I started 2023 as a new year and entered everything to get a clean start. Everything agrees with my old data and now I am able to confirm what I was thinking is a potential bug or at least a requested change to the TABULAR PROJECTIONS. When I look at Taxes in the TABULAR PROJECTIONS, it appears to be displaying taxes for the prior year, 2022, in the current year row, 2023. This is a few hundred dollars compared to several thousand dollars so it's quite obvious and the 2024 row numbers for taxes look like what 2023 taxes are. All the other columns appear to be reflective of the current year row for 2023 unless I'm missing something. I believe this causes the year-end balance of total savings to be higher than it actually will be since the taxes appear to not have been taken out appropriately. Am I missing something? I could totally be wrong but for number consistency, it appears wrong given all the other data seems to be 2023 data in the year 2023 row.
Hmm..., this might be the issue. The Adjusted Gross Income is missing the amounts for "Unscheduled Withdrawals from XX TD" for the two TD accounts that have withdrawals. If I add these into the Adjusted Gross Income then that amount looks correct and I would assume the taxes would then be correct also.
@motogopher Are you remembering that unscheduled withdrawals are included in the AGI for the year AFTER they actually occur (to avoid circular reference errors)??
Stuart
Well, we don't want a circular error. That's a bummer though. It makes it look like I have more money than I really do. We have to pay estimated taxes throughout the year and I do have another spreadsheet for that. If I hadn't started over, I think I would be making incorrect tax payments based on PRC taxes, correct? Don't get me wrong, I love this tool. I wanted to verify what I was seeing and calculate accordingly.
I was going to ask if you can you think of a clean way to fudge a number somewhere to get the correct ending TD account value totals that won't cause other bad numbers but I don't think that will work either. I don't think there is a solution at this time other than to be aware that the account values in real life will end up being less than projected. This is important, at least to me, as I track my monthly progress each month plus it's a double-check that things were entered correctly and going to plan. I can be ahead or behind the goal and make adjustments. I'm familiar with circular references in Excel (wink). I hope there's opportunity to figure something out in the programming.
@motogopher I get it, but please remember that PRC is designed to do long-term projections and not necessarily be a money manager (like Quicken). I've spent many hours investigating iterative tax calculations in the Excel-based Pralana Gold and Excel simply cannot handle it (regardless of the fact that Microsoft claims it works). There is no alternative at this point. HOWEVER, the web-based version of Pralana Gold WILL do iterative tax calculations and this will cease to be an issue next year 🙂
Just for the record, though, Pralana Bronze does do iterative calculations and it works great. But it's pretty simple and does about 10% of the calculations that Gold does.
Stuart
@motogopher Sorry, I don't think there's a way short of iterative tax calculations.
@smatthews51 I just love the flexibility Pralana provides which allowed me to resolve the issue with unscheduled withdrawals from TD. I enter Scheduled Withdrawals from the TD account to eliminate unscheduled withdrawals (which pushes taxes due into withdrawals the following year). Of course taxes go up when adding scheduled withdrawals (spilling into additional but smaller unscheduled withdrawals) but I simply do an iterative adjustment of the scheduled withdrawal amounts by reviewing any resulting unscheduled withdrawals. My Scheduled withdrawals now include the tax withholdings required for each year’s scheduled withdrawals from the TD account. While admiring the now updated accuracy of my plan I realized that my Withdrawal Order was off slightly as it didn't mimic cash flows within my Fidelity accounts. I changed the Withdrawal order from "Your TD, Spouse TD, Regular, Roth" to "Regular, Your TD, Spouse TD, Roth". Since I wanted to keep my Regular Investments limited until I've drawn down the TD accounts (to minimize taxes); I then "tuned" the scheduled W/D amounts from my TD account to keep both my Cash account and also the Regular Investments account balances to a minimum. I did this by monitoring the resulting Account balances & resulting Withdrawals while adjusting scheduled W/D amounts. Perfecto!
@king016 I'm happy to hear it's working well for you! And it should get better next year as we implement iterative tax calculations in the web version so you can avoid the workaround you described above!
Stuart
