How the calculators compute results

Federal ordinary income. Marginal walk across the 2026 IRS brackets (single, married-filing-jointly, head-of-household) published in IRS Rev. Proc. 2025-32. Income added by an exercise or vest is walked from the user's stated baseline through the brackets it crosses.

Federal long-term capital gains. 0% / 15% / 20% brackets per filing status, plus the 3.8% Net Investment Income Tax (NIIT) above the MAGI threshold ($200K single, $250K MFJ).

State income + LTCG tax. Per-state ordinary brackets for 2025 (most states publish 2026 brackets in late 2026). Long-term capital gains follow ordinary brackets in most states; preferential treatment modeled for HI, ND, SC, WI, AR, NM. Washington's 7% LTCG-only tax above $270K modeled separately.

Payroll taxes (FICA). When still employed: 6.2% Social Security up to the 2026 wage base ($184,500), 1.45% Medicare on all wages, plus 0.9% Additional Medicare on wages above $200K (single) / $250K (MFJ).

Alternative Minimum Tax follows IRC §55: AMTI = ordinary income + ISO bargain element. Federal: 26% up to $244,500 of AMTI (post-exemption), 28% above. Exemption ($88,100 single / $137,000 MFJ for 2026) phases out at 50¢ per $1 of AMTI above the threshold ($626,350 single / $1,252,700 MFJ).

State AMT modeled for the seven states with an AMT regime in 2025 (CA, MN, IA, CT, CO, NJ, NY) at their published rates and brackets. Other states: state TMT treated as zero.

The AMT-ISO calculator's optimizer searches for the share count and timing that maximizes net final value (after a qualifying disposition) net of AMT premium. Federal AMT credit recovery is modeled when regular federal tax exceeds federal tentative minimum tax in a future year.

Put and call premiums use closed-form Black-Scholes with the underlying's implied volatility. When the calculator has a live option chain (public-ticker pages with listed options), σ is back-solved from the chain by interpolating listed contracts at the requested strike and tenor.

When no chain is available (bare tools page, pre-IPO companies), σ falls back to a sector-typed realized volatility multiplied by an IV-over-RV factor of 1.20. This is approximate by design — real put quotes vary widely with skew, tenor, and strike. Each tool surfaces the σ value it used so you can sanity- check before committing.

Single-stock expected return. When a public ticker is selected, the slider seeds from a blend of trailing-window CAGRs (2-year chain history, 5-year, 10-year where available, anchored at a 5-year mid-horizon for the wind-down calculators). On the bare page, the default is 35%/yr — chosen to match the realized-return cohort of the AI/tech names this tool is built for; users with more conservative views drag it down.

Diversified market return. SPY's trailing return seeds the slider, with a haircut applied for volatility drag (½ × variance × T). 10% is the unseeded default.

Volatility drag (haircut). The expected-sale-price haircut maps from σ via the lognormal half-variance correction, growing monotonically with the hold period. On chain-equipped public tickers it's seeded from chain-implied σ; pre-IPO defaults to 20%.

• Multi-scenario optimization. Each free tool projects one expected case. The full beta product runs bullish, neutral, and bearish in parallel and finds the schedule that performs best across all three.
• Joint optimization across grants. Each tool models a single grant or position. Beta solves the multi-year exercise + vest + sale + hedge schedule across your whole equity portfolio.
• Double-trigger RSUs. Most pre-IPO RSU grants don't settle until a liquidity event. The RSU calculator models single-trigger only.
• QSBS (§1202) exclusion. For pre-IPO ISO holders meeting the 5-year hold and qualifying-corporation rules, §1202 can exclude up to $10M of gain on disposition. Beta models QSBS; the free tool does not.
• $100K ISO limit (§422(d)). Annual ISO grants whose FMV at grant exceeds $100K are reclassified as NSO from the start. The free tool assumes you're within the limit.
• Multi-state moves and dual residency. Single state per scenario; relocation timing not modeled.
• Disqualifying dispositions. ISO projections assume a qualifying disposition (≥1 year from exercise, ≥2 years from grant). Early sales convert to NSO ordinary-income treatment — out of scope.
• §83(b) elections. Out of scope.