NSO Tax Strategies
NSO Tax Strategies
Exercise NSOs Earlier. Exercising NSOs sooner rather than later to shift taxation from (higher) income taxes to (lower) long-term capital gains tax rates.
File an 83(b) election. File an 83(b) Election to shift taxes from income to capital gains.
Pair NSO Exercises With ISO Exercises. Pairing NSO exercises with ISO exercises can help minimize (or eliminate) AMT tax exposure.
Understanding/Correcting Cost Basis Post-IPO for NSOs. If you exercised NSOs pre-IPO and your company eventually IPOs, the cost basis your broker lists for your NSOs will very likely be wrong (and needs to be corrected on your taxes).
Cross-Listed Tax Strategies
In addition to the above NSO tax strategies, a number of other tax strategies may also apply in certain situations. We encourage you to review all of the strategies detailed on the 50+ Tax Strategies page to ensure you have the proverbial "full menu" of tax planning strategies to consider for your situation.
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