Glossary - 83(b) election

A section 83(b) election is a letter you send to the Internal Revenue Service letting them know you’d like to be taxed on your equity, such as stock options, on the date the equity was granted to you rather than on the date the equity vests. Put simply, it accelerates your ordinary income tax. 

Filing an 83b election is part of the process of purchasing your stock options early, to avoid significant tax bills later after your options have gained in value.

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