Plan your Magic NSO exercise
Calculator · free · no signup · pre-IPOMagic is pre-IPO. Plan your NSO exercise tax (federal, state, FICA) at any expected valuation.
Beta · invite-only · AlphaLatitude Inc. · Free Tools
Your grant
Seeded from secondary-market data, as of Jun 6, 2026
Tax inputs
Hold strategy
Best after-tax payout — at year 1
$180,723
Sell + invest wins by $6,386 over Hold 1 yr.
Estimates only. Not financial advice.
Sell + invest
Best payout| Bargain element (sale − strike) | $316,650 |
| Federal | |
| State | |
| Medicare | −$4,591 |
| Additional Medicare | −$2,850 |
| Market gain over 1 yr at 10.0% | $16,860 |
| LTCG on diversified gain (fed + state + NIIT) | −$4,738 |
| Net at year 1 | $180,723 |
Sell every share immediately; invest the after-tax cash at the market return for 1 yr, then liquidate. Diversified — no single-stock concentration risk.
Exercise + hold 1 yr
| Sale proceeds (year 1) | |
| LTCG tax (federal + state + NIIT) | −$2,242 |
| Net at year 1 | $174,337 |
Sold 2,701 shares at exercise to cover strike + tax; 2,299 shares held 1 yr for LTCG.
Social Security + Medicare are payroll taxes (collectively called FICA) — they apply because you're exercising as a current employee.
Both columns are stated in year-1 dollars: sell-now proceeds compound at the market return and pay LTCG on the gain at year 1; any cash paid out of pocket on the hold side carries the same opportunity cost.
Net at year N — by hold period
Estimates only. Excludes AMT (NSOs do not trigger AMT), state-AMT, multi-state moves, and disqualifying-disposition edge cases. Not financial advice.
You calculated one NSO decision. The beta plans NSOs alongside RSUs and ISOs in a single multi-year tax plan.
Request beta access →About Magic
Magic is a privately held AI company, incorporated in Delaware and headquartered in San Francisco, CA.
Last reported secondary-market price: $73.33 per share (as of 2026-06-06). Your own 409A may differ.
Long-context coding models.
Equity grants at Magic typically include incentive stock options (ISOs) and non-qualified stock options (NSOs).
Eric Steinberger and Sebastian De Ro founded Magic in 2022 with the goal of building an AI software engineer, not just a coding assistant. The company's technical focus is extreme context length: its LTM-2-mini model handles 100 million tokens, enough to process a large codebase in a single pass. Magic raised $117 million in an initial round, then secured $320 million in August 2024 from Eric Schmidt, Sequoia, Jane Street, and Atlassian at a reported $1.5 billion valuation, bringing total funding to approximately $465 million.
Sources: techcrunch.com · sequoiacap.com
OptionsAhoy is an independent tool and is not affiliated with, endorsed by, or sponsored by Magic.
Magic NSO exercise creates ordinary income on the bargain element (federal, state, and FICA) at the price on the day you exercise. The calculator works at any valuation, so you can model your exercise cost at the current 409A FMV, an expected IPO price, or post-IPO scenarios.
Example: at Magic's last reported price of $73.33, exercising 5,000 NSOs with a $22 strike creates a $256,650 bargain element, taxed as ordinary income on the day you exercise. Combined federal + state + FICA on that bargain typically lands between $69,296 and $115,493 depending on your bracket and state. The calculator above computes the exact figure for your situation and compares selling now vs. holding through the long-term capital-gains threshold.
All Magic tools → · Use the generic NSO Exercise Calculator for any company.
Magic equity questions
- How is a Magic NSO exercise taxed?
- Exercising a non-qualified stock option (NSO) creates ordinary income on the bargain element (the price on the day you exercise minus your strike), subject to federal income tax, state income tax, and FICA. The calculator above computes that tax for your Magic grant and compares selling the shares now against holding past the one-year mark for long-term capital-gains treatment.
- Does Magic grant ISOs, NSOs, or RSUs?
- Equity compensation at Magic typically takes the form of incentive stock options (ISOs) and non-qualified stock options (NSOs). Incentive stock options can trigger the alternative minimum tax (AMT) when you exercise.
- Are Magic shares eligible for QSBS?
- They might be. Qualified small business stock (QSBS) under Internal Revenue Code Section 1202 can exclude federal tax on much of the gain when shares were acquired at original issuance from a C-corporation while its gross assets were under $50 million, and held at least five years. Whether your Magic shares qualify turns on when you acquired them and the company's asset size at that time.
One piece of the puzzle.
OptionsAhoy plans your Magic equity alongside hedging, vesting, and de-concentration, across bullish, neutral, and bearish market scenarios. Free during beta.