Situations · The equity windfall

The equity finally paid out. Now make it survive the tax year.

A bonus from a raise, a vest, an exercise, a payout from a liquidity event — suddenly this is the biggest income year of your life, and the default withholding was never designed for it. What you do before December 31 decides how much of it you keep.

What's actually at stake

Withholding is not a tax plan.

Equity compensation is taxed on its own schedule, withheld at rates that rarely match your real bracket, and concentrated in one company — usually your employer. Each of those is fixable. None of them fix themselves.

01

The withholding gap

Supplemental income is typically withheld at a flat rate well below a high earner's actual marginal bracket. People discover the difference in April, as a bill. A projection in the payout year turns that surprise into a plan.

02

Concentration risk

After a big vest, your salary, your bonus, and a large share of your net worth can all depend on one company. Diversifying is a tax event — which is exactly why it should be scheduled, not improvised.

03

The bracket spike is temporary — use it

Charitable bunching, retirement plan room, deduction timing: strategies that are marginal in a normal year do their best work in a spike year. The window is the calendar year of the payout.

04

What the money is for

A windfall without a plan becomes lifestyle. A windfall with a plan becomes independence. The difference is written down.

How Cannon helps

Built for the 30-to-50 crowd this actually happens to.

Windfalls don't wait for retirement age, and neither do we. Our clients skew toward founders, executives, and professionals mid-career — people who want a real plan, move fast, and expect their advisors to keep up. CPA-led tax strategy and fiduciary investing, one table.

Common questions

People in this spot usually ask.

My employer withheld taxes on my RSUs. Am I done?
Often not. Supplemental withholding rates frequently sit below a high earner's true marginal rate, so a large vest can leave a significant balance due. A mid-year projection tells you exactly where you stand while there's still time to respond.
Should I sell my vested shares right away?
There's no universal answer — it's a balance of tax cost, concentration risk, and your confidence in the company. What we'd argue is universal: the decision should be a written policy you set once, not a gut call you re-litigate every vest.
I got a large one-time payout this year. What's the first move?
Before anything else: a tax projection for the year, so every other decision — charitable giving, retirement contributions, timing of other income — is made against real numbers instead of guesses.
Do I need a financial advisor if I'm still in my 30s or 40s?
A windfall year is precisely when planning compounds hardest — you have more years ahead for good decisions to pay off. The habit of waiting until 60 comes from an era when advice was sold with products. Fiduciary planning is about the decade in front of you.

Educational only — not investment, tax, or legal advice. Every situation is different; the right answer depends on the numbers, and that's what the strategy session is for.

Start here

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Sit down with a fiduciary — not a salesman — and leave with a complimentary strategy for your exact situation, whether or not you ever hire us.