Lyft, Uber, pins, what is ur tax withhold rate for ur RSU shares. I recently learned if price drop, u have to pay additional for the tax if the withhold ratio is low. Say u sold 30% at IPO price 100, then u owe 10% at price 100 to IRS if ur tax rate is 40%. If after 6 moths, stock cut half, u actually have to sell 20% to cover the owned 10% tax to IRS. Is there any way to get around with it.
Sell what you need at vest to cover the tax liability.
Do you pay any tax on the vested RSU if the company is not IPO?
Tax obligation is in effect once the stocks are transferred/released (not only vested) to you. For RSUs I haven’t seen an example where the release happens before the IPO, as it would incur a large tax bill which stocks can’t be sold to cover.
Don’t they take out a percentage of the vested RSU at IPO time??
Capital gains /losses basically make it fair
Capital loss is only 3k a year, if ending up losing 100k, there is a lot of years to get back
I had the exact same concern and asked our equity team a month ago. All they kept saying was, we will withhold only ~40% (fed+state+social+med) and that can’t be changed unless the vesting is over a million. I showed them the math and explained but they don’t seem to care. You can talk to your professional tax consultant but I don’t think they can do any miracles.
40% seems high enough
Other way is to workout a plan with IRS to pay it over years and hoping the stock recovers in that time.