For many Triangle Area tech professionals, restricted stock units (RSUs) make up a growing share of total compensation and often a growing share of long-term wealth.
In Raleigh, Durham, Cary, and Chapel Hill, we frequently see high-earning tech employees who are building wealth quickly but are caught off guard by the tax impact of RSUs. The issue isn’t poor decision-making or lack of discipline.
It’s a hidden tax mistake that’s easy to make and easy to miss until it shows up on your tax return.
Why Are RSU Taxes Often Higher Than Expected?
When RSUs vest, your employer typically withholds taxes automatically. While this gives the impression that taxes are “handled,” it is often insufficient for those in higher brackets.
While most companies withhold federal taxes on RSUs, it is done so at a flat rate, not your actual marginal tax rate. For higher earners, especially those with bonuses, equity compensation, or a working spouse, the real tax bill is often much higher.
A Simple Example
Imagine this scenario: Hypothetical example for illustrative purposes only.
- RSUs vest with a value of $200,000
- Your employer withholds roughly $44,000 in federal taxes (22%)
- Your true combined federal and state tax rate is closer to 35–40%
That gap can result in a potential $25,000–$35,000 owed, often discovered months later, right before April 15. Individual results vary based on total household income, filing status, and available deductions.
This is one of the most common RSU tax mistakes we see among Triangle tech professionals.
What Tax Rate Applies to RSUs?
Here’s the key point many people miss: RSUs are taxed as ordinary income when they vest.
They stack directly on top of:
- Salary
- Bonuses
- Other equity compensation
For high earners in the Triangle area, that can push income into higher tax brackets quickly, especially in years with strong stock performance or career changes.
The issue isn’t the RSUs themselves. It’s the lack of proactive RSU tax planning. Learn more about how RSUs work and are taxed on Investopedia.
Another Potential Issue: Too Much Wealth in One Stock
Taxes are only part of the story.
Many tech employees unintentionally build up a large position in their employer’s stock over time. RSUs vest, shares accumulate, and suddenly a single company represents a meaningful percentage of total net worth.
This creates two risks at once:
- Tax risk if sales are poorly timed
- Investment risk if company performance declines
Most families wouldn’t choose this level of concentration, it happens gradually, without a clear plan.
When Do RSU Tax Mistakes Become More Costly?
RSU tax issues tend to surface during periods of change, such as:
- A job transition
- A promotion or compensation increase
- An IPO or liquidity event
- A year with unusually high income
Without coordination, RSU income can unintentionally create tax spikes, cash flow stress, or rushed decisions at the worst possible time.
This is where planning ahead often makes a meaningful difference.
How Coordinated Planning Helps Reduce Surprises
RSU decisions don’t live in a vacuum. They affect:
- Taxes
- Cash flow
- Investment strategy
- Long-term financial goals
At Pathfinder Wealth Consulting, we work with Triangle Area tech professionals alongside their CPAs to help coordinate equity compensation decisions. The goal isn’t to replace your tax professional, it’s to ensure RSUs are viewed within the full financial picture.
That coordination often helps families:
- Avoid under-withholding surprises
- Reduce unnecessary stock concentration
- Make more intentional sell-and-reinvest decisions
- Plan ahead instead of reacting at tax time
The Bottom Line for Triangle Tech Professionals
RSUs can be a powerful wealth-building tool.
The hidden mistake isn’t receiving RSUs, it’s assuming the tax impact is already solved.
A proactive review during the first quarter of 2026 can uncover issues while there is still time to adjust.
A Smarter Way to Review RSUs Before April 15
For many Triangle tech professionals, RSUs are simply too impactful to review only once a year at tax time.
At Pathfinder Wealth Consulting, we help families:
- Coordinate RSU decisions with their CPA
- Model tax outcomes before shares vest or are sold
- Align equity compensation with long-term goals
If RSUs represent a meaningful part of your compensation, a proactive conversation may help reduce surprises and improve clarity. Contact us today to schedule time to speak with one of our experienced Wealth Advisors.
This material is intended for informational and educational purposes only and should not be construed as specific investment, tax, or legal advice. Tax laws are subject to change and may vary depending on individual circumstances and state of residence. Hypothetical examples do not represent the experience of any specific client. Investment involves risk, including the possible loss of principal. Please consult with a qualified tax professional regarding your specific situation before making any financial decisions. To learn more about how we work with clients and our fiduciary commitments to you, view our Form CRS Client Relationship Summary