RSU Sell to Cover: How It Works & Why You May Still Owe
RSU sell to cover withholds at the IRS 22% supplemental rate, but most tech employees owe 32-37%+ federally. Here's how to calculate the shortfall before April.
Mike Navarro··11 min read
MN
Mike Navarro
Founder & Equity Compensation Tool Builder at EquityTax
Mike Navarro is a software engineer who builds equity compensation tools. After nearly triggering a ~$60K AMT bill during his own ISO exercise at a startup, he built EquityTax to help employees avoid the same mistake. All tax content is reviewed against current IRS publications.
Credentials
- Built EquityTax after personal experience with ISO AMT
- Software engineer specializing in financial tools
- All content verified against IRS publications
Articles by Mike Navarro (76)
New Jersey Income Tax: Brackets to 10.75% and How RSUs Are Taxed
New Jersey's Gross Income Tax runs from 1.4% to 10.75% across eight brackets. Here's where equity-comp households actually land, how RSU vesting and ISO gains are taxed, and why NJ's lack of a flat supplemental rate matters for withholding.
Mike Navarro··7 min read
Moved States Mid-Year With Equity? How Your RSUs Are Taxed
Relocating doesn't reset the tax clock on your equity. Your RSUs and options are sourced by where you worked during the vesting period, so your old state can still tax a share long after you leave. Here's how multi-state allocation works.
Mike Navarro··7 min read
How to Read Your RSU W-2: Boxes, Codes, and the Withholding Gap
Your RSU income hides inside W-2 Box 1 as wages, not on a separate line. Here's a box-by-box walkthrough of where vesting income, withholding, and the gap you'll owe at tax time actually show up.
Mike Navarro··7 min read
Massachusetts Income Tax: 5% Flat Rate, 4% Surtax & RSUs
Massachusetts taxes most income at a flat 5%, plus a 4% Fair Share surtax above $1,083,150 — a 9% top rate. Here's how that hits RSU vesting, ISO gains, and capital gains, and how a big equity event can cross the surtax line.
Mike Navarro··7 min read
QSBS Exclusion Rules: Section 1202 Eligibility, Holding Period & Caps
QSBS exclusion rules under §1202 can wipe out federal tax on up to $10M (now $15M) of startup-stock gain after a 5-year hold. See the eligibility tests, the cap, and the 2025 OBBBA changes.
Mike Navarro··13 min read
#QSBS#Section 1202#Startup Equity+3 more
ESPP Taxes: How Employee Stock Purchase Plans Are Taxed
A complete guide to ESPP taxes — the discount taxed as ordinary income, the capital gain at sale, qualifying vs. disqualifying dispositions, and the broker basis trap that double-taxes the unwary.
Mike Navarro··12 min read
#ESPP#Employee Stock Purchase Plan#Qualifying Disposition+3 more
Double-Trigger RSU Tax: How Private-Company RSUs Get Taxed at a Liquidity Event
Double-trigger RSUs are taxed as ordinary income at the liquidity event, not at vest. Here's why 22% withholding rarely covers the bill, with worked examples and a financing plan.
Mike Navarro··9 min read
Oregon Income Tax: 9.9% Top Rate and the RSU Withholding Gap
Oregon's income tax tops out at 9.9%, and that top rate begins at just $125,000. Its optional 8% supplemental withholding under-withholds RSU income, so equity earners owe Oregon at filing. Here's how the brackets and the gap work.
Mike Navarro··7 min read
How to Optimize Your Equity Taxes Across Multiple Years
Bunching an ISO exercise or a big share sale into one year stacks your income into the top bracket and past the AMT break-even. Here's how to optimize equity taxes across multiple years by flattening income instead.
Mike Navarro··7 min read
How to File Your Equity Compensation Taxes: The Forms Guide
A decision-stage map of every form your equity comp touches: the W-2 that already carries vest and exercise income, Form 8949 and Schedule D for sales, and Form 3922 and 6251 for ESPP and ISO — plus the basis fix that stops double taxation.
Mike Navarro··7 min read
How to Avoid Triggering AMT on Your ISO Exercise
AMT is driven by the ISO bargain element, so the way to avoid triggering it is to control that number — exercise to your break-even, spread exercises across years, and time disqualifying sales. Here are the levers in dollars.
Mike Navarro··7 min read
How Much You're Losing on Your Equity Comp Taxes
Four quiet leaks — under-withholding, the broker basis trap, bunched income, and unplanned AMT — drain thousands a year from equity-comp holders who never see them coming. Here's how much each costs, and how to plug them.
