Last-Chance Tax Moves for RSUs, Bonuses & Variable Pay

Posted on December 8, 2025 by Dan Pascone

TL;DR: December is your cleanup window if RSUs/bonuses pushed you into higher brackets. Patch under-withholding via a W-4 change or an estimated payment, and consider front-loading giving with a donor-advised fund. Then lock next year’s diversification with a rules-based 10b5-1 plan so equity sales run on autopilot—and move you toward a work-optional life.
Last updated: December 15, 2025

Simple December moves to keep high income from spilling into avoidable taxes and penalties

Maya had a career year—big base, three RSU vests, and a six-figure bonus—then got blindsided in April: a five-figure tax bill plus underpayment penalties. The culprit? Supplemental withholding that lagged her true marginal rate.

If your income spiked this year, December is the moment to clean up withholding, use focused giving, and set a rules-based equity plan so next year doesn’t turn into another scramble.

📊 How RSUs, Bonuses, and Commissions Stack on Top of Your Salary

RSUs, cash bonuses, and commissions are wage income. They stack on top of base pay, often pushing you into higher brackets. Many employers withhold at a flat supplemental rate that can be far below your actual marginal rate—creating April surprises and penalties.

⚙️ Three December Levers to Avoid Tax Pain in April

1) Use Your Last Paychecks to Fix Withholding

Project total 2025 tax with your CPA/planner.
Submit an updated W-4 and request extra federal/state withholding on your final paychecks/bonus.
Withholding is treated as if paid evenly all year—often the cleanest way to satisfy safe-harbor rules and avoid penalties.

2) Top Up With an Estimated Payment if Needed

If payroll changes won’t cover the gap, make a one-time estimated payment in December (federal + state).
Quick, simple, penalty-reducing—coordinate amounts with your tax pro.

3) Turn Generosity Into a Tax Strategy

Appreciated stock gifts: avoid capital gains and deduct fair market value (subject to rules).
Donor-advised fund (DAF): bunch a larger gift this year for a bigger deduction, then grant to charities over time. Learn how a DAF works: Tax-Smart Giving via DAF.

📈 What to Do With This Year’s RSUs and Company Stock

RSUs are taxed at vest. The sell/hold decision is now about risk, liquidity, and goals. If you’ll need cash within 0–2 years, sell and de-risk into cash/short bonds. Longer-dated goals? Use a plan—don’t make each vest an emotional one-off.

🗓️ Lay Groundwork Now With a 10b5-1 Equity Sale Playbook

Adopt a plan while “clean” (no MNPI) and respect cooling-off periods.
Set cadence, price floors, and tranche sizes so sales happen in blackout windows and without emotion.
Start in December: map next year’s vest schedule, choose a concentration ceiling (e.g., 15–25% of investable net worth), and coordinate with compliance. Primer: 10b5-1 Plan for RSUs & Diversification.

🧠 Making Sense of Last-Chance Tax Moves

You can’t change that this was a spike year—but you can choose how costly April feels. Patch under-withholding now, consider a focused DAF gift, and convert equity sales into a rules-based, low-stress process that fuels your work-optional life.

🔑 Key Takeaways

Supplemental withholding often under-withholds for high earners—fix it now via W-4 or an estimated payment.
Use a DAF to bunch charitable deductions into a spike-income year.
Sell near-term-need shares; systematize the rest via a 10b5-1 plan.
Design equity rules that support a flexible, work-optional path.

❓FAQ

How do I know if I’m under-withheld for 2025?

Project your total tax with your CPA; compare to year-to-date withholding. If there’s a gap, adjust W-4 withholding now or make an estimated payment in December.

Is a donor-advised fund overkill for smaller gifts?

No. A DAF can be useful even for five-figure gifts in a spike year because it pulls the deduction into this year while letting you grant over time: how a DAF works.

When should I implement a 10b5-1 plan?

When you’re “clean” and well before you want trades to start, given cooling-off periods. Start planning in December for Q2 execution: 10b5-1 overview.

How much company stock is “too much”?

Many executives cap single-stock concentration around 15–25% of investable net worth. Above that, diversify systematically using a 10b5-1 plan.

How does this tie into a work-optional goal?

Lower tax drag + automated equity diversification accelerates optionality. Here’s a practical framework for the transition: work-optional strategy.

📚 Suggested Reads & Tools

👉 Ready to clean up 2025 and systematize 2026?

Book a Wealth Clarity conversation. We’ll map your actual 2025 income, patch withholding, right-size giving, and draft a 10b5-1 equity playbook that runs in the background—so you can focus on living your version of a rich life.

Educational only—not tax, legal, or investment advice. Consult your professional advisors for personal guidance.