Simplifying Section 83(b): New IRS Form Coming Soon
The IRS is set to release an official form for the Section 83(b) election, a welcome development for individuals and entities granted restricted stock, stock options, or LLC interests. This election lets taxpayers pay taxes on these assets at grant rather than after vesting, potentially reducing tax liability if the asset appreciates. The official form will streamline the process, reduce errors, and help meet the strict 30-day filing deadline.
Current Process for Filing an 83(b) Election
To make a Section 83(b) election, a written statement containing detailed information about the grant must be filed with the IRS within 30 days of receiving the asset. Missing this deadline gives up the election option.
The New IRS Form
Currently, taxpayers are responsible for drafting their own 83(b) election statements, which often leads to mistakes such as incomplete information or incorrect valuations. The IRS’s new official form will address these issues by giving a standardized format with clear instructions.
The official form’s release date has not yet been announced, but taxpayers will likely be able to submit it online, by mail, or through tax software.
What’s Next?
The IRS’s official 83(b) election form will bring much-needed clarity and structure to the filing process. Taxpayers and advisors will benefit from reduced administrative burdens and improved compliance.
If you’ve recently been granted restricted stock, options, or LLC interests, now is the time to evaluate whether an 83(b) election is a beneficial tax strategy. Consult a ShindelRock CPA for guidance and stay tuned for the IRS’s announcement regarding the form’s release.