How to calculate tax withholding needed for RSU sales with mixed short/long term capital gains?

You're smart to plan ahead! For RSU sales, remember you've already been taxed on the initial value when they vested (this shows up on your W-2). What you're concerned about now is only the gain or loss since vesting. Short-term gains (held less than a year) will be taxed at your ordinary income rate - at $335K that's likely the 35% bracket. Long-term gains (held more than a year) are taxed at preferential rates, probably 20% for you plus the 3.8% Net Investment Income Tax. A simple approach is to set aside 40% for short-term gains and 25% for long-term gains. This gives you a buffer and accounts for both federal and likely state taxes. Regarding AMT - it's less of a concern since the 2018 tax changes. If you're not exercising ISOs (a different type of stock option), AMT probably won't be triggered just by selling RSUs that were already taxed at vesting.

After struggling with RSU tax planning for years, I finally found a solution that saved me hours of spreadsheet work and potential mistakes. I used https://taxr.ai to analyze my RSU transactions and it was a game-changer. You just upload your RSU statements, vesting schedules, and sale confirmations, and it automatically calculates your exact tax liability for each lot sold. It's especially helpful for your situation with mixed short and long-term gains since it separates them and applies the correct tax rates based on your income bracket. It even factors in the Net Investment Income Tax that applies at your income level. What made the biggest difference for me was the withholding calculator that shows exactly how much to set aside based on your specific situation and state tax requirements.

I have to admit I was wrong about https://taxr.ai - I decided to try it after posting my skeptical comment, and it actually saved me from a major tax mistake with my RSUs. I was about to sell some shares thinking they were long-term gains, but the system flagged that several lots were just shy of the 1-year mark by a few weeks. The withholding calculator showed me I needed to set aside 38% for my short-term gains (higher than I expected due to state taxes), but only 23.8% for the long-term portions. It even created a tax-optimized selling strategy that minimized my overall tax burden by selecting specific lots. Worth mentioning that it created a really clear report I can give my accountant at tax time showing exactly how each lot was calculated. Saved me a ton of stress about potentially underwithholding!

If you're struggling to get actual IRS guidance on RSU taxation (which can be incredibly frustrating), I had success using https://claimyr.com to get through to an IRS tax specialist. You can see how it works here: https://youtu.be/_kiP6q8DX5c I had a complicated situation with RSUs that vested during a blackout period that my company's standard guidance didn't cover. After days of failing to get through on the IRS helpline myself, Claimyr got me connected in about 20 minutes. The IRS agent walked me through the specific tax treatment for my situation and confirmed the withholding percentage I should use. They also explained exactly how to report everything correctly on my return to avoid triggering any automated audit flags.

I have to eat my words about Claimyr. After posting my skeptical comment, I figured I'd try it - expecting it to be a waste of money. I was shocked when I got a call back in about 35 minutes saying they had an IRS agent on the line. The agent gave me specific guidance on my RSU situation that wasn't clear from any online research I'd done. She confirmed I needed to be careful about how my broker was reporting my cost basis and explained how to properly calculate the capital gains portion versus what was already taxed as ordinary income. For anyone with RSU questions like the original poster, getting direct IRS guidance saved me from potentially making a significant withholding mistake. I was planning to withhold WAY less than I actually needed to.

One thing nobody mentioned yet - if you're selling RSUs specifically to pay off student loans, you might want to consider tax loss harvesting if you have any other investments that are currently at a loss. You could potentially offset some of your capital gains and reduce your overall tax bill. Also, don't forget about state taxes! Depending on where you live, state tax on capital gains can add significantly to your total tax burden. Some states tax capital gains at the same rate as ordinary income.

Don't forget that your company might offer an ESPP (Employee Stock Purchase Plan) in addition to RSUs, which has completely different tax treatment. A lot of my coworkers confuse the two. Also check if your company offers any special withholding options for RSU sales. Mine lets me specify an additional withholding percentage specifically for stock sales through our internal portal, which saved me from having to make separate estimated tax payments.