[nshelly]

I think for early stage companies you should see the startup as a 1) learning opportunity first and chance to work with a great team driven by a passion outside of pure money, and 2) an out-of-the-money call option / favorable lottery ticket. Also, the new tax bill got rid of AMT for incomes under $500,000 for individuals ($1m for couples). It's difficult to go over that amount with ISO's as the FMV of your shares is valued at around 10-30% of preferred. You could exercise your options once every year for example to stay under that limit.

If you've already exercised and paid AMT, try to invest your other savings and if you need to take a loss you can offset it against those capital gains.

While it might not be something you're passionate about, I would also add that reading about startup law, discussing with your peers, and knowing your rights, and even asking (getting in writing) the terms of the investment rounds, is invaluable and certainly something you should do if you want to understand your full package.

[shostack]

Can you elaborate or point to any references on how this works? Does this essentially mean if I have some amount of options I want to exercise, and the combined total of that + my income is <$500k, I don't need to pay taxes on the options at all?

[dpiers]

I believe they're mistaken - 500k/1MM are the new exemption phaseout points.

[shostack]

So how does it actually work though? I'm not really familiar with this stuff, so any basic info or good links to learn more would be much appreciated.