Your Stock Options Are Worth What You Keep After Taxes
The Problem
The Most Expensive Mistake Isn't Picking the Wrong Stock. It's Exercising at the Wrong Time.
These are high-stakes decisions being made every day by smart, successful professionals who are either guessing, Googling, or getting advice from an advisor who understands the investment side but has never filed an AMT calculation, and a CPA who files accurate returns but has no visibility into the financial plan.
ISO Exercise Strategy
We model the optimal number of shares to exercise each year, factoring in your other income, your bracket, your AMT crossover point, and your broader financial plan, so you capture the spread without the surprise.
ESPP Optimization
We track your lots, model the optimal sale timing, and ensure you're not accidentally converting long-term capital gains into ordinary income by selling before the qualifying disposition window.
NSO Tax Planning
Non-qualified options are taxed as ordinary income at exercise. We model scenarios against your full tax picture so you know exactly what you'll net, before you make the decision.
AMT Modeling & Management
We run AMT projections alongside regular tax projections throughout the year, not just at filing time, so you can make exercise decisions with full visibility into both tax systems.
RSU Diversification Planning
We build diversification timelines that balance your risk tolerance, your tax situation, and your overall portfolio allocation, so you're not making sell decisions in a vacuum.
Service FAQ
Equity Compensation Questions
What is the difference between ISOs and NSOs for tax purposes?
ISOs (incentive stock options) and NSOs (non-qualified stock options) are taxed differently. ISOs may qualify for preferential long-term capital gains treatment if holding-period requirements are met, but exercising ISOs can trigger the alternative minimum tax (AMT). NSOs are taxed as ordinary income at exercise based on the spread between the strike price and fair market value, with no AMT implications. The right approach depends on your individual tax situation, grant terms, and overall financial picture.
When are RSUs taxed, and how should I plan for it?
RSUs (restricted stock units) are generally taxed as ordinary income at vesting, based on the fair market value of the shares on the vesting date. Unlike stock options, there is no exercise decision with RSUs. Planning typically involves coordinating vesting schedules with your other income, evaluating whether to sell shares at vesting or hold them, and considering the concentration risk that comes with holding a large position in a single company's stock. Tax outcomes vary by individual circumstances.
How does the alternative minimum tax (AMT) affect ISO exercises?
Exercising ISOs can trigger AMT because the spread between the exercise price and fair market value at exercise is included as an AMT preference item, even though it is not taxed for regular income tax purposes until the shares are sold. Whether AMT actually applies depends on your overall income, the size of the ISO spread, and other AMT preferences. Coordinated planning may help manage AMT exposure through timing of exercises across tax years, but outcomes depend on individual tax circumstances.
What is a concentrated stock position, and why does it matter?
A concentrated stock position occurs when a significant portion of your net worth is tied to a single company's stock, which is common for executives and employees with equity compensation. Concentration introduces risk because the value of your holdings depends on one company's performance. Strategies to address concentration may include systematic selling, charitable giving, or exchange funds, each with different tax and timing trade-offs. No strategy eliminates risk entirely, and the right approach depends on your goals, tax situation, and risk tolerance.
How does equity compensation fit into a coordinated financial plan?
Equity compensation decisions rarely exist in isolation. The timing of option exercises, RSU vesting, and stock sales can affect your tax bracket, retirement contributions, cash flow, and investment diversification. A coordinated plan evaluates equity compensation alongside your overall tax strategy, investment portfolio, retirement timeline, and estate planning goals so that each decision is considered as part of the same financial picture.
This information is general education only. Decisions about tax, investment, retirement, or financial planning should be evaluated against your specific circumstances with qualified professionals.
Tax Season Shouldn't Feel Like Starting Over
Schedule a no-pressure conversation. We'll talk about how your taxes are currently handled and whether there's a better way.
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