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83(b) Election Tax Savings Calculator

Filing an 83(b) election within 30 days of stock issuance converts ordinary-income tax (on each vest) into capital-gains tax (only at sale). For founders, this saves enormous amounts of tax.
Tax savings from filing 83(b)
$850K
With 83(b) filed
$20.0M
Total tax over vest + exit
Tax at grant$0
Cap gains at exit$20.0M
Without 83(b)
$20.8M
Total tax over vest + exit
Ordinary at vest$1.8M
Cap gains at exit$19.0M
The takeawayFiling 83(b) within 30 days of stock issuance saves $850K in this scenario. The election converts ordinary income tax (on each vest) into capital gains tax (only at sale). Always file. Always.
⚠️ The 30-day window is hardYou have exactly 30 days from stock issuance to file. Miss it and there's no recovery. File certified mail with return receipt to the IRS. Also: this is an estimate, not tax advice — talk to a CPA.

What is the 83(b) election tax savings calculator?

83(b) election is an IRS filing that lets you recognize income on restricted stock at the time of grant rather than as it vests.

For founders with low-purchase-price restricted stock (typical: $0.0001/share), filing 83(b) means recognizing essentially zero income at grant. The future appreciation becomes capital gains taxed only at sale.

Not filing means each vest creates ordinary-income tax at the current FMV — taxed at much higher ordinary-income rates, potentially every month over the vesting schedule.

Why this matters for founders & operators

The 30-day filing window is hard. You have 30 days from stock issuance to mail the 83(b) election to the IRS. Miss it and there's no recovery — the tax bill on future vests can be six or seven figures.

Most founders' stock is issued at incorporation. Set a calendar reminder for 25 days. File certified mail, return receipt requested, to the IRS service center for your state.

How to use this calculator

  1. 1
    Use realistic future FMV

    Average FMV across the vest period — usually the FMV midway between today and exit. Higher FMV = more savings.

  2. 2
    Match your tax rates

    Federal + state combined for both ordinary and capital gains. Numbers vary significantly by state (CA is ~37% combined LTCG; TX is ~20% federal only).

  3. 3
    Don't underestimate exit FMV

    Even modest exits 5-10x current FMV. Run the calc at multiple exit values.

FAQ

When does an 83(b) election make sense?+
When restricted stock is purchased at near-zero price (founders, very early hires). Doesn't apply to standard stock options — those have a different mechanism.
What's the deadline?+
30 days from the stock issuance/purchase date. Hard deadline — missing it means no 83(b).
How do I file?+
Mail a one-page election form (templates online from IRS, Stripe Atlas, Clerky) to your IRS service center via USPS certified mail with return receipt. Keep copies.
What if I don't file and stock vests at high FMV?+
You owe ordinary-income tax on each vest — at the FMV at the time of vesting. For founders, this can mean taxes on millions of dollars of paper income with no liquidity to pay.
Can my employer file for me?+
No. The election is yours to file with the IRS. Some companies (Stripe Atlas, Clerky) provide templates and reminders, but the founder must file.