How to optimize tax at ipo ?
As Lyft and other similar companies IPO, employees will lose a good chunk to taxes. What are your tax optimization strategies to offset these huge taxes? Tc: ~385k including paper money
Very simple. Donate all you stocks to charity and you will not pay the tax.
Live in Washington state?
You can claim that you work for the tractor ride share division and get some farming deductions.
lol!
There's really not much you can do. How much have you vested already? There's some slight optimizations, but only if the stock goes up or down. I imagine most people will want to cash out.
RSU are regular income so you don't have many (any?) options here. Your employer takes the tax out before you get it.
Move to no income tax state before the liquidation event.
That won't help. California will tax you based on grant date, not vest date.
WoW really? If I move from California to another state they would continue to tax my vesting of current unvested RSUs? The other state wouldn’t? What about moving to another country?
Move to a country that doesn't capital gains and sell your paper money there. Assuming your RSU vested, you're not a US citizen and not subject to exit tax...
Move to a different state, buy some property. That's probably the best you can do.
This a a good article. https://blog.visor.com/equity/ipo-tax-implications-stock-options-and-rsus/
Thanks, looks like a good article.
So you want to earn money but avoid paying tax? Do you avoid paying tax on your all income too?
Tax optimization is neither avoiding tax nor unethical. Almost everyone does it at tax time.
Lol. You asked for 'offsetting'. Go lose a bunch of money through capital loss, and you can offset. However, if you have RSUs - oops - it's regular income tax then.