Restricted Stock Units (RSUs) are a popular form of equity compensation that, after vesting, result in an employee’s receipt of shares of company stock or a cash payout. Similar to a bonus, RSUs can positively affect cash flow but incur taxes that require planning. Many individuals have been (or will be) granted RSUs by their employer during their careers. It is important to develop an understanding of how these interests fit into your overall financial plan.
This checklist helps guide your decisions regarding your RSUs. It covers:
- Key characteristics of RSUs
- Ordinary income tax considerations at vesting
- Capital gains tax considerations at sale
- Company stock and portfolio considerations
