4 ms·
The ability for non founding employees to file 83b letters would be a big step forward here.
by kyleblarson 10y ago
The ability for non founding employees to file 83b letters would be a big step forward here.
- chimeracoder 10y agoWhat do you mean? You can file 83(b) elections when you exercise your options. Usually that's done when you leave the company, but sometimes it happens earlier.
- kyleblarson 10y agoI guess I could have been more general: the ability for employees to be granted equity and put off paying taxes until they decide to sell said equity would be a good start.
- chimeracoder 10y agothe ability for employees to be granted equity and put off paying taxes until they decide to sell said equity would be a good start. They can - that's what early exercise is. If you exercise on the day you are granted the options (not they day they vest - the day you join the company) your spread is zero, so your tax liability on that is zero. Of course, you still have to pay the strike price out of pocket, but the IRS doesn't take anything (yet).
- mattdeboard 10y agoFor those like me: http://acceleratedvesting.com/what-is-an-83b-election-and-when-do-i-make-it-part-1-with-graphic/ http://acceleratedvesting.com/what-is-an-83b-election-and-wh... > Codified at 26 U.S.C. § 83(b), this election lets you decide at the start of your vesting agreement to be taxed for the entire amount that will eventually vest at the present value. Rather than paying tax each year then, you pay all the tax up front based on the value of the stock when it was granted to you. In order to make this election, you have to send a letter to the IRS within 30 days of the grant being made.