Decisions Before the Company Grows
Austin tax planning often starts early, when a founder receives stock worth very little, an employee gets options or a company is choosing where to do its research. Choices made then can determine the tax on a sale years later. Other clients come with a move from California, a house to buy or a retirement from state service. BOMCAS works with Austin owners and families remotely on these decisions, with the client's attorney and investment adviser involved where needed.
Our Texas tax planning page covers entity and property decisions statewide; this one is about Austin equity, exits and research.
Founder Stock and 83(b)
Restricted stock is normally taxed as it vests, but an 83(b) election within 30 days of receiving it lets the founder pay tax on today's value instead. If the value is near zero and the company later succeeds, that can turn a large amount of future wage income into capital gain and start the holding period for QSBS. The risk is that no refund is available if the stock is later forfeited or becomes worthless. We review the terms and the value before the deadline.
Option Exercises and AMT
Exercising incentive stock options can create alternative minimum tax on the spread between the exercise price and the value, even without a sale. Exercising in stages over several years, or early in a year when a later sale can be made if needed, can reduce risk. Non-qualified options are wages at exercise, so the timing is about the expected future value and the cash needed to pay tax.
QSBS and Exits
For qualifying C corporation stock issued after July 4, 2025, the federal QSBS exclusion is 50 percent after three years, 75 percent after four and 100 percent after five, up to $15 million or ten times basis per company. Earlier stock has its own limits. The company must meet the tests when the stock is issued and during most of the holding period, and some businesses are excluded. Checking eligibility before a funding round or conversion can preserve the exclusion.
Research Credits and Where Work Happens
Domestic research is deductible immediately from 2025, while foreign research is still amortised over 15 years. That makes the location of developers and engineers a tax decision as well as a staffing one. The federal research credit, the payroll credit election and the enhanced Texas research credit should be planned together, not claimed independently after year end.
Moving From California
Many Austin clients arrive with options and RSUs earned in California. California keeps taxing the part earned there even after the move, so the timing of exercises and sales needs to include that tax. A sale of a business after a real move to Texas may avoid California tax on some of the gain, but only if the residence change is genuine and documented.
Property Tax and Retirement
Austin homes carry high property taxes, so the homestead exemption and appraisal protest each spring matter. State and UT employees approaching retirement should plan rollovers, pension start dates and Roth conversions before required distributions begin.
What We Model
- Founder and employee equity choices.
- AMT and cash needed at exercise.
- QSBS eligibility and holding periods.
- Research cost location and credits.
- Move dates, property tax and retirement.
Austin Tax Planning Questions
Why make an 83(b) election?
To pay tax on restricted stock at today's value rather than as it vests, starting the capital gain and possible QSBS holding period early.
Can I owe tax on options I have not sold?
Yes. Exercising incentive stock options can trigger AMT even without a sale.
Does moving to Austin remove California tax on my options?
Not all of it. California can still tax the part earned while working there.
Does research location affect tax?
Yes. Domestic research is immediately deductible from 2025, but foreign research is still amortised over 15 years.
Talk to BOMCAS About Tax Planning in Austin
A plan uses up-to-date books and filed company and personal returns. Equity events must be coordinated with payroll, purchase timing affects use tax, missing years need catch-up filing, and a Canadian founder should review both countries before changing residence. The rest of our statewide coverage runs through business filings, personal filings, sales tax, bookkeeping, payroll services, back tax work and Canada–U.S. matters, with the Texas overview as a starting point.
Tell us what you are working on in Austin and BOMCAS will reply with the next steps and the records needed for a quote. Send a note from the contact page or the form below, call 780-667-5250 or write to info@bomcas.ca. The Austin overview covers every Austin service. This is general information, not advice for a particular taxpayer.