35. Common Tax Pitfalls to Avoid When Managing Your Equity with Daniel Hodgin

Show Notes

When it comes to your equity, every decision, whether it’s to do something with your shares, or to do nothing at all, comes with a tax consequence. But sometimes, the consequences of that action or inaction, are less obvious, until it’s a year later, the tax bill is due, and you have no idea how you ended up in this mess.

And while paying more taxes is simply a function of making more money, there is obviously something to be said for being proactive and doing your best to mitigate that tax bill, no matter how inevitable it may seem.   

In this episode, Malcolm Ethridge is joined by Daniel Hodgin, founder and CEO at Silicon Valley Tax Group, to discuss common tax traps and pitfalls to avoid when managing your equity compensation. Together, Malcolm and Dan break down the nuances of RSUs, ESPPs, and ISOs, and share some of their own rules of thumb for anyone who receives equity as a part of their total compensation each year. 

Dan Hodgin discusses: 

  • Keeping track of your cost basis to avoid reporting mistakes 
  • The importance of keeping ESPP shares with your company’s broker
  • Critical factors to consider when acting on your stock options
  • How to navigate exercising your ISOs without exceeding the AMT crossover point
  • And more

Connect With Daniel Hodgin:

Connect With Malcolm Ethridge:

About Our Guest:

Dan started his career in the field of taxation at Mohler, Nixon, & Williams, LLC. There, under the tutelage of some of the most respected tax specialists in the Bay Area, he worked on thousands of tax returns for a variety of client types. As his career progressed, Dan became a specialist in the area of high-net worth individuals and his clients included some of the world’s wealthiest people. It was working with those clients that gave Dan the exposure to some of the most complicated tax situations and allowed him to become the tax expert that he is today.

Disclosures:

The information provided is for educational and informational purposes only, does not constitute investment advice, and should not be relied upon as such. It should not be considered a solicitation to buy or an offer to sell a security. The views expressed in this commentary are subject to change based on market and other conditions. This writing may contain statements that may be deemed forward‐looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur. Be sure to consult with your tax and legal advisors before taking any action that could have tax consequences. Investments in securities and insurance products are: NOT FDIC-INSURED | NOT BANK-GUARANTEED | MAY LOSE VALUE

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