Restricted Stock Units and Tax Golden Handcuffs

A golden handcuff is when a company offers you money or stock options, but you can only access them if you stay with the company for a certain period of time. Restricted stock units (RSUs) have a vesting period, meaning you can't sell them until they are vested. For example, if you have 1000 RSUs with a four-year vesting period, 250 will vest each year. Once they vest, you can sell them and owe income tax on the difference in value. You can choose to sell them immediately or wait for at least a year to have them considered as capital gains, but there is a risk if their value decreases.