Skip to content
English
More support
Go to app.holistiplan.com
  • There are no suggestions because the search field is empty.

What is Range Calc?

While the Solve for Min/Max button will tell you how much additional income it will take before a taxpayer moves to the next effective tax rate, often, you may want to see how the effective rate changes as more components of the total tax bill come into focus.

Jump To:

Webinar Overview
Accessing Range Calc
Range Calc Layout
Colors! What Do They Mean?
Common Range Calc Spikes

   Ordinary Income Graph:

   - 18.5% - Purple (Social Security)
   - 22.2% - Purple (Social Security) 
   - 27.0% - Red (0% to 15% Long-Term Capital Gains Rate)
   - 23.3% - Teal (Phaseout of Enhanced Senior Deduction)
   - 27.8% - Brown (Net Investment Income Tax - NIIT)
   - BONUS: Why adding more income may lower the effective rate on the next $1,000

Advanced Settings


Check out our webinar below, where we provide more color (pun intended!) on what you see in Range Calc and how to interpret those results!

 


Accessing Range Calc:

To access Range Calc, click on the ellipsis (three dots) to the right of any editable scenario scenario title, and you will be taken to a new screen that illustrates the tax impact of the next $1,000, both for Ordinary Income and, separately, for Long-Term Capital Gains.


RangeCalcAccess
 


Range Calc Layout

The "$0" value on the horizontal axis represents not $0 of taxable income, but the taxable income of the given scenario being analyzed. Moving to the right of the $0 point is the equivalent of adding ordinary income or qualified income (depending on which graph within Range Calc you are looking at) to your baseline. Below is an outline of some of the key controls within Range Calc and what each of them does.


RangeCalcChart-2

  • Range Low End - Outlined in blue, this point serves as the origin of the x-axis on your graph. You can reset this number by clicking on the "Rewind" button circled in blue. This will return the figure for the low end range of the graph to be equal to negative taxable income minus $10,000. This ability to enter a negative value is highlighted as well in the note outlined in orange beneath the graph.
  • Range High End - Outlined in red, this sets the far range of your x-axis on the graph.
  • Step Width - outlined in green, this is the step interval of additional income (set to $1,000 by default) along the x-axis.
  • Update Chart/Summary Chart - Select "Update Chart" to reflect your changes to the range bounds and step width. You can also click on the "Summary Chart" button to access a chart of the effective rates for various amounts of income.
  • Medicare IRMAA (Income Related Monthly Adjustment Amount) Thresholds - The vertical dotted lines outlined in pink above represent the MAGI (Modified Adjusted Gross Income) thresholds at which your client will cross into the next IRMAA threshold. The value indicated as a label on these dotted lines represents the annual increase per person for Medicare Part B/D Premiums beyond the base Medicare Part B/D premiums.

As noted in the text outlined in orange in the screenshot above, you can adjust your "Range Low End" to be a negative number, to show the affects of not adding income, but instead of subtracting income. This may be helpful to show the tax implications reducing income (such as by making pre-tax contributions to retirement plans) or reducing the amount of planned Roth conversions would impact the overall tax picture.


Colors! What Do They Mean?

The key to understanding Range Calc is that you’re looking at the effective marginal rate of adding $1,000. If there is no change in the effective rate, you’ll see a flat line.

Range Calc will also illustrate the attribution of the total tax rate using a color coding system. Depending on the scenario in question, the Range Calc chart may include some combination of the following:

  • Black Line - Total Federal tax impact
  • Light blue - taxes on ordinary income (i.e., marginal brackets)
  • Red - taxes on long-term capital gains and qualified dividends
  • Brown - Net Investment Income Tax (NIIT)
  • Purple - Social Security becoming taxable
  • Teal - Phaseout of enhanced senior deduction
  • Gray/black - Refundable child tax credit phase-out
  • Green - credit phase-ins
  • Light purple - Qualified Business Income Deduction (QBID) phaseout
  • Violet - Non-refundable child tax credit phase-out

If you ever need a refresher on what each of these colors means and more details about why they appear (or disappear), you can check out the teal "What Does it Mean?" tab on the right side of the screen in Range Calc as outlined in yellow in the screenshot above.

In addition, though they are not a tax, you can see the impact of additional income on any IRMAA (Income Related Monthly Adjustment Amount) surcharges on Medicare Part B and Part D premiums as indicated by the vertical, gray, dashed lines outlined in pink in the screenshot above.

 

Common Range Calc Spikes

Check out the quick 3-5 minute videos where we cover some of the more commonly seen spikes within Range Calc, both in the Ordinary Income graph and Capital Gains graph.

Ordinary Income Graph:

  • 18.5% - Purple (Social Security) - 10% (Ordinary Income) + 8.5% (Social Security)

     

  • 22.2% - Purple (Social Security) - 12% (Ordinary Income) + 10.2% (Social Security)

     

  • 27.0%- Red (0% to 15% LTCG Rate) - 12% (Ordinary Income) + 15% (LTCG)



  • 23.3% - Teal (Phaseout of Enhanced Sr. Ded.) - 22% (Ordinary Income) + 1.3% Enhanced Senior Deduction phaseout



  • 27.8% - Brown (Net Investment Income Tax - NIIT) - 24% (Ordinary Income) + 3.8% (NIIT)



  • BONUS - Why adding more income may lower the effective rate on the next $1,000 




 

Advanced Settings:




If any of the above features are missing from your view of Range Calc, it may be because of a setting on the Range Calc page. Click on the "Advanced Settings" link with the gear icon located at the top-right of the Range Calc screen, and you will see the following window.


Once within Advanced Settings, you can select the type of income - Ordinary Income & Capital gains or Incentive Stock Options; or the Marginal/Total Tax Rate. You can also check/uncheck the box to make the Medicare IRMAA Part B/D Annual Increase lines visible or not and check the box to add the state tax impact on top of the federal impact as income is added.


If you have questions or need further assistance, please Contact our Support Team!