RSUs withheld during vesting tax question
So let’s say I get paid out 1,000 shares of RSUs and 40% is withheld (and sold presumably) to pay taxes so I only get 600 shares now. After doing taxes, I find my tax liability is only 32% so that means they over withheld 80 extra shares. Let’s say the stock grew in price ($10/share) by the time I do my taxes...does that mean I missed out on $800 in capital gains because of extra overwithholding?? Seems unfair. Any way to stop share withholding during vesting (because I think company stock is gonna go up so I don’t want to sell just yet)? Is this usually a company policy or the trading firm you use? Oracle uses Fidelity and they didn’t ask me.
It is unfair and company doesn't let me choose any other options.
Some companies allow you to choose how to pay taxes; withold stocks or pay cash. Talk to your brokerage firm
same question. Especially with AMZN stock....
Lol good luck calculating the right amount of tax to pay quarterly. Because it's due quarterly, not end of the year.
Well if your vest schedule is 1x a year wouldn’t you just pay it for that quarter? It can’t be that hard right? I mean even if I have to hire a tax consultant for $200...still better than losing out on $800 because someone sold my RSUs prematurely.
Shit, at Oracle it's once a year? Yeah, then for you it would be simple
Talk to your broker.
You can buy stock in a publicly traded company whenever you want. If you want to hold a certain amount of your company’s stock, why are waiting for your RSUs to vest? RSUs are a cash bonus that happens to be paid in stock. They are W-2 income like a cash bonus. Thus, they are taxed like a cash bonus.
Absolutely- RSU is a cash bonus. Not selling it on the vest date = investing that bonus in your company’s stock.
You can choose to pay cash in taxes at vest, which will be 400 stocks worth of cash in your example so you retain all 1000 stocks. But how is it different than letting go of 400 stocks as taxes then buying 400 stocks of your company in the market.
The difference is OP may not have cash to cover the purchase (loaned to IRS interest free), in which case I'd suggest to reduce withholding on previous regular paychecks to offset that.
^Sound advice for everyone who get tax refund at the end of year to use that money to do something for you, cover taxes for your RSU vesting = investing more in your company’s stock or any other investment.
Uncle Sam just collects his money, he gives 0 fuck about YOUR fairness.
Lol. So true!
Okay it seems I just need to withhold less on my regular paycheck to offset the crappy mandatory selling of stocks to cover tax. I currently take 2 allowances...are you allowed to take more?
Curious of this as well
Me too
RSUs are taxed at a different percentage ( higher) than your regular base pay.