Income Tax Chart

The Income Tax chart examines how the clients’ tax situation will change over time. The chart looks at both the Effective Tax Rate and combined Average Tax Rate. Any projected Tax Credit Clawback is also displayed as a percentage and will work into the calculation of Effective Tax Rate. The combination of this information helps to outline possible issues and areas of high taxation. Clawback amounts of 15% indicate OAS clawback, whereas clawback amounts closer to 3% indicate Age Credit clawback. See the Taxation Ledger for actual dollar amounts.

Income Tax Breakdown

• Tax Credit Clawback Client – The total value of client’s Tax Credit Clawback represented as a percentage of income.
• Tax Credit Clawback Spouse – The total value of spouse’s Tax Credit Clawback represented as a percentage of income.
• Highest Tax Rate Client – Calculated as the highest tax paid by the client on any one dollar of income. This is a combination of marginal rate and government benefit clawback rate, but is not as simple as just adding the two values together. See Effective Tax Rate for a breakdown of the calculation.
• Highest Tax Rate Spouse – Calculated as the highest tax paid by the spouse on any one dollar of income. This is a combination of marginal rate and government benefit clawback rate, but is not as simple as just adding the two values together. See Effective Tax Rate for a breakdown of the calculation.
• Average Tax Rate – Calculated as the combined average tax rate for both the client and the spouse.
• Client Life Expectancy – The client’s statistical life expectancy at retirement. This is auto-calculated based on the client’s sex, birth date and age of retirement.
• Spouse Life Expectancy – ​The spouse’s statistical life expectancy at retirement but is shown in the chart based on the client’s age. This is auto-calculated based on the spouse’s sex, birth date and age of retirement.

*View the Taxation Ledger for a breakdown of any of these values.