Hello Friends,
I joined this PRE IPO company in 2021, and they went public in 2021. I had gotten option stocks which has vested now(portion). I have just vested as soon as I become eligible into my brokerage, and haven’t sold any of them. Do I need to mentioned those on the taxes each year ? #engineer #rsu #options #help #suggestion #doximity
If you have ISOs there are two times you may pay tax — which you likely do if you joined pre ipo. 1. After your shares vest you are able to exercise them. You may be liable to pay AMT on these exercised shares (yes even if don’t sell them). You will need to fill out the tax form 3921 to report this. This form will be made available by your company in E*Trade (or whatever they use) usually in Jan or Feb. It is worth doing some reading or talk to a tax person about AMT before exercising so you can understand the tax implications as the tax liability can be sizable. 2. After your shares are vested and exercised you are able to sell your shares (during open windows) . You will be liable to pay capital gains tax on this. Also worth reading up or talking to someone before doing this to understand the trade offs of short and long term capital gains.
I don’t think you need to mention this on your taxes. You need to mention stuff you need to pay tax on. You don’t pay tax on options that have vested. You will pay tax on capital gains, which will be when you exercise your options, ie when you get cash.