Becoming unemployed to reduce tax on IPO RSU vest
Feb 6
My employer will IPO next year and my RSUs will be worth around 2 million USD at that point.
Since the taxation rate is based in my marginal tax rate, can I become unemployed that year to greatly reduce my tax burden on my RSUs?
Thanks a lot!
#taxes #ipo #google #coinbase #startup #Facebook
comments
That’s for 2021. If you were single (as an example) any amount over the first $523,601 of taxable income is taxable at 37%. Taking 200k of salary out of the equation drops the tax due on that 200k (so might save you 60k of tax, but you’d not have the net 140k salary either).
The TLDR is: no, stopping your salary won’t reduce your tax very much.
https://smartasset.com/taxes/income-taxes#0rtoU0XRNn
2. Make sure to buy PUTs to hedge the time from liquidity event -> Sell (normally you have to wait 6 months post IPO to be allowed to sell)