A tax filing that lets you pay taxes on stock at its current value rather than when it vests. Must be filed with the IRS within 30 days of receiving restricted stock. Missing this deadline can result in significant unexpected tax liability.
Why it matters
Filing an 83(b) election early can save you thousands in taxes. If your company grows significantly, you'd otherwise owe taxes on the much higher value as your shares vest. For founders receiving restricted stock at formation, this is one of the most important tax moves you can make.
How it works
When you receive restricted stock, you have 30 days to file Form 83(b) with the IRS. This tells them you want to be taxed now, at the stock's current (presumably low) value, instead of later when it vests at a potentially much higher value. You pay a small tax bill now to avoid a massive one later. The filing must be mailed to the IRS within 30 days. There are no extensions and no exceptions.
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