Mortgage Interest

When you enter mortgage information in your plan, your mortgage interest is included in the tax calculation. The Planner will compare your standard deduction and below the line deductions, including mortgage interest, on an annual basis. We will then apply the deduction that’s most beneficial to you.

Method for entering deductible expenses

You may only account for itemized expenses if you are using the Detailed Budgeter. The Planner will compare your standard deduction and the itemized deductions on an annual basis and apply the one that’s most beneficial to you. The Detailed Budgeter also allows you to classify expenses as recurring or one-time. Recurring expenses include monthly bills and costs that repeat periodically, while one-time expenses are unique, occurring only once within the planning timeframe. Recurring expenses are entered in today’s dollars, and the Planner applies an inflation rate for future projections automatically. One-time expenses, however, should be entered in future dollars.

The Detailed Budgeter also allows you to identify individual expenses such as property taxes and charitable contributions as tax deductible.

Step 1: Navigate to My Plan > Expenses and Healthcare When managing recurring expenses, ensure to enter these in today’s dollars, as the system automatically applies an inflation rate. For one-time expenses, input the future dollar amounts to reflect actual costs for the specified future date.

Step 2: Turn on the Detailed Budgeter

Step 3: Either setup the Detailed Budgeter or (if already set up) press "Edit ✎"

Step 4: Find the appropriate category

Step 5: Press "Add Expense"

Step 6: Select the appropriate subcategory and label the expense

Step 7: Decide the frequency of the expense

Step 8: Enter your expense in both Must Spend and Like to Spend

Step 9: Select 100% deductibility (this is important)

Step 10: Select Start and End dates for the expense

Property Taxes

Your property taxes will display as State and Local Taxes in the Federal Tax Deductions Chart.

Charitable donations

When you're engaged in financial planning, you often manage multiple goals. These goals may include donating to charitable organizations. You may use the above method to account for charitable donations in your plan.

Your charitable donations will display as Gifts in the Federal Tax Deductions Chart.

To view the Federal Tax Deductions applied in your plan, navigate over to the Insights > Taxes Chart.

Pre Tax Payroll Deductions (Health Insurance)

Many employers who provide health insurance and other benefits allow employees to pay for these benefits via pre-tax payroll deductions.

These benefits may include the following:

Employer paid healthcare insurance premiums:

Medical
Dental
Vision

Employer paid life, disability, and accidental death & dismemberment insurance.

If your employee benefit deductions are made in a pre-tax manner, they will reduce your taxable income. For this reason, we recommend excluding this income from your gross income in order to most closely account for your taxable income.

We then recommend excluding any expenses paid in this manner from your healthcare expenses in order to most closely represent your net cashflow.

NOTE: If you follow this method and also have income-linked contributions in your plan, we recommend using the specific dollar amount selection for contributions instead of the percentage amount to ensure accuracy.

Additional Resources and Support

For more information, explore the help guides or tutorials available within the resources section of the Planner. Contact support or financial advisors for personalized assistance.

Addressing Projection Discrepancies

If your recurring expenses and projections show discrepancies, ensure that all assumptions in the Planner are correctly configured. Use the Assumptions Tab to toggle between Future and Today’s Dollars as needed. Selecting Today’s Dollars allows balances to be discounted to their Present Value.