SIPS allows you to forecast effective tax rates for any year of your income plan. You can add these forecasted rates directly within the Add Income Tax function. For SIPS Essentials users, simply enter a hypothetical, rounded rate in the Add Income Tax function. In SIPS Advanced, tax estimates will match exactly between the Income Plan and the Cash Flow and Tax Advisor Page. To configure your forecasted tax rates, use the Cash Flow and Tax Advisor page.
Below is a hypothetical example of a client making a yearly amount of $100,000 and you would like to configure out the effective tax rate while working.
To learn more about Add Inc Tax functions within SIPS Essentials see articles:
- Calculating and Applying Tax Rates in SIPS Essentials
- Setting Effective Tax Rates for SIPS Essentials
If you would like to learn more about advanced tax planning in SIPS Advanced see article:
To learn about setting up tax calculations options for income and expesne see articles:
- Tax Calculation Option: Adding Assets into a Structured Income Plan
- Tax Calculation Option: Adding Income and Expenses into a Structured Income Plan
To learn more about forecasting effective tax rates see articles:
Step 1: First Year Income: Note the first year's income. You will use this need this in the Cash Flow and Tax Advisor to calculate the effective tax rate for the first year.
Step 2: Cash Flow and Tax Advisor: Click on the Cash Flow and Tax Advisor button underneath the Client’s name heading.
Step 3: Edit: Click on the green Edit button underneath the Cashflow and Tax Advisor heading.
Step 4: Add Scenario: Click on the green Add Scenario button underneath the Cashflow and Tax Advisor heading.
Step 5: Tax Filing Name: Click on the dropdown to select the tax filing (client 1, client 2, or joint). 
Step 6: Tax Filing Year: Click on the dropdown and select which tax year you would like to use. SIPS has the ability to create hypothetical returns for past and future years. 
Step 7: Scenario Title: Enter in a new title for the scenario.
Step 8: Wages: Enter in the total income into the wages cash flow and tax return columns.
Step 9: Calculate: Click on the green calculate button underneath the Cashflow and Tax Advisor heading.
Step 10: Condense: Click on the green condense button underneath the Cash Flow and Tax Advisor heading.
Step 11: Eff Tax Rate: SIPS Essentials rounds the effective tax rate (e.g., 13.614% displays as 13.6%), leading to a slight difference from the Structured Income Planning page.
Step 12: Approximate Tax Calc: Take note of the approximate Tax Calc. Due to SIPS Essentials rounding the effective tax rate there will be a discrepancy with the number on the Structured Income Planning page.
Step 13: Save: Click on the green Save button underneath the Cashflow and Tax Advisor heading.
Step 14: Structured Income Planning: Click on the Structured Income Planning button underneath the Client’s name heading. 
Step 15: Edit: Click on the green Edit button underneath the Structured Income Planning heading.
Step 16: Add Inc Tax: Click on the green Add Inc Tax button underneath the Structured Income Planning heading.
Step 17: Tax Name: Enter in a Title for the income tax column.
Step 18: Starting Effective Tax Rate: Type in the effective tax rate. SIPS only allows two decimal places (e.g., 13.61% instead of 13.614%).
Step 19: Save: Click on the Save button underneath the Manage Tax heading.
Step 20: Structured Income Planning: You will automatically be taken back to the Structured Income Planning page and two new columns have automatically appeared, the Inc. Tax and After Tax Income.
Step 21: Display Options: Click on the green Display Options button underneath the Structured Income Planning Heading.
Step 22: Column Display Options: Click on the green View Tax Rates button.
Step 23: Structured Income Planning: The Income Tax Column will automatically show the rounded amounts.
Step 24: Save: Click on the green save button underneath the Structured Income Planning heading.
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