<topic sku="dlxbiz" tNum="288003" author="leighanw" xmlns="x-schema:hhTopicSchema.xml"><index><title>Learn how Money calculates your tax rate in your lifetime plan</title><category>lifeplan</category><klink type="cncpt">Tell me how Money calculates my tax rate in the Lifetime Planner</klink></index>
<content>
<p>Money calculates your tax rate using the <glossary tNum="286989">effective income tax rate</glossary> for your state. For the current year, Money applies the effective income tax rate to the amount shown next to <emph>Annual income</emph> on the <emph>Taxes & Inflation</emph> page.</p>
<p>For every other year in your lifetime plan, Money applies the (assumed) effective income tax rate based on your income for that year. So, when major life events (such as retirement or a big promotion) cause your income to change, Money's effective tax rate will reflect the new income for that year. If you move, Money will take this into account as well.</p>
<p>For special income you add to your lifetime plan, such as an inheritance or the sale of a house or business, you can have Money automatically calculate the tax rate or you can enter a custom tax rate.</p>
</content>
<footer>
<extend>
<tease>Can I specify different tax rates for different income levels over time?</tease>
<reveal>
<p>You don't need to because Money does it for you. If your income changes due to a big promotion, or when you take an extended leave or retire, Money automatically recalculates the tax rate to reflect your change in income.</p>
</reveal>
</extend>
<extend>
<tease>If I adjust my income later, does Money adjust my tax rate?</tease>
