SIPS Advanced offers nine Tax Calculation Options for Incomes:
For accurate tax calculations, you must correctly set the Tax Calculation Option for every income source within the SIPS plan. This how-to guide provides the step-by-step instructions for a hypothetical 1099 Worker who has multiple complex income streams. Below are the hypothetical income streams for this example.
- Independent Contractor; Self Employ Biz-QBI (line S1): $24,000
- S-Corporation; Self Employ Biz not QBI (line S1): $36,000
- Long Term Residential Lease; Sch E (no SE Tax) - QBI (line 1): $12,000
- Triple Net Lease; Sch E (no SE Tax) - not QBI (line 1): $60,000
- Yearly Gift; Not Taxable: $10,000
To learn about Tax Calculation Options see articles:
- Tax Calculation Options for Accounts
- Tax Calculation Options for Incomes for a W-2 Employee/Traditional Worker
- Tax Calculation Options for Income for a 1099 Worker/Multi-Stream Earner
Step 1: Approx Income Tax: Note the amount and percentage in this column.
Step 2: Edit: Click on the green Edit button under the Structured Income Planning heading.
Step 3: Manage: Click on the green Manage button within the SS column.
Step 4: Tax Calculation Option: Since this is the Social Security Income, by default the setting will already be adjusted to Social Security (line 6a of the tax form).
Step 5: Save: Click on the green Save button under the Manage Income heading.
Step 6: Approx Income Tax: You will automatically be taken back to the Structured Income Planning page. Note the amount and percentage changes (if applicable) in this column.
Step 7: Manage: Click on the green Manage button within the Independent Contractor column.
Step 8: Tax Calculation Option Dropdown Arrow: Select the dropdown arrow located in the Tax Calculation textbox, and select: Self Employ Biz-QBI (line S1).
Step 9: Save: Click on the green Save button under the Manage Income heading.
Step 10: Approx Income Tax: You will automatically be taken back to the Structured Income Planning page. Note the amount and percentage changes (if applicable) in this column.
Step 11: Manage: Click on the green Manage button within the S-Corp column.
Step 12: Tax Calculation Option Dropdown Arrow: Select the dropdown arrow located in the Tax Calculation textbox, and select: Self Employ Biz not QBI (line S1).
Step 13: Save: Click on the green Save button under the Manage Income heading.
Step 14: Approx Income Tax: You will automatically be taken back to the Structured Income Planning page. Note the amount and percentage changes (if applicable) in this column.
Step 15: Manage: Click on the green Manage button within the Long-Term Residential Lease column.
Step 16: Tax Calculation Option Dropdown Arrow: Select the dropdown arrow located in the Tax Calculation textbox, and select: Sch E (no SE Tax) - QBI (line 1).
Step 17: Save: Click on the green Save button under the Manage Income heading.
Step 18: Approx Income Tax: You will automatically be taken back to the Structured Income Planning page. Note the amount and percentage changes (if applicable) in this column.
Step 19: Manage: Click on the green Manage button within the Triple Net Lease column.
Step 20: Tax Calculation Option Dropdown Arrow: Select the dropdown arrow located in the Tax Calculation textbox, and select: Sch E (no SE Tax) - not QBI (line 1).
Step 21: Save: Click on the green Save button under the Manage Income heading.
Step 22: Approx Income Tax: You will automatically be taken back to the Structured Income Planning page. Note the amount and percentage changes (if applicable) in this column.
Step 23: Manage: Click on the green Manage button within the Yearly Gift column.
Step 24: Tax Calculation Option: Leave the selection at the default setting "Not Taxable."
Step 25: Save: Click on the green Save button under the Manage Income heading.
Step 26: Approx Income Tax: You will automatically be taken back to the Structured Income Planning page. Note the amount and percentage changes (if applicable) in this column.
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