83(b) Election Generator

When you receive restricted stock as compensation (common for startup founders and early employees), you normally owe tax as the shares vest — potentially at a much higher value. An 83(b) election lets you choose to pay tax now, based on the current (usually very low) fair market value, rather than later when the stock may be worth significantly more.

Why Founders File 83(b) Elections

At founding, shares are typically worth fractions of a penny. If you file an 83(b) election, you recognize that tiny value as income now. If the company grows and your shares become worth millions, you won't owe ordinary income tax on the increase — instead, you'll pay the lower long-term capital gains rate when you eventually sell.

Filing Instructions

1. Mail the signed form to the IRS office where you file your federal income tax return — within 30 days of the stock transfer.
2. Send a copy to your employer (the company).
3. Keep a copy for your records — attach it to your tax return for the year.
4. If the transferee of the property is a different person, send them a copy too.

Important Notes

• The 30-day deadline is strict and cannot be extended.
• An 83(b) election cannot be revoked without IRS consent.
• If you forfeit the shares (e.g., leave the company before vesting), you do not get a deduction for the amount you previously included in income.