1,000 RSUs vest
They become ordinary income
RSU Tax Calculator
Understand the tax impact of your RSUs, avoid underpayment surprises, and make confident decisions.
These inputs represent today's vesting event. Optional fields can be left at zero.
1
What happens on vest day?
RSUs are treated as ordinary income when they vest.
Employer sells shares
Shares are sold to cover taxes
Tax withholding
Withholding is sent to tax agencies
Remaining shares are yours
Deposited to your brokerage account
Freshly purchased stock
Capital gain/loss starts today
Shares sold for withholding are not a sale you chose. They are simply used to pay taxes on your behalf.
2
Is the withholding enough?
Compare the estimated actual tax to what is withheld at vest.
RSU value (income)
$250,000
1,000 shares x $250
Estimated actual tax
$110,750
Federal + state
Tax withheld at vest
$55,000
22% supplemental rate
Potential shortfall
$54,250
After other withholding
Potential penalty risk: High. You may owe a penalty if total payments are below IRS safe harbor rules.
3
Safe harbor check
Avoid the underpayment penalty by meeting one of these rules.
Rule 1
Owe less than $1,000
After withholding, credits, and estimated payments.
Not met
Projected shortfall: $54,250
Rule 2
Pay at least 90% of this year's tax
90% of estimated tax: $99,675
Not met
Projected payments: $56,500
Rule 3
Pay 100% of last year's tax
110% may apply if your adjusted gross income was above $150k.
Not met
Check last year's Form 1040 total tax.
You may not be meeting a safe harbor rule. Consider an estimated tax payment.
Go to payment options4
Make an estimated tax payment
Pay the IRS directly to avoid penalties. It is simple and fully credited to your tax account.
- 1You make a paymentPay online through IRS Direct Pay, EFTPS, or by credit card.
- 2IRS records your paymentThe payment is posted to your IRS account immediately.
- 3Tax return next yearWhen you file your tax return, the payment is applied.
- 4Payment becomes a creditIt reduces your tax owed or increases your refund.
Your payment is never lost. It becomes a credit on your tax return.
Where to pay
IRS Direct Pay (recommended)
Pay directly from your bank account. Fast, simple, and secure.
IRS EFTPS
Good for business owners and larger payments.
Credit Card
Convenient, but has a processing fee.
Credit card option
Paying by credit card can be worth it only after comparing fees and rewards.
- Payment amount
- $54,250
- Processing fee (-1.87%)
- -$1,014
- Cash back (2%)
- +$1,085
- Net reward / cost
- +$71
A large tax payment may help complete a new credit card welcome bonus. Compare the processing fee against cash back, points, and bonus value before deciding.
5
How it appears on your tax return
Estimated tax payments are reported on your Form 1040.
Form 1040 payments
- Federal income tax withheld
- $55,000
- Estimated tax payments
- $54,250
- Other payments
- $1,500
- Total payments
- $110,750
Applied to your tax
- Total tax (estimated)
- $110,750
- Total payments
- -$110,750
- Refund / balance due
- $0
Common questions
What if I overpay?
The excess generally increases your refund or can be applied to next year.
What if I pay twice?
It should still appear as payments on your tax account and return.
Can I get the payment back?
Usually through filing the return, not by reversing the payment.
6
Should I sell my vested shares?
There is no right answer. Think like an investor, not like an employee.
Imagine your employer paid you $195,000 entirely in cash today.
Would you immediately use all of that cash to buy your company stock? That question helps separate objective investing from familiarity and loyalty.
Sell all and diversify
Simplify, reduce concentration risk, and move cash to your broader plan.
Sell enough to cover taxes
Cover your tax bill while keeping the rest if you believe in the company.
Hold intentionally
Keep shares only if you want the concentration and long-term exposure.
Sell and reinvest elsewhere
Move RSU value into diversified funds in your own brokerage account.