Mike Navarro··7 min read
Illinois Income Tax: Flat 4.95% Rate and How It Taxes RSUs
Illinois taxes all income at a single flat 4.95% rate, including RSU vesting, ISO gains, and capital gains. Here's how the flat rate hits your equity comp, why there's no bracket gap, and what to plan for.
Mike Navarro··7 min read
Tender Offer Tax: How Selling Private Shares Is Taxed
How tender offer proceeds are taxed: capital gains on long-held shares, ordinary income above your 409A price, plus FICA and AMT traps for ISO, NSO, and RSU sellers.
Mike Navarro··12 min read
ESPP Tax Forms Explained: Form 3922, 8949, W-2 & Schedule D
The main ESPP tax form is 3922, but you report the sale on Form 8949 and Schedule D while the discount appears as wages on your W-2. See which forms you get and the cost-basis trap.
Mike Navarro··9 min read
ESPP Tax Calculator: Estimate Your Tax on the Discount and Sale
An ESPP tax calculator estimates two layers of tax: ordinary income on the purchase discount and capital gains at sale. Model qualifying vs. disqualifying dispositions in dollars.
Mike Navarro··9 min read
ESPP Tax Examples: Worked Numbers for Qualifying vs. Disqualifying Sales
ESPP tax examples worked in dollars: the 15% discount as ordinary income, the qualifying vs. disqualifying split, the broker basis trap, and the W-2 reporting — all on one set of shares.
Mike Navarro··9 min read
New York QSBS Exclusion (2025): §1202 Gain Is Tax-Free at the State Level Too
New york qsbs exclusion: §1202 zeroes your federal tax, and because New York conforms, the same gain is $0 at the state and city level too — unlike California. See the numbers.
Mike Navarro··5 min read
#New York#QSBS#Section 1202+2 more
Washington RSU Tax Calculator (2025): Withholding, Shortfall, and Vesting Examples
Washington has no state income tax on RSU vests, but a 7% capital gains tax on long-term sale gains over $270,000 — see the federal gap for your bracket.
Mike Navarro··6 min read
Washington ISO AMT Calculator (2025): Exercise Limits and Worked Examples
Free Washington ISO AMT calculator: find your AMT-free exercise limit and the federal AMT bill on a full ISO exercise. Washington has no income tax — run your numbers in 60 seconds.
Mike Navarro··4 min read
Virginia RSU Tax Calculator (2025): Withholding, Shortfall, and Vesting Examples
This Virginia RSU tax calculator shows the gap between 22% federal withholding and your real bracket, plus VA's 5.75% rate. See the gap for your bracket.
Mike Navarro··4 min read
Texas RSU Tax Calculator (2025): Withholding, Shortfall, and Vesting Examples
Texas RSU tax calculator for 2025: no state income tax at vest, 22% federal supplemental, no TX capital gains. Run your numbers in 60 seconds.
Mike Navarro··5 min read
Texas ISO AMT Calculator (2025): Exercise Limits and Worked Examples
Texas iso amt calculator: model your ISO exercise with zero state tax. See AMT-free share limits and worked examples — run your numbers in 60 seconds.
Mike Navarro··4 min read
Pennsylvania RSU Tax Calculator (2025): Withholding, Shortfall, and Vesting Examples
Pennsylvania RSU tax calculator: federal 22% supplemental vs PA flat 3.07%, three worked vests, and the dollar shortfall default withholding leaves you.
Mike Navarro··5 min read
Oregon RSU Tax Calculator (2025): Withholding, Shortfall, and Vesting Examples
Oregon rsu tax calculator: see the gap between the 22% federal supplemental withholding on your vest and what you actually owe with Oregon's 9.9% top rate. Run your numbers in 60 seconds.
Mike Navarro··5 min read
New York RSU Tax Calculator (2025): Withholding, Shortfall, and Vesting Examples
New York RSU tax calculator: 22% federal vs NY's 11.7% supplemental and 10.9% top rate, three worked vests — see the gap for your bracket.
Mike Navarro··6 min read
New York ISO AMT Calculator (2025): Exercise Limits and Worked Examples
New York ISO AMT calculator: federal 26%/28% AMT plus NY 10.9% top rate (NYC adds 3.876%). See worked examples — find your AMT-free limit in 60s.
