Tax & Compliance
Founder Personal Finance: Paying Yourself, AMT Planning, and ISO Exercise Timing
Collated by Aparna Devalla, CPA
Curated by Rubric Financial
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The Founder Tax Position Is Different
- Founders typically have: (a) below-market W-2 salary, (b) significant equity that may or may not have been exercised, (c) cash distributions from the company occasionally, (d) personal investments + bank interest.
- Most CPAs handle this as a 'normal' tax return. But the equity component creates AMT exposure, ISO timing decisions, QSBS qualification analysis — none of which are 'normal.'
- The cost of getting this wrong: $50K-500K+ in extra federal + state tax depending on equity timing. The cost of getting it right: a few thousand dollars in proactive planning fees.
- Founders should run a tax projection BEFORE each equity event (option exercise, vesting cliff, large vesting, secondary sale). NOT after.
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