Maximizing Your Start-Up Equity: Unpacking the 83(b) Election

Join Tom Dunlap for a crucial Monday Morning Minute aimed at entrepreneurs and startup employees. This episode dives into the often misunderstood or overlooked 83(b) election—a vital tax strategy for those receiving stock as part of their compensation. Tom explains the potential for massive tax savings by making an 83(b) election early when stock is granted, rather than when it vests. He uses a clear example to illustrate how making the right tax choices early on can save thousands in the long run, especially as the value of the startup grows. Also discussed are the benefits of qualifying for long-term capital gains treatment sooner, and the risks involved if the employment is terminated prematurely. Whether you're a startup co-founder or an employee with equity compensation, understanding the 83(b) election can significantly impact your financial future. Tune in to make informed decisions and potentially save on taxes as your shares vest.