Client Specific Tax Assumptions
Taxes
Tax Law
Use the drop-down box to select the tax framework used in calculating the client's projections:
- TCJA sunset 2025: reflects all updated provisions related to TCJA, including the sunsetting of most individual income tax provisions in 2025
- TCJA no sunset: reflects all updated provisions related to TCJA for the entire duration of the plan (ignores the sunset provisions).
- 2017 tax law: reflects all tax provisions prior to enactment of TCJA, as would be used in clients' 2017 tax calculations.
Ordinary Income Tax Rate Adjustment
To adjust the ordinary income tax rate in the future change the dropdown menu from "No Adjustment" to "Increase By". Users can then input the percentage that will increase ordinary income tax rates in a specific year.
Use this field to enter the percentage of dividends assumed to be tax-qualified.
This field indicates the percentage of capital gains that are assumed to be long term capital gains.
Use this area to adjust the average annual turnover in taxable accounts. This value represents annual portfolio balancing and will produce capital gains in the plan.
Enter a percentage of AGI to be treated as a misc itemized deductible when applicable.
Carryover Values from Previous Years
Enter the long term capital loss carryover amount that will impact the client plan. It can be seen adjusting taxes in the Tax module > Tax Estimate > Details > Schedule 1 line 7.
The charitable giving carryover amount- cash will be capped at 60% of the client's AGI. It be seen impacting the plan within the Tax module > Tax Estimate > Details > Schedule A, under Gifts to charity.
The charitable giving carryover amount- appreciated assets will be capped at 30% of the client's AGI. It be seen impacting the plan within the Tax module > Tax Estimate > Details > Schedule A, under Gifts to charity.
The charitable giving carryover amount entered in the Tax assumptions screen will be used after the current years charitable giving entered into the Profile > Goals > Giving > Charitable giving goals area.
Enter the AMT credit carryforward amount from prior years exercise of ISO grants. This can be seen impacting taxes in the Tax module > Tax Estimate > Details > Alternative Minimum Tax form.
Other
Enter the client's MAGI values from the two years prior to the start of your cash flow projections. This will allow for more accurate calculations that rely on a MAGI lookback, such as Medicare premiums and Student Loan IDR plans.