Mike Navarro··6 min read
New Jersey RSU Tax Calculator (2025): Withholding, Shortfall, and Vesting Examples
New Jersey RSU tax calculator: federal 22% supplemental vs NJ brackets up to 10.75% over $1M — three worked vests and the dollar shortfall.
Mike Navarro··6 min read
North Carolina RSU Tax Calculator (2025): Withholding, Shortfall, and Vesting Examples
North Carolina RSU tax calculator with three worked vesting examples — see the federal-plus-4.5% NC liability, the supplemental-withholding gap, and the dollar shortfall at filing.
Mike Navarro··5 min read
Massachusetts RSU Tax Calculator (2025): Withholding, Shortfall, and Vesting Examples
Massachusetts RSU tax calculator: federal 22% supplemental vs MA flat 5% (plus the 4% Fair Share surtax above $1M), three worked vests, and the dollar shortfall.
Mike Navarro··5 min read
Illinois RSU Tax Calculator (2025): Withholding, Shortfall, and Vesting Examples
Illinois RSU tax calculator with three worked vesting examples — see the federal-plus-4.95% Illinois liability, the supplemental-withholding gap, and the dollar shortfall at filing.
Mike Navarro··5 min read
Georgia RSU Tax Calculator (2025): Withholding, Shortfall, and Vesting Examples
Georgia RSU tax calculator with three worked vesting examples — see the federal-plus-5.39% Georgia liability, the supplemental-withholding gap, and the dollar shortfall at filing.
Mike Navarro··5 min read
Florida RSU Tax Calculator (2025): Withholding, Shortfall, and Vesting Examples
Florida RSU tax calculator for 2025: no state income tax at vest, 22% federal supplemental, no FL capital gains. See the federal gap for your bracket.
Mike Navarro··5 min read
Colorado RSU Tax Calculator (2025): Withholding, Shortfall, and Vesting Examples
Colorado RSU tax calculator with three worked vesting examples — see the federal-plus-4.4% Colorado liability, the supplemental-withholding gap, and the dollar shortfall at filing.
Mike Navarro··5 min read
California RSU Tax Calculator (2025): Withholding, Shortfall, and Vesting Examples
California taxes RSU income at a top marginal rate of 13.3% and withholds at just 10.23% — see the gap for your bracket and run your numbers in 60 seconds.
Mike Navarro··5 min read
California QSBS Exclusion Calculator (2025): §1202 Eligibility and Worked Examples
California QSBS exclusion explained: §1202 wipes out federal tax on up to $10M of gain, but CA gives you $0 state relief. See your CA tax bill in 60 seconds.
Mike Navarro··4 min read
#California#QSBS#Section 1202+2 more
California ISO AMT Calculator (2025): The AMT Trap and How to Avoid It
California ISO AMT calculator for 2025: see your AMT-free exercise limit, the trap when you exercise too many shares, and worked numbers for three startup grants.
Mike Navarro··5 min read
Best RSU Tax Calculators & Equity Comp Tools (2026)
The best RSU tax calculators and equity comp tools in 2026, compared honestly by price, what they calculate, equity types, state coverage, and signup.
Mike Navarro··12 min read
Google RSU Guide: GSU Vesting Schedule, Taxes, and Strategies
How Google RSUs (GSUs) work — the 1-year cliff, monthly vesting, refresh grants, sell-to-cover defaults, and tax strategies for managing bracket creep.
Mike Navarro··10 min read
Amazon RSU Guide: Vesting Schedule, Taxes, and Planning Tips
Everything Amazon employees need to know about RSU vesting — the back-loaded 5/15/40/40 schedule, tax implications of large Year 3-4 vests, and strategies to avoid surprises.
Mike Navarro··10 min read
RSU vs Restricted Stock: 83(b) Elections, Taxation, and Key Differences
RSUs are a promise to deliver shares at vest. Restricted stock is actual shares granted immediately (subject to forfeiture). The key difference: restricted stock is eligible for the 83(b) election, which can save tens of thousands in taxes. RSUs are not.
Mike Navarro··11 min read
Stock Options vs Other Equity Types: ISOs, NSOs, RSUs, SARs, and More
A comprehensive overview of all equity compensation types --- stock options (ISOs and NSOs), RSUs, restricted stock, phantom equity, SARs, and profits interests. Covers how each is taxed, when companies use them, and which you are most likely to receive at each company stage.
