The items that you enter here affect income taxes.
It is important that you distinguish between salaried and self-employment income, because the FICA and Medicare tax percentages are different.
For self-employment income, enter the bottom row of the clients' Schedule C. If the cash flow from the business is different, adjust that on the Cash Flow Tab.
On the EditClient | Clients Tab, you control MasterPlan's treatment of Social Security Benefits. (See Client Data Entry - Detailed.)
If you decide to enter the benefits, rather than have MasterPlan calculate them, be sure to enter the entire benefit. MasterPlan will determine its taxability.
You can press the View Database button to see the calculated benefits, if applicable.
Although MasterPlan can calculate these from items entered in the database, you might want to override or adjust the figures here.
For example, if the clients are carrying forward losses from previous years (such as Passive, Ordinary Income, or Capital Losses), you can enter them here. MasterPlan will consult the clients' situation to determine how these items might affect taxes.
You can adjust these losses on the Cash Flow Tab, if there is no gain or loss of cash flow in a given year from this item.
If you have entered Retirement Assets on the asset database, then you should handle the payouts on those forms. If you enter the payout here, MasterPlan will not be able to determine from which asset the payouts are coming.
If the client is already retired, you might want to enter a pension or defined benefit income stream here.
Remember you can click on the View Database button to see what figures will be generated from the database.
There is no other place in the database to enter this figure.
If you enter the contributions to retirement funds here, MasterPlan will perform some calculations to determine if the contributions can be used to lower taxable income.
This is probably OK, if you just want to perform a quick tax estimate.
However, MasterPlan will not be able to add these contributions to given retirement assets. So, if you are looking at the clients' situation long term, you probably should define the retirement assets and include the contributions there. MasterPlan can then build up the assets and calculate the payouts based on the balance in each account.
Use this row to enter adjustments such as the applicable deduction for medical insurance for self-employed people, or for tax-deductible alimony payments.
MasterPlan does not assume that these items affect cash flow. If the figures you enter here do affect cash flow, be sure to include them in the Living Expenses, Extraordinary Living Expenses, or the Living Expenses Budget.
These cells are locked. MasterPlan automatically calculates them from entries you make on the Itemized Deductions Tab.
You can enter preference and tax credit items here or on the Investment Model form (accessed through the Portfolio Menu). These items do not necessarily affect cash flow, so if they do, be sure to account for them on the Cash Flow Form or in Living Expenses.