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by justinlardinois 3637 days ago
Are you talking about options being the entirety of one's financial compensation? Because I wonder how people who work without a salary manage to pay the bills every month.

> the tax on W2 income is simply the worst

As opposed to getting taxed on what you eventually make from your options?

1 comments

The maximum federal tax rate on what "you eventually make from your options" is likely 23.8%, whereas on the equivalent salary it'd be 43.4%.
It's hard to get substantial sums of money from options and have it all be taxable only at LTCG rates. ISOs are limited to $100K/yr when first exercisable and doing an 83b election (assuming your plan permits it) on unvested shares is fairly risky, to put it mildly.

Yes, it's possible to get such tax rates, but generally only for amounts under $100K.