Out of scope
ISOs, ESPP, AMT, QSBS: out of scope. This desk is the 22% RSU/bonus hole.
Reviewed August 21, 2026. About. Not tax advice.
Incentive stock options (ISO), employee stock purchase plans (ESPP), alternative minimum tax, 83(b) elections, and qualified small business stock are not this product. An ISO exercise can create AMT without any 22% withholding. An ESPP discount has its own holding-period rules. RSUs almost never get 83(b). If your grant paperwork says ISO or ESPP, stop: the slip on this desk would be the wrong form. We cover RSU vests and cash bonuses withheld as supplemental wages.
Why we refuse
Wrong statute, wrong form, wrong penalty. A confident wrong number is worse than a link to a CPA. Method lists the rest of what we exclude.
FAQ
- I have RSUs and ISOs. Can I still use this?
- Use it for the RSU/bonus slice only. Leave ISO/AMT out of the numbers. Tell the CPA you did that.
- NSOs / non-qualified options?
- Exercise of NSOs is also ordinary wage income and often supplemental. This desk does not model strike price or spread. Type a known spread into “other” only if you already know the income number, then still have a CPA check it.
Sources
- IRS Publication 15 (Circular E) — Supplemental wage withholding: 22% up to $1 million, 37% above.
- IRS tax year 2026 inflation adjustments (Rev. Proc. 2025-32) — 2026 federal brackets and standard deduction.
- IRS estimated taxes — 1040-ES installment dates and underpayment penalty.