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0 pointsakkartik9y ago0 comments

Grandparent was talking about AMT, which is still a valid concern even with RSU withholding.

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usaar3339y ago· 2 in thread

How? RSUs are taxed at ordinary tax rates when they settle, which is higher than AMT.

Do you have an example where someone's AMT would be higher with RSUs than ordinary taxes?

My admittedly neophyte understanding is that a) RSUs are counted as income, b) if income exceeds some threshold the entirety of it is subject to a higher AMT rate.

Without AMT, if you got stock and paid taxes in stock, you wouldn't care about the effect on taxes if the stock price later tanked. With AMT, however, you get screwed.

usaar3339y ago

AMT (28%) is lower than ordinary marginal rates (35%+).

What you may be thinking about is how some classes of income, like ISOs are treated differently under AMT than under the ordinary code: http://www.taxprophet.com/archives/Stock_Options_0306/ISO%20... http://www.taxprophet.com/archives/Stock_Options_0306/ISO%20... e.g. ISO exercise is not taxed under ordinary income, but is under AMT. Meaning your taxable income could be way higher under AMT, meaning even with the lower AMT rate, you still ended up owing more under AMT than regular.

However, I am unaware of a similar problem existing for RSUs. AFAIK, they are treated the same for AMT and the ordinary system meaning they shouldn't ever "push you into AMT"

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