I work with clergy where part of their pension can be declared as a housing allowance (up to the amount of their actual housing costs) which means it is not taxable for income tax purposes. This will reduce the amount of income tax they owe in retirement significantly.
How can this be handled in ESPlanner or can it?
Thanks,
Bruce
Disclaimer: ESPlannerBASIC, ESPlanner, ESPlannerPLUS and ESPlannerPRO, are educational calculators designed to give users input in mapping out financial futures, but should not be acted upon as a complete financial plan. The creators of these programs are not certified, registered, authorized, or any other type of financial planners. These programs are simply tools for helping you think through economic futures. Its "recommendations" should be viewed as informative inputs into your own decision-making with respect to saving and the purchase of life insurance. ESPlannerBASIC, ESPlanner, ESPlannerPLUS and ESPlannerPRO provide neither economic, financial nor tax advice, which can only be delivered to you by authorized professionals.
RSS
The easiest thing to do is to break that piece out of the pension and enter it as a non-taxable special receipt. Presumably it will always be the right thing to do to use taxable income in a tax exempt fashion so the amount to enter will be the amount of the housing.
Best,
Dick Munroe
Dick, thanks for the insight. Bruce
I concur. best, Larry