83(b) Election Calculator & Filing Helper
See the tax savings from filing an 83(b) election, plus a ready-to-send IRS letter template. Don't miss the 30-day deadline.
1 · Tax savings calculator
Your stock
Par value for founder stock, or strike price for early-exercised options.
Usually equals price paid for founder stock. For early-exercised options, this is the 409A FMV at exercise.
Reasonable estimate of share value 4 years out, based on plausible Series B/C valuations.
Federal + state combined. ~45% is typical for a CA founder at high income.
Federal LTCG + state. Federal 20% + 3.8% NIIT + state (CA 13.3%) ≈ 37% max; common is 23-28%.
Assumes 25%/year linear vest and linear FMV growth from grant to vest. Future capital gains tax on appreciation ($1,399,972 at sale) is separate.
2 · Filing helper & deadline tracker
30-day clock starts from your stock purchase date. Mail via USPS Certified with Return Receipt.
Letter inputs
Used in the letter; determines which IRS service center to mail to.
This is a template, not legal advice. Have a startup lawyer review your letter before mailing.
Letter template
ELECTION TO INCLUDE THE VALUE OF RESTRICTED PROPERTY IN
GROSS INCOME IN YEAR OF TRANSFER UNDER INTERNAL REVENUE
CODE SECTION 83(b)
The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal
Revenue Code of 1986, as amended, and the regulations promulgated thereunder, to
include in gross income for the taxable year 2026 the excess (if any) of the
fair market value of the property described below at the time of transfer over
the amount paid for the property.
1. NAME AND ADDRESS OF TAXPAYER:
Name: [Your Full Legal Name]
SSN: [Your Social Security Number]
Address: [Your Street Address]
[City, CA, ZIP]
2. DESCRIPTION OF PROPERTY:
1,000,000 shares of common stock of [Company Name, Inc.] (the "Company").
3. DATE OF TRANSFER AND TAXABLE YEAR:
The property was transferred to the taxpayer on June 26, 2026.
The taxable year for which this election is being made is 2026.
4. NATURE OF RESTRICTIONS:
The shares are subject to a vesting schedule under which they are forfeitable
to the Company in the event of termination of services. Vesting occurs over
four (4) years with a one (1) year cliff, and monthly thereafter.
5. FAIR MARKET VALUE AND AMOUNT PAID:
Fair market value per share at the time of transfer: $0.0001
Total fair market value of the property: $100.00
Amount paid per share: $0.0001
Total amount paid for the property: $100.00
6. AMOUNT TO INCLUDE IN GROSS INCOME:
The excess of the fair market value over the amount paid is the amount to be
included in gross income, which is $100.00 minus $100.00.
7. COPY OF ELECTION:
A copy of this election has been furnished to the person for whom the
undersigned performs services.
Signature: _______________________________________ Date: ____________
[Your Full Legal Name]
[ THIS TEMPLATE IS NOT LEGAL ADVICE - HAVE A LAWYER REVIEW BEFORE MAILING ]Mailing checklist
- Print two signed copies of the letter
- Self-addressed stamped envelope (SASE) for IRS to return one date-stamped copy
- USPS Certified Mail with Return Receipt (the green card)
- Mail to the IRS service center for your state (see IRS Form 1040 instructions)
- Give a copy to your company's board secretary for company records
- File the IRS-returned date-stamped copy with your permanent tax records
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Why the 83(b) is the most expensive form you'll ever mail
At incorporation, your founder stock is worth approximately nothing. Par value times your share count is typically a few hundred dollars. If you elect to be taxed on it NOW under Section 83(b), you owe tax on that tiny number - essentially zero. From that moment, every dollar of appreciation is a capital gain, not ordinary income.
If you don't file, you owe ordinary income tax on the FMV-minus-cost of each 25%-vesting tranche as it vests over 4 years. Your company's 409A FMV will grow substantially in those years. You'll owe income tax on phantom paper gains, often without any liquidity to pay it.
The 30-day deadline is absolute
The 30 days runs from the date your stock purchase agreement is executed and you pay for the stock - not from incorporation, not from your start date. If you incorporate on the 1st and sign your founder stock purchase agreement on the 15th, your clock starts on the 15th. Get this on your calendar with reminders at days 5, 15, and 25.
What to include in your letter
- Your full legal name and Social Security Number
- Your spouse's name and SSN if applicable
- Your address
- The taxable year (the year you're making the election)
- A description of the property (e.g., “6,000,000 shares of common stock of [Company Name]”)
- The date you acquired the property and date the restrictions lapse (vesting schedule)
- Fair market value at the time of grant (e.g., $600.00 = 6,000,000 × $0.0001)
- Amount paid (typically equals FMV for founder stock)
- Statement that you are making the election under Section 83(b) of the Code
- Your signature and date
How to mail it (do this exactly)
- Print two copies of the signed letter.
- Put both copies and a self-addressed, stamped envelope in an envelope to the IRS service center for your state (see IRS 1040 instructions).
- Send via USPS Certified Mail with Return Receipt - keep the green card.
- The IRS date-stamps one copy and returns it in your SASE. Keep this with your records forever.
- Give your company's board secretary a copy for the company records.
Frequently asked questions
- What is an 83(b) election?
- An 83(b) election is a one-page letter you send to the IRS within 30 days of receiving restricted stock (or early-exercised options). It elects to be taxed NOW on the spread between fair market value and what you paid, rather than as the stock vests over time. For founders whose stock is essentially worthless at incorporation, this means paying ~$0 in tax now and converting all future appreciation into capital gains.
- Who needs to file an 83(b)?
- Anyone receiving restricted stock subject to vesting, or anyone early-exercising stock options. This includes co-founders at incorporation, employees who early-exercise option grants, and advisors receiving restricted stock. If your stock vests over time and the company will be worth more later than it is now, you almost certainly want to file an 83(b).
- What happens if I miss the 30-day deadline?
- You cannot file an 83(b) late. Period. The 30 days runs from the date you received the stock (signed your purchase agreement and paid for the stock). If you miss it, you owe ordinary income tax on the FMV-minus-cost of each vesting tranche as it vests. For successful startups, this is often hundreds of thousands to millions in additional tax. It's the most expensive paperwork mistake a founder can make.
- Where do I mail the 83(b) election?
- To the IRS service center where you would normally file your federal income tax return. The address depends on your home state. As of 2026, addresses can be found on IRS Form 1040 instructions. Send via certified mail with return receipt - keep proof of mailing.
- Do I need to send anything else with the 83(b)?
- Send: (1) the 83(b) election letter signed and dated, (2) a copy of the same letter (which the IRS will date-stamp and return to you), and (3) a self-addressed stamped envelope for the return copy. Also give a copy to your company and keep one with your personal tax records. Some practitioners recommend attaching to your next federal tax return too - most don't anymore, but it can't hurt.
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