Taxation

When the "Tax Wise Distribution Strategy" is enabled, this tab configures the client's taxation during retirement.

TRAK Tax Wise Distribution Strategy works by strategizing a client's distribution in retirement to a specific set of tax brackets. The "Taxation" tab configures the client's tax tables for retirement.

Federal Taxation & State Taxation

These inputs allow for configuring the tax tables. For creating custom tax tables, select the custom option. The table configured is included in the printed report. Alternatively, the custom table editor may be configured by clicking on the editor button on the right side of the custom tax table selection box.

EditorButton

The editor may also be accessed by selecting File/Config from the ribbon bar and selecting "Gap Analysis/Retirement Tax Tables" in the navigator on the left.

Tax Rate Factor

Tax Factor Rate

Tax rates are scalable. To change, adjust slider bar. A Tax Rate Factor of 100% will show tax brackets at what they are.

Note:The Tax Rate Factor impacts federal, state and capital gains.
When increasing the tax rate, the tax rate of each bracket (and capital gains) is limited to 90%. (This top limit can be configured to be less than 90% in Setup/Config/Gap Analysis/Calculator/Gap Analysis).

Start Year

The changes in rate of taxation can during retirement. This control is not enabled if the Tax Rate Factor is 100% (meaning there is not change in the taxation during retirement).

Adjust "Tax Distribution Threshold with Factor

This prompt is onlyh available if the Account Type Distribution Control is selected on the Setup tab (in the Retirement Income Method group).

Marginal Tax Bracket

The Marginal Tax Bracket will be used to make recommendations where additional savings should be deposited.