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RSUSaver

Methodology

How we estimate the tax picture.

A plain-English walk-through of the approach, the assumptions, and where the numbers can be off.

Updated . Uses 2026 federal tax parameters.

The core idea

RSU vests are ordinary wage income, taxed at your marginal rates. Employers may use the optional flat 22% method for separately identified supplemental wages when Publication 15's conditions are met. Publication 15 requires 37% withholding on the portion of aggregate supplemental wages above $1 million in a calendar year. The calculator treats any other supplemental wages you enter as paid before this vest. Those wages use the first part of the $1 million threshold, then the vest is split: 22% on the portion within the remaining room and 37% on the portion above it. This ordering is a model assumption because the calculator doesn't collect pay dates. If the vest was actually paid first, the split can differ. An employer may instead aggregate the vest with regular wages, which also changes what's withheld. The estimate compares what the vest actually adds to your federal bill against what gets withheld for it. The difference is your gap.

Marginal stacking, not a flat rate

We compute federal income tax on (salary + vest) and subtract the tax on salary alone, using the 2026 brackets and standard deduction for your filing status. That difference is the tax attributable to the vest. It handles vests that straddle bracket boundaries correctly, which a single "your bracket times the vest" multiplication does not: the first dollars of a vest may be taxed at 32% while the last dollars hit 35% or 37%.

The result is a single estimate under stated assumptions, not a decorated range. The math is exact given the inputs; what's uncertain are the assumptions, so we state them instead of widening the number.

The safe harbor

The headline instruction is the estimated-tax safe harbor (IRS Publication 505, IRC §6654): pay in at least 110% of last year's total tax during the year, through withholding or estimated payments, and no underpayment penalty applies regardless of the final bill. The rate is 100% when prior-year AGI was $150,000 or less ($75,000 for married filing separately); the calculator's checkbox handles that. We surface this first because it converts an unpredictable April surprise into one fixed number you can plan against in July.

What the RSU calculator assumes

  • Salary plus vest is your household's ordinary income; the standard deduction applies.
  • No itemizing, no other income, no credits, no pre-tax 401(k)/HSA adjustments.
  • The whole vest lands in the current calendar year at the value you entered.
  • Other supplemental wages you enter are treated as paid before the vest; actual pay dates aren't collected.

What the RSU calculator deliberately doesn't model

  • State income tax: shown as a per-state note, never computed. State treatment of RSU income varies enough that a generic percentage would be false precision.
  • Social Security and Medicare: withheld separately by your employer. The 0.9% Additional Medicare Tax above $200k in wages is also excluded; employers must withhold it above that threshold, so it's roughly neutral to the gap (the Social Security portion caps at the $184,500 wage base in 2026 regardless).
  • Alternative Minimum Tax and the 3.8% Net Investment Income Tax.
  • Multiple vests at different prices; enter the year's total instead.
  • ISOs, NSOs, and ESPP: different rules entirely.

ISO exercise AMT and minimum tax credit recovery

The separate ISO AMT calculator models an exercise held past December 31. The bargain element is the positive part of (exercise-date FMV − strike) × whole shares. It adds nothing to regular income tax at exercise, but is an adjustment on Form 6251, line 2i. In this wages-only model, for standard-deduction filers AMTI = wages + bargain element: the regular standard deduction is added back for AMT.

  • In 2026, the AMT exemption is $90,100 for single and head of household, $140,200 for married filing jointly, and $70,100 for married filing separately. It falls by 50 cents per dollar of AMTI above $500,000 ($1,000,000 for joint filers), never below zero.
  • The exercise-year tentative minimum tax (TMT) is 26% of AMTI above the remaining exemption up to $244,500 ($122,250 for married filing separately), plus 28% of the excess. AMT = max(0, TMT − regular income tax).
  • AMT-free headroom is the largest whole-dollar bargain element for which TMT does not exceed regular tax, found by bisection. Divide by the positive per-share spread and round down for whole-share headroom. A zero or negative spread creates no ISO AMT adjustment. Headroom is the total allowance, not an additional exercise on top of the inputs.
  • The ISO deferral credit is AMT with the exercise − AMT without the exercise. Under this wages-only, standard-deduction model, AMT without the exercise is zero, so the credit equals the exercise-year AMT. This is not a rule that every AMT dollar on a real return is creditable: AMT on exclusion items does not generate this credit.
  • In each later year, usable credit = min(credit remaining, max(0, regular tax − nonrefundable credits − TMT)). Unused credit carries forward; the planner displays up to ten later years, not an expiration date. Wages and the entered annual nonrefundable credits determine the no-sale recovery capacity.
  • A qualifying sale uses regular gain = (sale price − strike) × shares and AMT gain = (sale price − exercise-date FMV) × shares. The sale-year calculation uses preferential long-term capital-gain rates, including the Form 6251 Part III calculation, rather than applying 26% or 28% to all gains. The separate 3.8% net investment income tax uses the regular gain and applicable income threshold; the minimum tax credit cannot offset it.

ISO model assumptions and exclusions

  • Federal only; standard deduction; W-2 wages are the only other income. No itemized deductions, other AMT adjustments, exercise-year credits, or existing minimum tax credit balance. Entered annual nonrefundable credits reduce later recovery capacity; eligibility and phaseouts for those credits are not calculated.
  • One exercise in 2026; no later exercises. Future wages and annual nonrefundable credits are constant at the amounts entered, and all projected years reuse 2026 brackets, deductions, exemptions, and thresholds.
  • A planned sale disposes of all exercised shares and is a qualifying disposition: more than one year after exercise and more than two years after grant. Dates, early-exercise vesting, and 83(b) elections are not modeled.
  • Capital-loss deductions are limited in the sale year; regular and AMT capital-loss carryforwards are not modeled. A falling-price scenario may therefore misstate later credit recovery.
  • The married-filing-separately AMTI add-back above $640,200 AMTI (complete exemption phaseout) is not modeled because its 2026 rate is unsettled. A warning identifies modeled years crossing that threshold, including the sale year. High-income MFS projections need a full return calculation.
  • State taxes and credits, including California AMT, are not computed. Payroll taxes, transaction fees, and the cash timing of payments are outside this projection.
  • Displayed dollars are rounded. Cash needed is strike × shares plus exercise-year AMT, not a full tax bill or an estimated-payment determination.

Sources: IRS Form 6251 and its instructions (line 2i, basis adjustments, and Part III); Form 8801 and its instructions (deferral credits and annual limits); Rev. Proc. 2025-32 §4.10 (2026 AMT parameters); and IRS Publication 525 (ISO disposition and holding-period rules).

Data sources

2026 brackets, standard deductions, and thresholds come from IRS Rev. Proc. 2025-32; the Social Security wage base from SSA's Federal Register notice for 2026 (doc 2025-19763). Supplemental withholding rules from IRS Publication 15; safe-harbor rules from Publication 505. Parameters are pinned by automated tests against those sources and refreshed each year when the IRS publishes new figures.

Privacy, because it's a design input

Every computation runs in your browser. Financial inputs are never placed in URLs and never sent to a server; there is no server to send them to. See privacy for the whole (short) story.