This is the second part of a four-part article on the Cash Flow and Tax Advisor Calculator. This tool can assist you in determining the effective tax rate for each year within your financial plan. It also includes a worksheet to differentiate between cash flow and tax liabilities. This section provides step-by-step instructions for entering income when the client has retired, is no longer working, and is not yet receiving Social Security benefits.
To learn more about the Cash Flow and Tax Advisor menu see articles:
To learn more about the Cash Flow and Tax Advisor individual column features see articles:
- Hide/Unhide Feature for Individual Tax Columns
- Permanent Deletion for Individual Tax Columns
- Downloading a 1040 Sample Tax Form
To learn more about forecasting effective tax rates see articles:
- Part One: Forecasting Effective Tax Rates While the Client is working
- Part Two: Forecasting Effective Tax Rates While the Client is in retirement and before Social Security Disbursements
- Part Three: Forecasting Effective Tax Rates While the Client is in Retirement and Social Security Starts Up
- Part Four: Forecasting Effective Tax Rates in Retirement: RMDs, Social Security, and Roth Withdrawals
- Part Five: Adding Expenses into the Cash Flow and Tax Advisor Calculator
Step 1: First Year Income While in Retirement: See what incomes need to be modeled in the cashflow and tax advisor to determine the effective tax-rate for that 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 Cash Flow 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: Delete the Cash Flow and Tax Return for the wages. 
Step 9: Short Term Capital Gains: Enter the capital gains associated with the withdrawal from the non-qualified account. For this example, we will assume that $39,575 is a short-term capital gain associated with this withdrawal. You can enter these values in the Cash Flow column, the Tax Return amounts are automatically populated after you click on Calculate. 
Step 10: Long Term Capital Gains: Enter the capital gains associated with the withdrawal from the non-qualified account. For this example, we will assume that $50,000 is a long-term capital gain associated with this withdrawal. You can enter these values in the Cash Flow column, the Tax Return amounts are automatically populated after you click on Calculate. 
Step 11: Calculate: Click on the green calculate button underneath the Cashflow and Tax Advisor heading.
Step 12: Tax Bracket: Scroll down the page and take note of the marginal tax bracket and effective tax-rate "Eff Tax rate.” 
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: Add Adjustment Text Box: Enter in the effective tax rate.
Step 18: Tax Adjustment Check Boxes: Click on the boxes that the effective tax rate will change. 
Step 19: Pick Years: Click on the green Pick Year(s) button. 
Step 20: Tax Adjustment Table: The new effective tax rate will automatically be entered into the Tax Adjustment Table.
Step 21: Save: Click on the green Save button underneath the Manage Tax heading.
Step 22: Income Tax Column: The new effective tax rate will automatically be changed in the Income Tax Column.
Step 23: Save: Click on the green save button underneath the Structured Income Planning heading. 
If you feel you need more support or would like to set up demo time with one of our representatives, please contact us at: +1-888-449-6917 or support@planscout.com.