Mike Navarro··10 min read
RSU vs ESPP: How They Work, Tax Rules, and Which to Prioritize
A complete comparison of RSUs and Employee Stock Purchase Plans (ESPPs) covering how each works, tax treatment for qualifying vs disqualifying dispositions, the 15% ESPP discount, lookback provisions, and strategies for maximizing both.
Mike Navarro··10 min read
RSU vs ISO: Tax Treatment, Risk, and When Each Makes Sense
How RSUs and Incentive Stock Options differ in tax treatment, risk profile, exercise requirements, and which is better depending on your company stage and financial situation.
Mike Navarro··8 min read
RSU vs Stock Options: Value, Risk, and Tax Differences Explained
A comprehensive comparison of RSUs and stock options covering how each works, risk profiles in up/flat/down markets, tax timing, exercise costs, and which is more common at different company stages.
Mike Navarro··9 min read
ISO vs NSO: Tax Differences, AMT Risk, and Which Is Better for You
A detailed comparison of Incentive Stock Options (ISOs) and Non-Qualified Stock Options (NSOs) covering tax treatment at exercise and sale, AMT implications, the $100K annual limit, and holding period requirements.
Mike Navarro··13 min read
How Is AMT Calculated? Step-by-Step Guide with ISO Exercise Example
A complete step-by-step walkthrough of the AMT calculation: AMTI, exemption, rates (26%/28%), and comparison to regular tax. Includes a $200K salary + $300K ISO spread worked example.
Mike Navarro··10 min read
Disqualifying Disposition: What Happens When You Sell ISOs Early (and When It's Smart)
A disqualifying disposition is selling ISO shares before meeting the holding period. Learn the two requirements, tax consequences, and when selling early is actually the better strategy.
Mike Navarro··11 min read
IRS Form 6251: The AMT Form Explained Line by Line (With ISO Exercise Example)
Form 6251 is how you calculate Alternative Minimum Tax. Walk through the key lines, understand AMT adjustments and preferences, and see a worked example with ISO exercise.
Mike Navarro··10 min read
Vesting Schedule: Types, Examples, and How It Affects Your Equity Compensation
A vesting schedule determines when you earn your equity. Compare time-based, milestone-based, and hybrid schedules, plus real examples from Google, Amazon, and startups.
Mike Navarro··9 min read
Cliff Vesting Explained: What It Is, Why It Exists, and How It Affects Your Equity
Cliff vesting is the initial waiting period before any equity vests. Learn about the standard 1-year cliff, what happens if you leave early, and how different companies structure their cliffs.
Mike Navarro··10 min read
Strike Price (Exercise Price): What It Is, How It's Set, and Why It Matters
Your strike price determines your profit when exercising stock options. Learn how companies set it, the role of 409A valuations, what happens when options go underwater, and the tax implications.
Mike Navarro··10 min read
Alternative Minimum Tax (AMT): What It Is, Who Pays It, and How ISOs Trigger It
The AMT is a parallel tax system that ensures high earners pay a minimum level of tax. Learn how it works, current exemption amounts, and why ISO exercises are the #1 trigger for tech employees.
Mike Navarro··10 min read
Restricted Stock Units (RSUs): What They Are, How They Work, and How They're Taxed
A complete guide to RSUs — from grant to vest to sale. Understand the lifecycle, tax treatment, sell-to-cover mechanics, and how RSUs differ at public vs private companies.
Mike Navarro··10 min read
Stock Options Tax Calculator: ISO and NSO Tax Impact Compared
Compare the tax impact of exercising ISOs vs NSOs with our free stock options tax calculator. See how exercise timing, holding periods, and AMT affect your bottom line.
Mike Navarro··8 min read
Equity Compensation Calculator: ISOs, RSUs, and 83(b) Elections in One Tool Suite
Free equity compensation calculators for ISOs, RSUs, 83(b) elections, and IPO lock-up planning. Find your AMT-free limit, RSU withholding shortfall, and optimal exercise strategy.
Mike Navarro··8 min read
IPO Lock-Up Period: What Happens to Your Shares and Tax Strategy
During a 180-day IPO lock-up, you can't sell shares but may still owe taxes. Learn about the liquidity gap, 5 financing options, and how to plan ahead.
Mike Navarro··8 min read
How Are RSUs Taxed? A Complete Guide to Vesting, Selling, and Withholding
RSUs are taxed twice: as ordinary income when they vest, and as capital gains when you sell. Learn exactly how each event is taxed and how to minimize your bill.
Mike Navarro··10 min read
When to Exercise Stock Options: Timing Strategies for Maximum Value
The timing of your stock option exercise can save or cost you hundreds of thousands in taxes. Compare 4 exercise timing strategies with concrete examples.
