The Quicken 2012 Tax Planner - dummies

The Quicken 2012 Tax Planner

By Stephen L. Nelson

Quicken 2012 comes with a very powerful, very useful Tax Planner. The Tax Planner helps you make a precise estimate of the taxes that you’ll owe. To use the Tax Planner, take the following steps:

  1. Display the Tax Planner.

    Click the Planning tab. Click the Tax Tools button. Choose the Tax Planner command. Quicken displays the Tax Planner window. To move past the introductory information, click Let’s Get Started and then click Next. Quicken shows the second page.


  2. Verify the tax year and filing status.

    In the upper-left corner of the Tax Planner window, notice that the tax year (labeled Year) and the filing status (labeled Status) appear. These are probably correct. Quicken can guess the year by looking at your computer’s clock. It determines your filing status based on information that you supply when you set up Quicken.

    But if one of these bits of information is wrong, click the Year or Status hyperlink. The hyperlinks are those bits of text along the left edge of the Tax Planner window. Quicken displays the Tax Planner Options text boxes, which let you specify the Tax Year and the Filing Status and choose a Scenario.

  3. Enter the wages and salaries that you and your lovely or handsome spouse expect.

    Click the Wages hyperlink. Then, when Quicken displays the Wages text boxes, type your wages and, if you’re married, those of your spouse. Quicken totals your wages and then makes a first rough calculation of the amount you’ll owe in taxes. Of course, Quicken needs to collect some more data before this number is accurate, so don’t freak out yet.

  4. Enter the other income you’ll have from interest, dividends, capital gains, and so on.

    To record the other income that you’ll need to pay taxes on, click the Interest/Dividend Inc, Business Income, Capital Gains, and Other Income hyperlinks and provide the information that Quicken requests. Some of these numbers are pretty easy to guess. Some of them aren’t. You can also look at last year’s tax return or at the year-to-date information you’ve already collected by using Quicken.

  5. Identify any adjustments to your gross income.

    Click the Adjustments hyperlink and then, using the Adjustments to Income text boxes, identify or estimate any adjustments to gross income that you’ll have. Most people make only one adjustment — contributions to a deductible IRA. Self-employed individuals, however, also typically have several other adjustments, including half of their self-employment tax (which Quicken automatically calculates and enters), a portion of any health insurance paid, and Keogh and SEP pension contributions.

  6. Estimate your itemized deductions.

    Click the Deductions hyperlink and then use the Standard and Itemized Deductions text boxes to estimate your deductions for expenses, such as state and local taxes, mortgage interest, and charitable contributions. Alternatively, if you’ll probably or possibly use the standard deduction, carefully check any of the boxes that Quicken uses to determine which standard deduction you should use.

  7. Tell Quicken how many personal exemptions you’ll claim.

    Click the Exemptions hyperlink and then specify the number of dependents you’ll claim on your return. The basic rule is that you get one exemption for every person in your family (you, your spouse if you’re filing jointly, and your kids) as long as they live in your house.

  8. Indicate whether you owe any other taxes or have tax credits you can use to reduce your taxes.

    Click the Other Tax, Credits hyperlink and then use the Other Taxes & Credits text boxes to describe any of the federal taxes you’ll pay in addition to the usual federal income tax.

    The other taxes, by the way, typically include just two taxes: self-employment tax (which is the tax that self-employed people pay in place of Social Security and Medicare tax) and, in special cases, the alternative minimum tax. A bunch of different tax credits exist. You can very possibly look at your prior years’ returns to see if they apply (typically) in your situation.

  9. Enter any estimated taxes you’ve paid or any federal income taxes your employer has withheld from your paycheck.

    Click the Withholding hyperlink and use the Withholding text boxes to record how much money you’ve paid through withholding. Then click the Tax Payments hyperlink and use the Estimated Tax Payments text boxes to record how much you’ve paid in estimated tax payments and to guess how much you’ll pay in the coming months.

  10. Return to the Tax Planner Summary and review the Quicken program’s calculations.

    After you complete the preceding steps, click the Tax Planner Summary hyperlink and review the calculations that Quicken makes.

    Quicken estimates the total tax you’ll pay (which is useful and interesting in itself), the estimated refund or payment you’ll have to make, and one other particularly useful bit of information — your marginal income tax rate (which Quicken labels Marginal Rate). If you want to print a copy of the Tax Planner’s information and calculations, click Print (in the upper-right corner of the window).