You have to pay taxes on RSU when they vest, regardless of whether you sell or not. It's basically considered cash compensation, but instead of cash you receive shares.
Since your company is pre IPO, they may have a dual trigger vesting schedule, where shares vest over time but require an actual liquidity event for you to actually receive the shares, giving you no tax liability while the company isn't public. However, this means that once the company goes public, you'll have to pay all of that liability at once, at ordinary income tax rates.
Disclaimer: not an accountant, much less your accountant, this is not financial advice, seek proper advice from a qualified professional.
The tax rates will probably not be what most people consider "ordinary". In CA, the top marginal bracket is about 52%.
If you're getting N years of windfall-level income in one year, some of the income is likely to be in that top bracket. This means that all sorts of tax stragegies you probably are not familiar with will kick in.
For instance, it might make sense to move charitable contributions into that year, since the IRS will effectively be matching them.
Also, AMT will probably kick in, so consider hiring an accountant.
Depends on if they are set up with a double trigger. Here is a decent explainer, but you can research more about RSU double triggers that can help avoid taxes for large-but-private companies: https://www.parkworth.com/blogs/pre-ipo-tech-giants-using-do...
What this does mean, though, is that until the second trigger is hit you haven't technically vested the RSUs. So you get around the taxation but there may be additional conditions on your equity.
Early exercise is rarely ever an option except for very early stage companies. Most are ISOs with 90d window (which if you’re lucky converts to NSOs with a longer window) which is worst of both world bc of AMT
pre-IPO RSUs usually come with a double trigger. meaning you vest them monthly or quarterly etc but a liquidity event such as an IPO, is needed to actually "vest" them in a taxable sense.
Since your company is pre IPO, they may have a dual trigger vesting schedule, where shares vest over time but require an actual liquidity event for you to actually receive the shares, giving you no tax liability while the company isn't public. However, this means that once the company goes public, you'll have to pay all of that liability at once, at ordinary income tax rates.
Disclaimer: not an accountant, much less your accountant, this is not financial advice, seek proper advice from a qualified professional.