I filed my s-corporation in March through LegalZoom, but someone told me to file a the 83b form and I didn't know there was a 30 day deadline. I assume I am screwed when the stocks are vested and I have to pay the taxes. I hear a way to fully vest or can i reissue the stock somehow and file the 83b?
I think a fair analogy on the 83b election is like walking up to pay for your groceries and pulling a coupon out of your pocket and realizing that it is expired. The IRS is not going to honor the coupon.
There are a few ways that this can affect you.
If you failed to make a 83(b) election, each vesting milestone will be a taxable event. “Income” will be calculated as the difference between the FMV of the portion of stock that vested and the original purchase price of the newly-vested portion.
Thus, failure to make an 83(b) election could leave you with a tax bill without experiencing a liquidity event.
Also when you do experience a liquidity event you will be taxed at a higher rate.
I know this is not ideal. If you are the sole owner of your S-Corp there may be some options.
Best to talk to a tax or startup attorney about this one and how to proceed.
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