What is an 83(b) election?

An 83(b) election tells the IRS to tax restricted stock at grant rather than as it vests. Filed within 30 days of the grant when the stock is nearly worthless, it typically means paying almost nothing now instead of income tax on each vesting tranche's appreciated value later — and it starts capital-gains and QSBS clocks early.

The 30-day deadline is unforgiving and missing it is a classic, expensive founder mistake. Applies to restricted stock and early-exercised options.