--- title: What’s behind Musk’s hefty tax bill? - The Hustle description: It has to do with stock options. Lots and lots of stock options. image: https://hs-sbup.thehustle.co/hubfs/The%20Hustle%20News/Assets/Images/2085365586-News-Brief_2021-12-21T021513.006Z-1024x473.webp --- # What’s behind Musk’s hefty tax bill? ![Jacob Cohen](https://thehustle.co/wp-content/uploads/2021/01/IMG_5670-1-modified-768x768.png?width=48&height=48&name=IMG_5670-1-modified-768x768.png) [Jacob Cohen](https://hs-sbup.thehustle.co/author/jacob-cohen) [Jacob Cohen Twitter profile ](https://twitter.com/ImJacobCohen) Published: December 21, 2021 Updated: October 11, 2023 *Visual: Singdhi Sokpo* ![What’s behind Musk’s hefty tax bill?](https://hs-sbup.thehustle.co/hs-fs/hubfs/The%20Hustle%20News/Assets/Images/2085365586-News-Brief_2021-12-21T021513.006Z-1024x473.webp?width=595&height=400&name=2085365586-News-Brief_2021-12-21T021513.006Z-1024x473.webp) This year, me (Jacob) and Elon Musk will be paying a combined [$11B+](https://twitter.com/elonmusk/status/1472754632325795843?s=20) in taxes. Musk has a net worth of [~$243B](https://www.wsj.com/articles/elon-musk-says-he-will-pay-more-than-11-billion-in-taxes-this-year-11640001132#:~:text=Mr.%20Musk%20is%20the%20world's,company%2C%20Space%20Exploration%20Technologies%20Corp.), nearly all of it tied up in ownership of Tesla and SpaceX. The [reasoning](https://www.cnn.com/2021/12/20/investing/elon-musk-11-billion-dollars-taxes/index.html) for the hefty bill is as follows: - Musk is paid through stock options, which give him the right to buy Tesla shares at the price on the date of issue (in this case, back in 2012). - These options are set to expire next August, so Musk has started exercising them — at a tax rate of 40.8%. - Musk will also pay long-term 20% capital gains tax on other stock sales. All told, it’s gonna be one hefty payment. 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