RSUs, or Restricted Stock Units, are quite prevalent in the tech sector as an employee benefit. Today we cover everything you need to know about RSUs, their tax implications, and the myths around them.
RSUs, or Restricted Stock Units, are ways to compensate employees that tie them to company performance and provide an incentive to stay with the company. It's a certain number of shares of company stock.
The shares don't become the employees until the RSUs vest, which can happen partially or completely as the employee stays longer with the company.
When the shares vest, you are taxed on the value of the stock as regular income. When you sell the shares, you are taxed on the change in the stock price.
For example - at vest, you have 100 shares at $50 per share. That's a value of $5,000.
If you sell the stock when it's at $51 per share, you are taxed on the $1/share gain.
Amy breaks all of this down, including reasons why you may want to hold or sell your RSUs, and when.
Links:
Blog Post on RSU Tax Misconceptions
Thimbleberry Financial Website
Call Thimbleberry Financial at 503-610-6510