The tax settings provide the option for users to specify their withdrawals in either net or gross terms. Using the net tax option, once the net required income that the client would receive is specified, the software will compute the full amount of income required from the portfolio by properly treating allowances and band rates.

For the gross tax option, the total required income is required, which includes an allowance made for tax. The software then calculates and deducts what the client’s marginal rate of tax is.

The tax calculations are dynamic in the following sense. The initial income (gross or net) is withdrawn from the investment accounts, based on the selected withdrawal order, and the exact amount from each account is decided at the beginning of each year based on the spending and inflation rules.

If an account runs out of money during a year, then the remaining income that was originally scheduled to be withdrawn from this account will be withdrawn from the remaining accounts - again based on the selected withdrawal order. In this case, the remaining income will be taxed based on the properties of the accounts that will be withdrawn.

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