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1040 Income in Scenario Analysis

This section details wages, interest, dividends, IRA distributions, pension/annuity payments, and Social Security income. There is also a dedicated row for Roth conversions.

Income1

Click the pencil icon to open a worksheet to provide more detailed information.

  • Wages - open the Wages worksheet and enter W-2 income for each taxpayer.  As a best practice, always enter income items per taxpayer instead of using the "override" field. More detailed instructions for using the Wages Worksheet can be found in our knowledge base article here.
  • Other Wage Income - enter other types of wage income as shown below.
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  • Taxable Interest / Qualified and Total Dividends  - enter information directly on the scenario screen by clicking into the field, or click the pencil icon to open the worksheet shown below. Entering information in the Investment Income Worksheet will allow you to make more detailed adjustments, which are used to estimate any Net Investment Income Tax (NIIT).

Income3

Income4-1

Dividends are either classified as qualified or ordinary. Enter the amount of qualified dividends as "Qualified Dividends". This amount should also be included in the amount of "Total Dividends".  Total dividends represent all dividends paid to the client in the tax year, both qualified and ordinary.

This corresponds to Lines 3a and 3b of Form 1040. Note that the IRS refers to "Ordinary Dividends" on Line 3b, which may lead to confusion, as "qualified dividends are also included in the ordinary dividends total required to be shown on Line 3b" per IRS instructions.

  • IRA Distributions and Taxable Pension and Annuities - open the appropriate worksheet to enter the taxable distribution for the taxpayer. For greater detail on using these worksheets, see our article on modeling retirement plan distributions. 
  • Roth Conversion - enter the taxable Roth conversion amount in this worksheet. More on modeling Roth conversions can be found here.
  • Gross Social Security - enter the gross Social Security benefit each taxpayer receives. Holistiplan will automatically calculate the taxable percentage. This calculation is described in greater detail here.
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