83(b) Election Calculator
An 83(b) election lets you pay ordinary income tax on the spread at grant, so future appreciation becomes capital gain. This calculator compares total tax with and without an 83(b) across your vesting schedule, given your projected FMV at each vesting date.
How to use this calculator
- Enter the grant: Add share count, purchase price per share, and FMV per share at grant.
- Enter your tax context: Select filing status and other income.
- Enter your vesting schedule: For each tranche, enter shares vesting and projected FMV per share at that date.
- Compare the two paths: Review tax with 83(b) (all at grant) vs without (spread across vesting), and see your projected savings.
- Note the deadline: File the 83(b) with the IRS within 30 days of grant — no extensions.
Assumptions
| Assumption | Value |
|---|
| Federal brackets | 2026 estimated ordinary rates |
| State tax | Not modeled — federal comparison only |
| FICA / payroll | Not modeled |
| Forfeiture | Assumes all tranches vest |
| Deadline | 30 days from grant, no extensions |
Frequently asked questions
What is an 83(b) election?
It's an IRS election that lets you pay ordinary income tax on the spread between purchase price and FMV at grant, rather than as each tranche vests. Future appreciation becomes capital gain instead of ordinary income.
When is the deadline?
You must file with the IRS within 30 days of the grant/purchase date. There are no extensions and no cures — miss the window and you lose the ability to make the election on those shares.
When is an 83(b) usually a good idea?
When the spread at grant is small or zero and you strongly believe the FMV will rise before vesting. Founders who buy common at incorporation often see zero spread at grant and huge appreciation, making the election almost automatic.
When is an 83(b) a bad idea?
If the company fails, you don't get the tax back. And if the spread at grant is already large, filing accelerates a big tax bill for stock you may never keep.
What's the difference between 83(b) and RSU deferral?
83(b) applies to restricted stock (property received subject to vesting). RSUs are contract-based and can't be 83(b)'d because no stock is transferred at grant.
Does the election affect QSBS?
Yes — filing an 83(b) starts the 5-year QSBS holding period at grant on all covered shares, instead of at each vesting date.
What if I leave before vesting?
You forfeit the unvested shares. You generally don't get back the ordinary income tax you paid via the election, though you may claim a capital loss for what you paid for the forfeited shares.
How do I actually file?
Mail a signed 83(b) statement to the IRS service center where you file your return, within 30 days. Keep proof of mailing, and provide a copy to your company.
Does this calculator include state tax?
No — this comparison shows federal ordinary tax only, so the delta is directional. State income tax scales the difference roughly proportionally.
Is this tax advice?
No. This tool illustrates the tax mechanics of an 83(b) election using 2026 estimated brackets and is not tax, legal, or investment advice.
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