83(b) Election Tax Calculator (2026)
Compare taxes with vs without filing an 83(b) election in 2026. Estimate ordinary income at grant or vest, basis, capital gains, and potential savings.
Last updated: April 2026
This simplified model does not account for AMT, QSBS, state taxes, holding period requirements, forfeiture risk, or timing nuances. Consult a tax professional.
Capital gains tax assumes long-term treatment; if sold before one year from the 83(b) election date, short-term rates may apply.
What is the 83(b) Election Calculator?
This calculator helps you compare the tax implications of filing versus not filing an 83(b) election for restricted stock awards (RSA) or early-exercised options. With an 83(b), ordinary income is recognized on the grant date and your basis becomes FMV at grant. Without it, ordinary income occurs at vest, and your basis becomes FMV at vest.
Use this tool to see total estimated tax across ordinary income and capital gains under both approaches. Then discuss with your CPA whether an 83(b) election makes sense for your situation.
How to use this calculator
- 1Enter equity details — Input shares, purchase price, FMV at grant and at vest.
- 2Add tax rates — Enter your marginal ordinary income rate and long-term capital gains rate.
- 3Model sale price — Adjust expected sale price to see capital gains under each scenario.
- 4Compare outcomes — Review total tax with vs without 83(b) and estimated savings.
Formula & example
With 83(b): Ordinary Tax = max(0,(FMV_grant − Price)×Shares)×OrdinaryRate; Basis = max(Price, FMV_grant)×Shares; Cap Gains = max(0,(Sale − Basis))×CapRate. Without 83(b): Ordinary Tax at Vest = max(0,(FMV_vest − Price)×Shares)×OrdinaryRate; Basis = max(Price, FMV_vest)×Shares; Cap Gains = max(0,(Sale − Basis))×CapRate.
Example (2026):
- Shares: 1,000; Price: $1; FMV at Grant: $1.50; FMV at Vest: $5; Sale Price: $5
- Ordinary Rate: 37%; Capital Gains Rate: 20%
With 83(b): Ordinary income = ($1.50−$1)×1000 = $500 ⇒ Tax now ≈ $185; Basis = $1.50×1000=$1,500; Cap gain at sale = $5,000−$1,500=$3,500 ⇒ Cap tax ≈ $700; Total ≈ $885.
Without 83(b): Ordinary income at vest = ($5−$1)×1000 = $4,000 ⇒ Tax ≈ $1,480; Basis = $5×1000=$5,000; Cap gain = $5,000−$5,000=$0; Total ≈ $1,480.
Estimated savings with 83(b): ~$595 in this scenario.
Benefits
Plan your election
Quantify potential savings before the 30-day 83(b) deadline.
Compare scenarios
Test different FMVs and sale prices to see tax trade-offs.
Inform discussions
Share outputs with your CPA for tailored guidance.
Use cases
Founders & early employees
When FMV at grant is low and appreciation is likely.
RSA grants
For restricted stock awards subject to vesting.
Early exercise of options
When you early exercise and receive restricted stock subject to vesting.
Frequently asked questions
What is an 83(b) election?+
An 83(b) election lets you be taxed on the fair market value at grant (minus purchase price) instead of at vest. This may reduce total tax if the stock appreciates before vesting.
When should I consider filing 83(b)?+
It's most beneficial when FMV at grant is low and you expect significant appreciation. You must file within 30 days of grant. Consult a tax professional.
Does 83(b) affect capital gains timing?+
Yes. If you file 83(b), your holding period for capital gains typically starts at the grant date, potentially allowing earlier long-term gains treatment on sale.
Are there risks to filing 83(b)?+
If the stock declines or is forfeited, you may pay tax upfront you cannot recover. 83(b) filings are irrevocable and must be submitted within 30 days.
Is this calculator tax advice?+
No. It is an educational tool with simplified assumptions. For advice on your situation, consult a qualified tax professional.