What are the different ways of managing RSUs after the restriction period is over? What are the tax implications?
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people highlight the tax advantage and high compushare fees as incentive not to sell. I used to believe that till i saw how much XOM has returned vs. SnP or QQQ..
Since then i sell the monent they vest and take advantage of the growth i can find in other places.
When shares vest, you are taxed at normal income with social security and medicare withheld and at the marginal tax rate. Note: many receving RSU have high base salary and are over the social security income limit, but could easily be in 32 to 37.6% federal income tax bracket. So assume about 40% federal tax...plus state tax if you work in a state with state income tax. After tax shares can be sold after a year at the 20% cap gains rate plus the obama care tax of 3.8%...so the after tax shares are at 23.8% cap gain
Why ask on this board? The Computershare information is pretty clear.
They get deposited in your ComputerShare account, less the shares they withhold to cover taxes and Medicare tax. You can leave them there, sell them there, or move them to your outside brokerage. The fees for selling through ComputerShare are very high so you may want to let them build up there for several years before selling in a larger block. If you leave them there, they pay the cash dividends into your designated bank account.
Imagine you worked hard enough to achieve outstanding with distinction and you're rewarded with $7000, 4 years later if you were lucky enough to still be employed at XOM.
They are massively taxed.
RSU are not worth the paper they're written on as an sg29 and below, especially over the long duration till they vest.
They get deposited in your account and are taxed at that time.