Concept

83(b) election

An 83(b) election tells the IRS to tax restricted stock on the grant date instead of as each tranche vests. For early founder stock near zero FMV, that difference is the tax bill. Miss the 30-day window and you do not get a do-over.

Where founders get this wrong

• Treating 83(b) as optional paperwork you can file 'when you get to it.'
• Receiving vesting stock and never confirming whether counsel filed — and for whom.
• Focusing on strike price while ignoring the election deadline that locks the tax treatment.