VeriPlan estimates your lifetime annual taxes in 8 different tax categories
The VeriPlan tax planning calculator projects your lifetime annual tax payments in 8 different tax categories. VeriPlan’s fully integrated and automated lifetime annual tax calculator and retirement tax calculator capabilities automatically project your lifetime estimated taxes in these 8 tax categories:
- Federal income taxes on earned income, interest income, retirement income, and other income
- State income tax and local income taxes on earned income, interest income, retirement income, and other income
- Social Security and Medicare taxes on earnings, plus income taxes on Social Security payments in retirement
- Property and real estate taxes
- Federal income taxes on mandatory tax-deferred account withdrawals and on withdrawals to pay living expenses
- State income taxes and local income taxes on mandatory and needed tax-deferred account withdrawals
- Federal long-term capital gains taxes
- State income taxes and local ordinary income taxes on long-term capital gains
For every projection scenario that it develops for you, VeriPlan’s integrated income tax rate calculator and capital gains tax calculator functions automatically present easy-to-understand outputs in both graphical and data worksheet formats. To prevent obsolescence regarding its lifetime estimated tax calculator functionality, VeriPlan allows you to change any and all tax rates and tax limits, in case local, state, and federal income tax rates, property taxes, capital gains tax rates, and other tax rates or regulations change in the future.
On VeriPlan’s “11-Your Taxes” property and income tax calculator worksheet, you can set income and property tax assumptions and enter personal information about your:
- Tax filing status
- Federal income tax exemptions, adjustments, and deductions
- Your property and other non-income taxes
VeriPlan integrates both income tax estimator and capital gains tax software features, and it come already supplied with:
- Graduated US federal income tax rates
- Graduated, flat, or zero state income tax rates, as appropriate, for the 50 states and the District of Columbia
- New York City local income tax rates (You can easily add any alternative local income taxes that you may be subject to.)
- Social Security (FICA) and Medicare taxes
- Self-employment income tax rates and special logic
- Federal dividend and long-term capital gains tax rates
Automated yearly tax calculator projections
VeriPlan’s ’11-Your Taxes’ tax planning worksheet is designed to capture the key tax elements required to develop lifetime tax planning projections that truly reflect your individual and family tax planning situation. This estimated tax software also provides you with significant abilities to modify your tax related data, as your personal situation changes and as federal, state, and local tax laws evolve over the years.
Once you have entered your personal data into the VeriPlan pre-retirement and retirement income tax calculator and have begun to evaluate your personal scenarios, the importance of using financial and retirement planning software with sophisticated tax projection capabilities will become very clear to you. Financial and investment planning software is really quite useless, if it ignores your taxes or if it uses group tax averages that may not apply to your family. VeriPlan’s sophisticated tax planning features can really help to improve your efforts to develop a lifetime financial plan for your family.
This is an example of the projected lifetime annual tax payments graphic that is automatically developed by the VeriPlan tax planning worksheet software. A separate data table in row and column format also accompanies this graphic.
VeriPlan’s lifetime tax rate calculator inputs provide a variety of gray user data entry boxes for you to enter information about your personal tax planning situation. To easily find the tax information needed by this worksheet, just consult your recent federal, state, and local tax returns. In addition to U.S. federal, local, and state income tax calculator functions, you can also use this VeriPlan property tax calculator worksheet to enter information about your property taxes and certain other taxes.
From your earned income, VeriPlan’s fully integrated state and federal tax calculator and self employment tax calculator software will automatically deduct federal and state ordinary income taxes, Social Security taxes (FICA), Medicare taxes, and additional self-employment taxes, if needed. Using the appropriate tax filing status, tax tables, and taxable income, it will automatically determine and deduct these taxes. The VeriPlan retirement planning software also includes fully integrated and automated Social Security tax calculator, pension tax calculator, and retirement income tax calculator capabilities.
Automated annual after-tax projections of net investments and withdrawals
In any particular projection year, if positive net earned income remains after your expense, tax, and debt payments have been made, then these positive net earnings will be invested according to your VeriPlan settings on its various investment-related retirement planning worksheets. If you have negative net income in any particular year, then this shortfall will be made up through automated withdrawals from your projected financial assets. Your projected financial assets include cash, bonds/fixed income, and stock/equity assets held in taxable and/or tax-advantaged retirement accounts. Projected withdrawals will be taken automatically in accordance with choices that you have made on VeriPlan’s financial planning tools worksheets.
In any particular projection year, short-term capital gains taxes, long-term capital gains taxes, and income taxes will be applied automatically in accordance with current federal, local, and state income tax rates and investment taxation rates and rules. With VeriPlan’s yearly tax calculator projections, your projected ordinary income taxes, short-term capital gains taxes, and long-term capital gains taxes will be deducted from asset returns, as appropriate.
In addition, net earnings on investment assets will be reinvested automatically. Reinvested asset returns will be net of both these taxes and your projected investment costs. Any tax basis that you may be carrying for a particular asset will also be automatically decreased or increased, as appropriate.
Whenever you would have a projected yearly earnings shortfall — after expenses, taxes, and debt payments have been made — then VeriPlan will automatically withdraw the necessary funds from your financial assets and apply the required distribution taxes to make up that cash flow shortfall. Most individual taxpayers figure their taxes on asset related gains and losses and make asset tax related cash payments, in the first few months of the subsequent year, as they calculate and file their income tax returns. Therefore, the VeriPlan pre-retirement and post retirement withdrawal calculator deducts these cash tax payments related to required asset withdrawals after the beginning of the following year.
Automated lifetime capital gains tax calculator projections
The VeriPlan lifetime tax planning calculator will also automatically project appropriate taxes related to the taxable yield on your assets and on any capital gains than would be recognized associated with the sale of financial assets. Separately and automatically, the VeriPlan capital gains tax software will project ordinary and capital gains taxes associated with required minimum distributions from retirement accounts and related to asset sales to raise cash to pay for any projected yearly shortfalls between your future income and expenses.
Cash interest and bond interest in your taxable financial asset accounts will automatically be taxed in any projection year at federal, state, and local ordinary income tax rates. Regarding capital gains taxes on equity assets held in taxable accounts, you can project that some percentage of your annual returns would be taxable distributions. Information from your federal tax returns can help you with these estimates.
In summary, VeriPlan provides numerous flexible and automated methods to project the estimated impact of federal, state, and local taxes on your future financial situation. In addition, VeriPlan provides numerous methods for you to customize and adjust its tax rates, tax limits, and other assumptions.
Note that the VeriPlan retirement planning software implements a “conservative” modeling approach, whenever a choice is available. Therefore, projections are more likely to over-state rather than under-state your projected lifetime yearly tax burdens, given current laws and rules. This means that your continued attention to tax optimization for your particular situation as the years go by might yield modest favorable gains relative to the specific tax assumptions that you have chosen to use in VeriPlan.
