83(b) Election Tax Savings Calculator
An 83(b) election lets you pay tax now on the value of unvested stock — at today's low FMV — instead of as it vests at potentially much higher prices. Saves six figures for early-stage startup founders. 30-day filing deadline.
| With 83(b) (file within 30 days) | |
| Ordinary income at grant | — |
| Tax at grant | — |
| LTCG at sale (FMV − grant basis) | — |
| Total tax | — |
| Without 83(b) (tax at vest) | |
| Ordinary income as it vests | — |
| Tax at vesting | — |
| Total tax | — |
An 83(b) election is an IRS notice you file within 30 days of receiving restricted stock. It elects to recognize the stock's current FMV as ordinary income immediately, instead of as it vests. For early-stage startup founders and employees, this converts what would be massive future ordinary income into long-term capital gains taxed at 0/15/20%.
Why 83(b) Matters
Without 83(b): you owe ordinary tax on the FMV at each vesting date — potentially 37% on stock worth $10/share that was nearly worthless at grant. With 83(b): you owe ordinary tax now on $0.01/share × shares, then 15-20% LTCG on all future appreciation. For founders with 4M shares at $0.001 strike, this difference is often $500K+ of tax saved.
The 30-Day Deadline
Strict statutory deadline — no extensions, no relief. File within 30 days of the grant date (not the offer letter date). Send via certified mail with return receipt to the IRS service center where you file your individual return. Keep proof of mailing.
When 83(b) Is Wrong
Don't file 83(b) if: (1) you'll leave before vesting — you've prepaid tax on shares you'll never own. (2) FMV is unlikely to grow — no upside to capture. (3) Cash is tight — you owe the tax in cash this year even though shares are illiquid. (4) Stock might be re-priced down — you can't undo 83(b).
Last updated May 2026. Sources: IRC Section 83 (Cornell Law), IRS Rev. Proc. 2012-29 (sample election).