Need a report to help you walk through your client's tax return line-by-line? The Tax Explainer Report has you covered!
Watch Holistiplan co-founder Roger Pine's video overview of the Tax Explainer below!
The Tax Explainer is available for all tax returns for tax years 2021 or later, with the exception of returns that include Form 2555 (Foreign Earned Income Exclusion).
New and Improved: Tax returns that include AMT (Alternative Minimum Tax) are now supported in the Tax Explainer!
The Tax Explainer is available to Premium Holistiplan subscribers. To access the Tax Explainer tool, navigate to a client's household in Holistiplan, and look for the Tax Explainer link next to an uploaded return for tax years 2021 and beyond.
The Tax Explainer page will open and you will see the tax return broken down into the six sections below, along with your logo at the top-right and your disclaimer language at the bottom of the page. If you need help customizing your logo and disclaimers, you can learn more about how to do that here. You will also see teal buttons at the top to navigate to the actual tax return, the Tax Report for that return, or Scenario Analysis screen.
Section 1: Income & Wages - This section breaks down the ordinary and qualified income from the client's return, along with pointing you to the line on Form 1040 and the associated forms and schedules where that number originates.
Section 2: Adjusted Gross Income - This section highlights any above-the-line deductions which are deducted from "total income" on Schedule 1 to arrive at the client's adjusted gross income (AGI).
Section 3: Taxable Income - This section details additional below-the-line deductions (or deductions from AGI) to include your client's itemized deductions (or standard deduction if not itemizing), along with any Qualified Business Income deduction. In 2020 and 2021, additional charitable deductions for clients not itemizing would also show up here.
Section 4: Total Tax - This section lays out the composition of the total tax bill for your client. Note the way total tax is composed of ordinary income taxes and the more favorable long-term capital gains (LTCG) taxes. These two taxes make up your income tax, along with additional other taxes that may apply to your client's tax picture, such as self-employment (SE) tax, the additional Medicare tax, the Net Investment Income Tax (NIIT), and/or Alternative Minimum Tax (AMT). 
Section 5: Credits & Payments - This section outlines the various non-refundable credits, refundable credits, withholding, estimated payments, and other amounts reported on your client's return that are used to satisfy their tax bill.
Section 6: Tax Owed - This section summarizes your client's tax picture at the time of filing. Did they owe any additional amounts at filing? Did they get a refund? This section brings it all together to wrap up the tax story for your client.
Taxes can be complicated. The Tax Explainer goes a long way towards helping your clients demystify the different pieces of their tax picture so that they can better understand the various tax planning strategies you will walk them through.