83(b) Walkthrough, plain English.

An 83(b) election lets someone receiving restricted stock, often a founder or early employee, choose to be taxed on the stock's value at grant, when it is usually low, rather than as it vests, potentially saving significant tax. It must be filed with the IRS within 30 days of the grant. We keep your cap table organized around it.

Because paying tax on a low value at grant, rather than on a potentially much higher value as the stock vests, can save substantial tax as the company grows, which is why founders with restricted stock commonly file it. We flag when it matters so the decision is made deliberately within the deadline.

You must file the 83(b) election with the IRS within 30 days of the stock grant, and the deadline is strict with no extensions, so missing it forfeits the election permanently. We flag this deadline prominently so it is not missed, since a late 83(b) simply cannot be made.

Founders and early employees who receive restricted stock subject to vesting, especially when the current value is low, are the typical candidates, since the benefit is largest before the stock appreciates. We flag whether your grant fits so you consider the election while it can still be filed.

You lose the ability to make the election, so you would be taxed on the stock's value as it vests, potentially at much higher values, which can be costly. We flag the deadline at grant so the 30-day window is not missed, since it cannot be recovered afterward.

Yes: you pay tax up front on stock that might later lose value or that you might forfeit before vesting, so there is a downside if the company fails, which is part of the decision. We flag the trade-off so you weigh the potential tax savings against the up-front cost and risk.

It is most relevant when stock is subject to vesting, since without the election you would be taxed as each portion vests, while with it you are taxed once at grant. We flag how vesting and the election interact so your equity is handled correctly from the start.

You file the election with the IRS within 30 days and provide a copy to your company for its records, so it is an IRS filing, not just an internal one. We flag the process so the election is filed correctly and documented on your cap table.

We form the corporation, organize the cap table, and flag the 83(b) election and its 30-day deadline alongside vesting, coordinating with your counsel, so your equity is set up correctly and the election is not missed.