The RSU Checklist I Walk Every Client Through
Is your portfolio increasingly concentrated in your employer's stock? If so, this checklist will be gold for you.
The RSU Checklist I Walk Every Client Through
Most people with RSUs don’t have a strategy. Shares vest, the company withholds some tax, and whatever’s left sits in the account.
It feels harmless because you never paid for the shares. But every vest is income, and the IRS taxes it exactly like your salary. If you keep the shares, you’ve effectively used part of your paycheck to buy company stock, whether you meant to or not. And that usually means you're taking outsized risk.
But most people don't talk about that - they only talk about what could happen if the stock goes up a lot. What happens if it goes down a lot? Look at NVIDIA stock in October/November 2026. How do you think people who had 50%+ of their net worth in that stock felt?
Where it goes wrong
The first surprise is usually the tax bill. Companies typically withhold 22% federal on vested shares, but most high earners are in the 32%, 35% or 37% bracket. If $500,000 vests in a year, about $110,000 gets withheld. At a 35% rate you actually owe about $175,000. The missing $65,000 shows up in April.
The second one is worse, because it’s money you’ve already paid tax on. Your 1099-B often lists a cost basis of zero, as if the shares were free. Sell $500,000 of stock, and your return can show a $500,000 gain on shares you were already taxed on when they vested. Neither TurboTax nor a rushed preparer will catch it. The IRS certainly won’t point it out. You file, pay six figures you never owed, and probably never find out.
The third one sneaks up on you. Every vest adds a little more, your position gets bigger, and selling starts to feel like leaving money on the table. Then one day you look up and half your net worth is in one company. You’re not diversified. You’re all in on your employer and calling it a portfolio.
It works until it doesn’t. A bad earnings call, a lawsuit or your company CEO decides to have multiple affairs (cough Jensen cough), and suddenly everything from your paycheck to your health insurance to your investment portfolio is all tied to the outcome of one company. Ask anyone who held Cisco or Intel in 2000. These were the "It'll never go down, right?" stocks of the late 90s early 2000s. It took each of them about 25 years just to get back to even.
Are you betraying your company by selling?
A lot of people feel guilty selling. They believe in the product, they like their team, and they see the progress the company is making towards their long-term mission. Selling often feels like betrayal of everything you and your team are working on ... but is it? I'd argue it's far away from that. Your company pays you in stock because it’s cheaper than paying you in cash, not as a test of your loyalty. Your CEO sells shares on a schedule every quarter, and nobody calls that betrayal. Selling your RSUs doesn’t mean you’ve stopped believing in the company. It means your financial future - like your mortgage, your kids’ college and your retirement - don't depend on the outcome of one singular stock.
The checklist
Know every vest coming in the next 12 months: dates, share counts and dollar amounts. If you can’t name your next vest date right now, you’re probably not ready for the tax bill that comes with it.
Add those vests to your salary and bonus. If the total puts you above the 22% bracket, your company is under-withholding on every vest, and you’re the one who owes the difference.
Pay the gap now. Raise your withholding or make quarterly estimated payments. If your income is over $150,000, paying in 110% of last year’s tax generally keeps penalties off the bill.
Know your trading windows. The worst time to learn you’re in a blackout is the day the stock drops 20% and you can’t sell. If you’re an insider, a 10b5-1 plan sells for you on a schedule, no matter what the headlines say.
Treat every vest like a $100,000 cash bonus. Would you take that cash and put every dollar into your company’s stock? Keeping your vested shares is the same bet. The tax is already paid, and selling at vest usually costs you almost nothing more. If you wouldn’t buy the shares with cash today, don’t keep them.
Get a plan for your RSUs
You can work through this checklist on your own. Most people mean to, and then the next vest lands first.
Or we can do it together in 30 minutes. Bring your equity portal login and last year’s tax return. By the end of the call, you’ll know three things:
How much you’re likely to owe in April, and whether your withholding covers it
Whether past returns taxed you twice on your RSUs
How much of your company stock to sell, and when
It's a free strategy session.
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