Creating a Roth Projection from Scenario Analysis

If not yet familiar with these tools, see Enabling and Accessing the Roth Projection Tool and Scenario Analysis.

When a user creates a Roth Projection from Scenario Data, we pre-fill a new, fully editable Roth Projection using income from the scenario. Because Scenario Analysis is a detailed single-year tax tool and the Roth Projection is a simplified long-term model, only some information carries over. Please review the projection and add anything missing before relying on the results.

There are two places to start this from within Scenario Analysis:

• The Additional Options (“...”) menu at the top of a scenario column
• The Roth Conversion Worksheet

1. Open the household’s Scenario Analysis.
2. Click the “...” icon at the top of the scenario column to be used as the basis for the projection.
3. Select Send to Roth Projection from the Additional Options menu.

1. Open the Roth Conversion Worksheet for the scenario (click the pencil/dollar icon next to Roth Conversion).
2. Click Create Roth Projection from Scenario Data at the bottom of the worksheet.

Entering Asset Balances & Other Information

Either path opens the Create Roth Projection from Scenario Data window. Since Scenario Analysis doesn’t track long-term asset balances the way Roth Projection does, enter the following to complete the picture:

• Taxable Assets
• Cost Basis
• Taxpayer 1 Tax-Deferred Assets
• Taxpayer 2 Tax-Deferred Assets
• Roth Assets
• Annual Spending
• Taxpayer 1 & 2 Retirement Age (defaults to 65)

Click Next once these are entered. Before finalizing, click See all information being sent to Roth Projection to review exactly what will transfer — detailed below.

What Transfers Automatically

Setup

• Filing status
• Tax year
• Taxpayer name(s) and blind status

Income

• Taxable wages
• Social Security benefits
• Pensions and annuities
• Roth conversions —choose how many years each taxpayer keeps converting
• Qualified Charitable Distributions (QCDs)
• Self-employment income from each Schedule C business
• Schedule E income — carried in as ordinary income
• Schedule F (farm) income

Deductions

• Total itemized deductions

Entered by users in the Pop-Up (Not from the Tax Return)

• Taxable, tax-deferred, and Roth asset balances
• Cost basis
• Annual spending
• Retirement age (when the taxpayer has earned income) — earned income stops at that age in the projection
• Years of Roth conversion

What Does NOT Transfer

Income That Is Left Out

• IRA distributions / RMDs — the projection calculates RMDs automatically each year from the tax-deferred balance users enter
• Interest, taxable and tax-free / municipal — generated automatically as part of the taxable account's rate of return
• Dividends, ordinary and qualified — generated automatically as part of account returns
• Capital gains — modeled through the taxable account's rate of return, not as a fixed income amount
• Other income — unemployment, gambling, alimony received, etc. — single-year items with no long-term equivalent in the projection
• The detailed Schedule E breakdown; only the net amount transfers — the projection supports one ordinary income amount, not the full rents/royalties/passive/NIIT detail

Deductions That Are Left Out

• Qualified Business Income (QBI / Section 199A) deduction — self-employment income still transfers and is taxed, but the QBI deduction that reduced it in the scenario is not applied, so the projection's tax may look higher
• Standard deduction — the projection will apply the higher of the itemized deduction carried from the scenario (if applicable) or standard deduction in any given tax year
• Adjustments to income — student loan interest, HSA, IRA/Roth contributions, self-employed deductions — not carried over from the scenario

Other Tax Details That Are Left Out

• Tax credits, e.g. child tax credit — not modeled; the projection focuses on the tax impact of conversions
• Alternative Minimum Tax (AMT) — AMT is calculated separately in the projection engine each year
• Withholding and estimated payments — the projection shows tax owed, not a refund or balance due
• Number of dependents — not used, since dependent-based credits aren't modeled

Settings That Are Left Out

• All state tax information — the Roth Projection is federal only
• Rates of return and display preferences — these are projection settings users configure directly, so defaults are used

Completing the Projection

Once created, a confirmation window confirms the Roth Projection was created successfully.

Click Open Projection to go directly to the new Roth Projection, or Close to return to Scenario Analysis.

There is also a Create Roth Projection from Roth Explainer button, which promotes an existing Roth Explainer into a standalone projection. That path keeps everything  already set up in the Explainer (asset balances, rates of return, income shapes) and only refreshes the taxpayer/year/filing-status info and the Roth conversion schedule. It does not re-import raw scenario income the way the button described above does.