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Tax Calculations

Submitted by spillane56@veri... on 16 November 2009 - 5:24pm

I am having trouble understanding the two detailed tax reports.

TAXES REPORT: The profile includes a single individual with $195,000 in net schedule C income. ESPlanner shows FICA tax of $11,832. But the correct amount is $18,466 (Medicare Portion: $195,000 x 92.35% = $180,083 x 2.09% = $5,223; Social Security Portion: $106,800 x 12.4% = $13,243). Am I missing something?

FEDERAL TAXES-SINGLE FILER REPORT: I don't see where ESPlanner is including 50% of self-employment tax as an adjustment to income. Does this need to be entered separately as a special expenditure excludable from AGI?

Thanks,

Rick

‹ Tax Calculation on Regular Assets Income Tax Rate Projections for Roth analysis ›
Submitted by Laurence Kotlikoff on 17 November 2009 - 10:42am.
1

I believe we fixed this bug a while ago. Please call me at 617 834-2148 before 5 PM today so I can learn what version you are running. best, Larry

Submitted by Dick Munroe on 17 November 2009 - 4:33pm.
2

Are these folks self employed? IIRC, we fixed a problem in FICA for the update currently in Beta but I think it had to do with self-employed folks.

Best,

Dick

Submitted by spillane56@veri... on 18 December 2009 - 6:10pm.
3

I downloaded the most recent update (v2.15.5) and I still don't see the correct tax amounts showing up in the two tax reports. Is this something that was going to be fixed AFTER 2.15.5?

ESPlanner now calculates SE tax of $12,277 (instead of $11,832) but the correct amount is still $18,466.

50% of SE tax still does not show up as an Adjustment to Income (although I now have an extra unidentified amount of $2,827 being added to this column).

Rick

Submitted by Dick Munroe on 19 December 2009 - 10:32am.
4

Nope. As far as I know we're doing everything right at this point. If we've missed something, we'll need a DB to figure it out. The SE tax deduction is NOT handled by the CE in the way one would naturally handle it (a legacy from the original designer) so I'm not 100% sure how it shows up in the reports.

Best,

Dick Munroe

Submitted by spillane56@veri... on 21 December 2009 - 4:49pm.
5

I'll create a support ticket and upload the database. I'll also send you a private email with the PDF report as an attachment.

By the way, is there anything under "MyESPlanner" that tracks the status of a support ticket?

Thanks,

Rick

Submitted by spillane56@veri... on 21 December 2009 - 4:52pm.
6

The reason I ask about Support Ticket status is because I created a Support Ticket earlier this month (with a DB attached) and I have no way of knowing if it was even received.

Rick

Submitted by spillane56@veri... on 21 December 2009 - 5:04pm.
7

It could be that I didn't initiate the Support Ticket correctly.

Submitted by Dick Munroe on 23 December 2009 - 9:19am.
8

There is a problem with the SE calculations that's been there since day one (there has never been an appropriate application of the SE exclusion to AGI in ESPlanner). You've never seen it because until recently we haven't provided you with enough visibility to the details of the tax calculations. There are a number of other problems with things like the Medicare contributions as well. Due to the structuring of the CE, this is not a small change, it's lots of small changes in lots of places and we'll have to do some detailed testing. We will provide a copy of the development version of the CE once we have run these tests but unless I'm overridden we will not be back-porting the fix into the CE that is currently shipping.

Best,

Dick Munroe

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