For people who vest RSUs
Most RSU vests are under-withheld once your income clears the 22% bracket.
At higher incomes, the flat 22 percent withholding is usually below your real rate. See how big the gap is on your own vest.
Worked example
A 300-share vest at $120 is $36,000 of income, taxed like salary
for a single filer in California earning $250,000. The flat 22 percent withheld covers less than that income's real marginal rate.
Computed just now, in your browser, by the same engine the app uses.
Start with what you already know
Three numbers. The app asks for your filing status, state, and income next, then computes the full year. Nothing here leaves your browser.
Common questions
Tax was withheld when my RSUs vested. Why do I owe more?
Most employers withhold federal tax on a vest at a flat 22 percent, whatever your actual bracket is.
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If your income puts you in a higher bracket, the difference comes due when you file.
Are RSUs taxed twice?
No, but it can look that way.
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The value at vest is taxed as wages and becomes your cost basis.
A later sale is taxed only on the change since the vest.
Double tax happens when the broker's form reports a basis that is too low and nobody corrects it.
Source: IRS Instructions for Form 8949
Does sell-to-cover take care of the tax?
It pays the amount withheld, and that is all.
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Sell-to-cover is how the 22 percent gets paid.
It does not close the gap between that and your real rate.
Source: IRS Publication 505, Tax withholding and estimated tax
Should I sell my RSUs as soon as they vest?
Selling right at vest adds little or no extra tax, because your basis is the vest-day value.
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Holding is the same bet as buying the stock with cash that day.
Whether to make that bet is your call.
Why trust it
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