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Startup Employees Warned About the 30-Day 83(b) Tax Deadline

Original: Startup Employees Who File a One-Page Letter Within 30 Days of Getting Stock Pay Tax on Pennies. On Day 31 the Same Shares Are Taxed at Whatever They're Worth When They Vest, and There Is No Extension. The 83(b) Election

Startup employees receiving restricted stock face a strict US tax rule known as the 83(b) election. Filing a one-page letter with the IRS within 30 days of receiving shares means paying tax on their minimal value at grant. Miss that window and the same shares are taxed at full value when they vest, with no extensions available. The dramatic difference in outcomes is prompting calls for employees to act quickly and seek advice.

Why now: Workers joining startups are being reminded of the costly, unforgiving 30-day deadline that can mean thousands in extra taxes.

IRSstartup employees83(b) election

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