Hi, my name is Tom Lo with Vested Financial Planning. I’m here to help you understand how can you save on your taxes with your ISOs.
The key way of saving taxes on your ISOs is by exercising and holding them for more than a year. If you exercise and hold your ISOs for more than a year, they qualify for the lower long-term capital gains tax rate. That means instead of paying ordinary income tax rate of a high 37%, you could pay the highest long-term cap gains tax rate of 20%. That’s a 17% savings on taxes.
So, for example, if you have a million dollars in ISOs, then you can save $170,000. So this is an important way for you to save taxes on your ISOs.
If you want to learn more come to my website at vestedfinancialplanning.com. Thank you very much.
After 20 years working for companies including eBay, Yahoo!, Intuit, and startups, I made a career change into the financial world as a fee-only financial planner 9 years ago. I earned my CFP®, spent a few years at a boutique fee-only firm in San Jose, worked 2 1/2 years at a leading wealth management firm in San Francisco, and then left to build the firm I wish had existed when I was working as a tech professional.
My mission is to help other Silicon Valley professionals make the most of their employee equity to help them reach their financial goals.