Overview
Voyant has updated its US employment tax withholding calculations to provide a more accurate representation of federal and state income tax withholding throughout a client's financial plan.
Previously, employment income tax withholding calculations did not fully account for the standard deduction or the combined filing status of married couples. This could result in higher estimated tax withholding during the year, followed by projected tax refunds or credits when the software reconciled the client's annual tax liability.
With this update, Voyant now incorporates applicable standard deductions into employment withholding calculations, helping to align estimated withholding more closely with the client's projected annual income tax liability.
This improvement provides a more realistic view of available cash flow and helps advisers make more informed planning decisions.
Note: This change will become available on the 30th of October, 2026.
What's Changed?
Standard Deduction
When the Standard Deduction is enabled under Dashboard → Taxes & Other Financial Information, Voyant now accounts for the applicable deduction when calculating employment income tax withholding.
This reduces estimated withholding to reflect the portion of employment income that may be offset by the standard deduction.
For clients with multiple employment incomes, the available deduction is applied progressively across those incomes, rather than applying the full deduction independently to each employment.
Married Filing Jointly
For married couples filing jointly, Voyant now accounts for their joint standard deduction when estimating employment withholding.
The calculation allocates half of the joint standard deduction to each spouse's employment income.
This is particularly beneficial for households where one spouse earns significantly more than the other.
Additional Deductions for Clients Age 65 and Older
The updated methodology also considers applicable additional deductions for clients age 65 and older, including:
- The additional standard deduction available based on age.
- The enhanced senior deduction, where applicable and subject to adjusted gross income limitations.
These deductions are considered when calculating federal employment withholding, based on the client's eligibility and selected deduction settings.
How Does This Affect My Client's Financial Plan?
The primary benefit of this update is a more accurate representation of the income available to your client throughout the year.
Previously: Voyant could estimate employment tax withholding that exceeded the client's projected annual tax liability. This could create a recurring tax refund or credit in the plan, even when the client's tax settings were otherwise correct.
Now: By incorporating applicable deductions into employment withholding calculations, Voyant can more closely align estimated tax payments with the client's projected annual tax liability.
As a result, advisers may notice:
- Lower estimated employment income tax withholding for clients eligible for applicable deductions.
- Fewer or smaller projected tax refunds and credits resulting from excess estimated withholding.
- More accurate available surplus, as less income may be unnecessarily allocated to estimated tax payments during the year.
- Improved cash flow projections, providing a clearer picture of the funds available for spending, saving, or investing.
Important: This update does not change the underlying federal or state income tax rules used to calculate the client's annual tax liability. It improves how estimated employment withholding is calculated and reflected within the plan.
What About Social Security and Medicare Taxes?
The standard deduction does not reduce Social Security or Medicare payroll taxes (FICA).
These taxes continue to be calculated separately from federal and state income tax withholding and are not reduced by this update.
Where Can I Review the Calculations?
You can review the impact of the updated methodology within the Year View.
Step 1: Review Tax Settings
Navigate to Dashboard → Taxes & Other Financial Information.
Confirm that the client's filing status, state of residence, and Standard Deduction settings are correct.
Step 2: Review Employment Tax Withholding
Navigate to Year View → Expenses → Income Tax.
Review the estimated income tax withholding associated with the client's employment income.
Step 3: Review Annual Tax Liability
Navigate to Year View → Taxes.
Here, you can review the client's applicable deductions, annual tax liability, and Taxes Already Paid.
Comparing these figures will help you understand how employment withholding contributes to the client's overall tax position.
Will This Eliminate All Tax Refunds or Credits?
Not necessarily.
While this enhancement should significantly reduce situations where excessive employment withholding creates recurring projected tax refunds or credits, differences may still occur.
A client's overall tax liability can be influenced by other sources of income, deductions, tax credits, investment activity, and changes in circumstances throughout the plan.
The objective of this enhancement is not to eliminate all refunds or credits, but to ensure that employment withholding more accurately reflects the client's anticipated tax obligations.
Summary
This enhancement improves the accuracy of US employment tax withholding calculations by accounting for applicable deductions and filing status.
For advisers, the result is a more realistic picture of a client's available income, fewer artificial tax refunds or credits, and more reliable cash flow projections to support financial planning conversations.