Understanding the tax payments in My Plan

PlannerPlus is currently a forward-looking projection engine. The calculations and projections move forward each month. For this reason, we recommend using tax software or working with a tax professional for current year tax planning.

This Planner is intended to help you create a long term financial plan, understand the interdependencies among plan elements, and make sound decisions. Each plan is founded on multiple assumptions such as asset growth rates, inflation, and income tax legislation. As a result, the estimated account values, withdrawals, and tax liability will fluctuate.

The tax liability provided in the Estimated Taxes Chart represents the actual tax liability for the year.

The Planner reconciles the tax liability of the current year in January of the following year. This is what you see on the Estimated Expenses Chart. That is, the tax liability provided in the Estimated Expenses Chart represents the prior year’s estimated tax liability.

In most years you should be able to match the tax liability from one year's Estimated Tax Chart liability projection with the tax liability of next year's Estimated Expenses Chart. However, in years where unordinary events occur like if your income drops or increases significantly within a year, you will see more variability in the tax projections the following year.