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Year-End 2025 Strategies for Equity Comp and Company Stock

"In July 2025, the 'One Big Beautiful Bill' Act of 2025 (OBBBA) made permanent the tax rates of the Tax Cuts & Jobs Act (TCJA) that were set to expire at the end of 2025. However, it also brought some changes that may affect planning for equity comp and company shares at year-end 2025.... [myStockOptions] asked many leading financial advisors, from different regions of the United States, for their ideas on financial and tax planning for the end of this year and the start of the next. [This article provides] their selected responses, presented in their own words."

Ideas for Year-End 2025 Planning with Stock Comp, Part 1

"When you are evaluating whether to exercise stock options or sell shares from vested restricted stock/RSUs or an ESPP, you want to consider the thresholds that may trigger higher tax rates for you either this year or next. Assess whether you should defer income into next year or accelerate income into this year. Project your income from equity awards to see whether it will trigger the additional Medicare taxes on high incomes this year or next year."

Concentration vs. Diversification: Managing Emotions on the Rollercoaster of Equity Comp

"A 'Scenario of Least Regret,' presents a little-by-little approach that can balance the competing interests of ambition and anxiety. Dollar-cost averaging is an effective way to inch out of a concentrated stock position. Check your overconfidence level by considering what you have to lose. Reframe your thinking out of tunnel vision on the stock price and consider the things you actually want to accomplish in your life with your stock wealth.... Form a plan with an advisor just one stage at a time if necessary. Focus on what percentage of company stock you want to keep, i.e. your 'legacy anchor position.' "

ISO Tax Strategies

"While it's a good idea to have a plan for any equity awards, tax planning is especially crucial for incentive stock options (ISOs). The special tax treatment that ISOs offer under the tax code is offset by the tradeoff of risk and more complicated taxation."

Quirk in 'Big Beautiful Bill' Could Boost Appeal of Nonqualified Deferred Comp

"[T]he higher cap on the SALT deduction comes with ... a phaseout for those with yearly adjusted gross income (AGI) exceeding $500,000.... [P]lanning ideas to try to hold your AGI below the phaseout zone ... include maximizing contributions to qualified retirement plans ... putting salary or bonuses into any nonqualified deferred compensation plan that's available; and exploring eligibility for other retirement or pension plans that defer income.... [E]valuate whether to avoid triggering more income, such as with Roth IRA conversions, nonqualified stock option exercises, and asset sales."

Test Your Knowledge of OBBBA Provisions for Stock Comp Planning

"The 'One Big Beautiful Bill Act of 2025' (OBBBA) made permanent many of the tax provisions in the Tax Cuts & Jobs Act of 2017 (TCJA) that relate to stock comp planning, with a few changes.... This quiz is also a course of study. The answer key links to content on the topic for follow-up reading."

How the 2025 Tax Law Affects Stock Options and RSUs

"[T]he 2025 tax law ... [includes] changes that influence the calculation of the alternative minimum tax (AMT), most notably in the significantly raised cap on state and local tax (SALT) deductions. Other provisions in the law concern the special tax treatment for startup company stock and tax planning around charitable donations. Some of these new provisions will become effective in 2026. Others take effect sooner."

How the 2025 and 2018 Tax Laws Affect Your Stock Comp and Financial Planning

"[1] Rates and brackets of individual income tax ... [2] The calculation of the alternative minimum tax (AMT) ... [3] Trigger point for the 20% tax rate on long-term capital gains ... [4] Estate planning and charitable contributions ... [5] Qualified small business stock (QSBS) ... [6] Section 83(i) tax-qualified stock grants for private companies ... [7] Performance-based exception to section 162(m) limit on deductible comp."

Tax and Financial Strategies for RSUs

"Questions to ask before RSU vesting ... [1] Tax-withholding trap at RSU vesting ... [2] RSU vesting years: reduce taxable income ... [3] Hold or sell the stock at vesting? ... [4] RSU selling plans impacted by insider-trading rules ... [5] RSU taxes can motivate diversification."

Estate and Charitable Planning with Equity Comp

"Donating wealth to charities and passing it along to future generations are important financial goals. What planning techniques are optimal if a large portion of your wealth comes from stock compensation?"