In 2019, I received a bonus of which part was in stock (RSUs.) The stock vested in 4 increments - 25% per year over 4 years. The last chunk vested last week, however, I need to hold it for a year otherwise it’s considered a short term capital gain. Also, the current price is $5 below what they were issued at. So it will be 5 years before I am fully paid for 2019 but possibly less than what I was “given.”
Yay, Frank.
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You pay taxes when it vests. You choose whether to have the taxes withheld in the form of reduced shares or pay cash. As said earlier, in order to do best on capital gains taxes you still need to hold the vested shares for one year even though you paid just paid incomes taxes. Unless you’re an exec given a healthy amount then getting RSUs as a meager bonus is basically a penalty.
Do you pay taxes on the bonus when it is issued, or when it vests?
As a bonus it is withheld at the 22% rate, so you would only be getting 18% of your bonus in cash?
60% RSU + 22% standard bonus withholding + 18% cash = Frank's gift to you.
I'm just curious, not like I'll ever have to worry about this.
With bonuses now being 60% equity vested over 3 years there is no incentive to stay here.
The best thing about the bonus is the leverage it gave me to get a higher salary at a new company. It was all funny money but was on paper, so to speak, so I could point to it and say, "I want at least this much".
Sounds about right... Hence I moved out on my own terms leaving behind change to Franky buoy to enjoy. I see he is struggling hard to keep up with the churn and working overtime to regain his own losses... After all who is he going to blame... Himself now rite 🤣🤣🤣