Transcript:
In this video, we’re going to discuss an often-missed, but very important, section of the software: Taxes and Other Information.
You can find this section by scrolling down to the bottom of the Dashboard, just above Plan Settings.
Let’s click into it for a moment and take a look at what’s available here.
There are several important settings and planning tools in this section that many users may not realize they have access to.
The first item is the client’s State of Residence.
If you ever accidentally enter the wrong state of residence, or need to change it later, you can do that directly from this section.
Additionally, if your clients live in different states, you can model that here as well by assigning different states of residence to each client individually.
You can also adjust the clients’ Filing Status, such as:
- Married Filing Jointly
- Or Married Filing Separately
By default, the software assumes that clients are using the Standard Deduction.
However, it’s important to know that for high-net-worth clients using advanced planning strategies, such as charitable giving strategies or certain trust strategies, you may want to toggle the Standard Deduction off.
Doing so allows you to model itemized deductions and better reflect the tax impact of those planning strategies.
You’ll also find additional fields in this section for items such as:
- Estate exemption carryforwards
- Capital loss carryforwards
- Taxes due from the previous year
- Or expected tax rebates
If you disable the Standard Deduction option, you’ll also gain access to additional fields where you can manually enter:
- Tax deductions
- And tax credits
Another important feature in this section is the ability to model a future move for your clients.
You can do that using the Steps section.
For example, let’s say your clients currently live in Colorado, but they plan to relocate during retirement to a different state with different tax treatment.
We can model that directly within the plan.
Let’s walk through a quick example.
We’ll change Judy’s state of residence from Colorado to Hawaii.
We’ll set that change to occur at Judy’s retirement and apply it as a step event.
Then we’ll do the same for Philip:
- Change his state of residence to Hawaii
- Apply it at the same timing event
- And save the step
Once those changes are saved, we’ll save the overall updates to the plan.
Now, if we go into Year View and open the Taxes tab, we can review the impact of that move.
In the earlier years of the plan, we’ll see Colorado state taxes being applied.
Then, once the clients reach retirement and move to Hawaii, we should see the state tax treatment change accordingly within the projections.
I hope this has been helpful.
If you have any questions, remember that you can always reach out to our support team by clicking the name of your client in the top-right corner, selecting Request Support, entering your question into the text box, and sharing client access.
Thanks for listening.