Tax Software With Built In Comparison Tool

If you have both (or all three) tax scenarios clearly in mind, then just work up one, copy the file, then alter it to get to the second, copy and alter again to get to the third. Then you can compare side by side, on screen, on paper, or however else you please.

The problem arises when you want some "what-if" capability, in other words your scenarios are not yet completely locked in. How do you correctly link every entry from Copy A to Copy B? Are the Copy B entries static (don't change once you make the copy), do they vary by a percent of the change you make to Copy A number, or do they always differ by a fixed amount? Then of course you would have to make that choice for virtually every input entry in Copy A that you want to automatically adjust in Copy B.

If fully implemented, imagine how folks who actually *don't* have any income choices might use it creatively to make it appear as if they do! ;-)

-Mark Bole

It's very cumbersome to do this way. It takes time to open up scenarios and regain context.

What I have seen some software do is to support a tabular entry where each scenario is a different column, and you enter in the numbers side by side.

So it's easy to use for input because you literally see the different case options side by side on the same row.

Really well done software could then even create reports that would summarize critical differences in the tax outcomes for each scenario analyzed.

nish

TaxWise offers a comparative, running analysis for MFJ vs MFS. However, all of the other "what-ifs" you mentioned seem to be simply achieved by preparing a basic return with the givens (social security, some pension income, and relatively small amounts of interest income) and then adding any specific: e.g., a specific amound of interest.

In the case of TaxWise, that would instantly display the net effect on the tax due in the running total which routinely is available -- and if you choose, the revised "Social Security Worksheet" could be printed out.

But that should be true for virtually any sofware. I have no breadth of experience myself, but it seems logical that you could plug variables in, and then "unplug" them and substitute others, or combine them. For the cost of a few sheets of paper and some toner (or ink), you would then have the side-by-side results.

Bill

"nish" wrote in

Drake offers the ability to do multi-year "what-if" scenarios. I've not seen one that offers multi "what if" options on the same screen.

So, write one up and we'll read about in the Journal or Accountancy one day.

One software package that does a lot of what you are looking for is Intuit's ProSeries. This software is targeted to professionals, so the cost might be more than want to spend if you only have one return to prepare. ProSeries does have a Pay-per-Return (PPR) option, but you still have to pony up $100 or so to get the program discs.

Turbotax has a "What-if worksheet" with 4 columns.

There you can plug in number of dependents, filing status, income, dividends, qualified dividends, student loan interest, and several other things. I have never used it.

I suspect others have a similar thing. I also suspect that you would not find it as useful as you imagine, unless you were doing it before the end of the tax year to figure out the effect of some action you have control over, such as marriage, or selling stocks.

You mean the effect on the taxable portion of social security income?

I found the following

That is exactly the point of tax planning, right? Tax planning software lets you plan in advance of acting, and yes of course you need to do it well before year end passes.

nish

You could try doing it with a spreadsheet, if you're competent at that stuff. That's what I did. (Actually, mine is year-by-year, but same idea.)

Mine has a little VBA, but just bell-and-whistle stuff IIRC. The most complicated thing is lookup tables, for the tax rates and such. I'd say it wasn't really hard - more, it took (me) a long time to evolve it, as I discovered requirements and fixed problems.

Thanks! I've used TT for years and never knew about this worksheet. It's difficult to find (for me anyhow). The only way I reached it was to use Forms > Go to forms and then click on the "Search" button and search for "What-if worksheet."

I'll give it a try.