Mike Navarro··9 min read
RSU Tax Withholding: Why 22% Is Never Enough (and What to Do About It)
Your employer withholds 22% on RSU income, but your actual tax rate is 40-55%. Learn why the gap exists and 3 ways to avoid an April surprise.
Mike Navarro··9 min read
Exercise Stock Options Before IPO: Tax Implications and Strategy Guide
Should you exercise stock options before your company goes public? This guide covers the tax implications of pre-IPO exercises, 83(b) elections, AMT planning, and multi-year strategies.
Mike Navarro··8 min read
AMT Calculator for Stock Options: Find Your AMT-Free Exercise Limit
Use our AMT calculator to find the maximum number of ISOs you can exercise without triggering Alternative Minimum Tax. Includes 2026 exemption amounts and a step-by-step example.
Mike Navarro··9 min read
RSU Tax Rate: How Much Tax Do You Really Owe on RSUs in 2025?
Your actual RSU tax rate is much higher than the 22% your employer withholds. Learn exactly how federal, state, and FICA taxes apply to your RSU vesting.
Mike Navarro··8 min read
83(b) Election Explained: What It Is, How to File, and When It Saves You Thousands
A complete guide to 83(b) elections — what they are, how to file, the 30-day deadline, and when filing saves you tens of thousands in taxes on startup equity.
Mike Navarro··11 min read
Quarterly Estimated Tax Guide for Equity Compensation
Complete guide to quarterly estimated taxes for equity compensation. Due dates, safe harbor rules, and penalty calculations for RSU, ISO, NSO, and ESPP income.
Mike Navarro··11 min read
How Equity Compensation Affects Your Tax Return: RSUs, ISOs, and 83(b)
Complete guide to reporting equity compensation on your tax return. Which IRS forms report RSUs, ISOs, and 83(b) elections — W-2, 1099-B, Form 6251, Form 3921.
Mike Navarro··12 min read
How RSUs Affect Your Tax Refund (and Why You Might Owe)
RSU vesting can turn your expected tax refund into a surprise bill. Learn why 22% withholding creates shortfalls and how to plan ahead.
Mike Navarro··10 min read
Estimated Tax Payments After ISO Exercise: Avoid the AMT Penalty
ISO exercises can trigger AMT estimated tax requirements. Learn safe harbor rules, quarterly payment deadlines, and how to avoid the IRS underpayment penalty.
Mike Navarro··10 min read
Do I Need to Pay Estimated Taxes on RSU Income?
Learn when RSU vesting triggers estimated tax payment requirements, why 22% withholding creates a shortfall, and how to avoid IRS underpayment penalties.
Mike Navarro··10 min read
2026 Federal Tax Brackets and Tax Rate Schedules (IRS Official)
Complete 2026 federal income tax brackets for all filing statuses with IRS-sourced tax rate schedules, standard deductions, AMT exemptions, FICA thresholds, and capital gains rates.
Mike Navarro··10 min read
Washington Income Tax: No State Tax, But Watch Out for the Capital Gains Tax on Equity
Washington has no income tax, but the new 7% capital gains tax applies to stock sales over $270K. Guide for Amazon, Microsoft, and tech employees with RSUs and ISOs.
Mike Navarro··12 min read
Texas Income Tax: Why No State Tax Doesn't Mean No Tax Planning for Equity Compensation
Texas has no state income tax, but tech employees with RSUs and stock options still face significant federal tax obligations. Complete guide to equity tax planning in TX.
Mike Navarro··10 min read
New York Income Tax: 2026 Brackets, Rates & How NY Taxes Your Equity Compensation
Complete New York state income tax guide. Tax brackets, NYC tax, supplemental withholding, and how NY taxes RSUs, ISOs, and stock options.
Mike Navarro··13 min read
California Income Tax: 2026 Brackets, Rates & How CA Taxes Your RSUs and Stock Options
Complete California income tax guide. Tax brackets for all filing statuses, Mental Health Tax, supplemental withholding, and how CA uniquely taxes RSUs and ISOs.
Mike Navarro··11 min read
State Income Tax Guide: Rates, Brackets & How States Tax Equity Compensation
Compare state income tax rates, brackets, and supplemental withholding rates for equity compensation. Detailed coverage of CA, NY, TX, and WA with a summary of all state tax categories for tech employees.
Mike Navarro··12 min read