Taxes. Income tax is owed on the value of whatever is granted. If an option is granted with a strike price equal to the fair market value for the stock, then th

Taxes. Income tax is owed on the value of whatever is granted. If an option is granted with a strike price equal to the fair market value for the stock, then there's no income tax owed. This is also the reason it's important the company chose FMV in a way that wont get disputed later. Because back taxes and penalties are a bear. Some do grant RSUs (restricted stock units), which are usually taxable as income when you receive them.