An 83(b) election allows you to pay taxes on your shares on the date of the acquisition rather than the date the shares vest. In most cases, startup lawyers advise someone who acquires stock that is subject to vesting to file an 83(b) election with the IRS. Consult your own tax advisor for guidance on whether it is appropriate for your circumstances. This article is written only for information purposes.
1. Review and sign 83(b) election form - If you exercise your options on Pulley, you will receive four pre-filled 83(b) election forms via email. Review, date, sign and insert your taxpayer ID for each copy.
2. Send two copies of the 83(b) election form to the IRS - Send the election via Certified Mail with Return Receipt requested. Mail the 83(b) election to the IRS Office where you file taxes.
Sending a second copy of the 83(b) election is not required. We recommend sending a second copy with a self-addressed, postage-paid envelope to request the IRS to return the 83(b) election for record-keeping.
3. Send one copy of the 83(b) election to the company - You can send the signed 83(b) election to firstname.lastname@example.org to update it to your account.
4. Maintain one copy of the 83(b) election for your records
Pulley generates 83(b) elections for early exercise options. Consult with your tax advisors at the time of option exercise or restricted stock grant to determine whether it is appropriate to file a 83(b) election and whether Spousal Consent is required for your 83(b) election.