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On this point: "Consider taxes on bonuses and stock." Yes, but consider taxes on your current total compensation (less 401k contributions, HSA, and Cafeteria p

On this point: "Consider taxes on bonuses and stock." Yes, but consider taxes on your current total compensation (less 401k contributions, HSA, and Cafeteria plans (e.g., dental)) versus offers you receive. Stock and bonuses are W2 income and taxed at your marginal rate. They aren't special. They may withhold more, but once you file, it's marginal.

fidesomnes 5y ago
I never understood why this is considered a dunk. You get taxed on compensation, surprise!
trimbo 5y ago
> Stock and bonuses are W2 income and taxed at your marginal rate If you click on the link of that text, their point is that stock is not always W2 income. For example, if someone joins a startup, pre-exercises and files an 83b, that gives a vastly different tax outcome than RSUs at BigPublicTechCo. Conversely, if someone joins a startup and does not exercise their options, then wants to quit after the stock has gone up 10x but isn't liquid, they will have to pay a hefty AMT when they exercise. Many people aren't aware of startup stock tax implications, and they should learn more about it (i.e. click the link in the article).
rahimiali 5y ago
The article points out that Amazon offers pay cash for two years the stock, whereas Google pays a mix of stock and cash. The tax difference is that that with Amazon, your stock grows unvested for two years, and when you vest, it’s growth gets taxed as ordinary income. With google stock, you can hold the vested stock for those same two years and get taxed on that growth as long term capital gains.
- pavas 5y ago
  Isn't it actually as simple as "how much do you get paid per year in total"? The reason being that you can convert cash to stocks (and pay capital gains taxes on its growth) at any time. So $100k salary + $50k cash bonus == $100k salary + $25k cash bonus + $25k vested stock. You can discount any future inflows of cash or stock to present value and compare offers quite easily. Some offers will be more but that has nothing to do with whether compensation is made up of stocks or cash.
  - rahimiali 5y ago
    yeah good point. equivalence by reduction to rsu.

fidesomnes 5y ago

I never understood why this is considered a dunk. You get taxed on compensation, surprise!

trimbo 5y ago

> Stock and bonuses are W2 income and taxed at your marginal rate If you click on the link of that text, their point is that stock is not always W2 income. For example, if someone joins a startup, pre-exercises and files an 83b, that gives a vastly different tax outcome than RSUs at BigPublicTechCo. Conversely, if someone joins a startup and does not exercise their options, then wants to quit after the stock has gone up 10x but isn't liquid, they will have to pay a hefty AMT when they exercise. Many people aren't aware of startup stock tax implications, and they should learn more about it (i.e. click the link in the article).

rahimiali 5y ago

The article points out that Amazon offers pay cash for two years the stock, whereas Google pays a mix of stock and cash. The tax difference is that that with Amazon, your stock grows unvested for two years, and when you vest, it’s growth gets taxed as ordinary income. With google stock, you can hold the vested stock for those same two years and get taxed on that growth as long term capital gains.

pavas 5y ago
Isn't it actually as simple as "how much do you get paid per year in total"? The reason being that you can convert cash to stocks (and pay capital gains taxes on its growth) at any time. So $100k salary + $50k cash bonus == $100k salary + $25k cash bonus + $25k vested stock. You can discount any future inflows of cash or stock to present value and compare offers quite easily. Some offers will be more but that has nothing to do with whether compensation is made up of stocks or cash.
- rahimiali 5y ago
  yeah good point. equivalence by reduction to rsu.