordination, and S-corp planning for side businesses alongside the equity work, so one firm sees the whole picture instead of two firms each seeing half.