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A tax checklist for startup equity

Use this checklist to avoid missing elections, exercise windows, and tax payments before you have cash to pay.

Rates and rules change. Check the tax year and last-reviewed date on each page, then confirm against IRS or state guidance before you file.

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Startup equity tax is mostly about not missing deadlines and not getting surprised by tax before you have cash. This checklist covers what to do at grant, whether to consider 83(b), and what to prepare before an IPO or acquisition.

Why this happens

Elections like 83(b) are deadline-driven, and missing them is often irreversible.

Exercising options can create tax before there is any way to sell shares.

Different instruments: , , , are taxed at different times and in different ways.

Liquidity events (IPO, tender, acquisition) can create both wage and capital reporting at once.

What to check

  • At grant: confirm the equity type and read the key terms.
  • Early on: decide whether early exercise and 83(b) make sense, and note the strict deadline.
  • Before exercise: estimate the spread and whether or applies.
  • Before a liquidity event: gather basis records and plan for .
  • Year-round: keep a folder of grant docs, exercise confirmations, and 409A notices.

Common mistake

Filing equity paperwork away and forgetting it until tax time. The most expensive startup-equity mistakes are missed elections and exercises done without a cash plan, both avoidable with a simple checklist.

Example scenario (hypothetical)

Illustration only, not your tax situation.

Example: Avery joins a startup, confirms the grant is , evaluates early exercise with 83(b) within the deadline, and keeps every confirmation. When a arrives years later, Avery already has the basis records needed to report it cleanly.

When to get help from a tax pro

  • You are deciding on early exercise or 83(b).
  • A liquidity event is approaching.
  • You have a mix of , , and .
  • You are unsure how to organize records.

Related calculators

Related pages

For learning, not filing

Grants, employers, and states all differ. Use your own documents and a qualified tax professional before you make decisions from this guide.