Data Entry: Salary and other income

This is the second screen in the process to Add a Client.

For a brief overview of adding income to a financial plan watch this short video.


The screen is pre-populated with two different cards for each of the client and co-client: Salary and Social Security.

Default income cards

Enter the current Salary and the anticipated annual increase on the Salary card. For purposes of our projections, Salary will be increased by the amount indicated every year.

The Social Security cards allow you to indicate whether or not clients are receiving social security, plus the timing and amount. Click here for more details on entering Social Security benefits.

You can also enter in additional income sources by clicking the green Add Income button and selecting one of the options. This will create a new card that you can edit.

Goal-Based Planning Method

If you're using the Goal Based calculation method, you are unable to add income as it won't be factored into the calculations.

To learn more about Planning Methods, click here.

Each card will contain fields to enter information specific to that income type.

For each additional income type, you can specify when the income starts and ends. Options include:

  • specific calendar years
  • the client or co-client's specific age
  • "already started" (which presumes the income is valid from today forward)
  • the client or co-client’s year of retirement
  • the client or co-client’s end of plan

Specific Years

If selecting specific years, the “Income starts” year should be the year that you want the income to begin. The “Income ends” year should be the year you want the income to end.

For example, if you want to indicate an annual income amount that occurs in 2020, 2021, and 2022, you would set the “Income starts” year to 2020 and the “Income ends” year to 2022.

Income owned by an individual will end at the earlier of the end year specified and that individual’s end of plan.

Income Types

Salary: For individuals receiving W2 income, enter it under Salary

Self-employment: For individuals who are self-employed, enter their self-employment income here.  Self-employment income is subject to self-employment taxes.  If the 'Service Income' checkbox is checked, it means that the client's income is subject to phase-out of their QBI deduction. All the Schedule C calculations are fed into the tax projection and projected 1040, even though a Schedule C is not displayed on the projected 1040 in the Tax > Details screen.

Pension: Enter the amount and timing of pension income.  Pension income can be for life or a specific period. Optionally, enter the 'Survivor %' to see how much income would be passed on to a surviving spouse.

Annuities: Enter the amount and timing of annuity income for a single-premium income annuity (SPIA) or deferred income annuity (DIA).  Annuity income can be for life or a specific period. Optionally, enter tax parameters for cost basis and exclusion ratio.

Distribution: Use income distributions to illustrate money being withdrawn from qualified accounts. Click here for specifics about how to use Distribution income.

Child Support: Will be taxed as child support

Alimony: Will be taxed as alimony, using rules for divorce agreements signed prior to 2019.

Royalties: Will be taxed as royalties

Inheritance: Enter the amount and year of an anticipated inheritance. Inheritance income is tax free.

Other Income: Use the 'Other' income option to enter in any additional income amounts.  You can use the 'Taxes' drop-down box to select the tax treatment.  All of these options will be reflected in cash flows with the exception of 'Tax credit', which only impacts taxes.

What about my rentals and businesses?

You can enter Rental Income and Business income on the Net Worth page.

Webinar

In one of our weekly webinars, we reviewed different tips and tricks for entering various types of income.  View the webinar here.