Free stock options and AMT calculator from Fynvorax. Estimate tax and cash needed to exercise ISOs or NSOs, including alternative minimum tax.
We consider that equity compensation is one of the most powerful mechanisms for building long-term, wealth-altering tech equity. However, exercising stock options without rigorous tax modeling is a dangerous legal endeavor. Depending on your grant classification, you might trigger immediate tax liabilities on paper profits that you cannot liquidate. This simulator computes the distinct financial routes for Incentive Stock Options (ISOs) and Non-Qualified Stock Options (NSOs), exposing the hidden danger of the Alternative Minimum Tax (AMT). ISOs vs. NSOs: The Core Tax Divergence The IRS separat
When you pay AMT due to an ISO exercise, that cash is recorded by the IRS as an 'AMT Credit'. In future tax years when your regular income tax exceeds the estimated tentative minimum tax threshold, you can gradually reclaim this credit to lower your tax liability until the credit balance is zero.
This is the ultimate stock option nightmare. If you don't sell during the calendar year of exercise, your AMT tax bill remains locked to the higher FMV on the day of exercise. If the stock drops 90%, you could theoretically owe more tax cash than the total real-world market value of your shares.