Tax Tales: Real-Life Cases Decoded with FP Alpha's Tax Projector

From Roth conversions and traditional IRA contributions to business sale installment planning, capital loss harvesting, state-by-state job comparisons, and short-term rental income modelling, this webinar shows you exactly how to build each scenario step by step and present the results to your clients.

What You’ll Learn

• How to model Roth conversions at different amounts ($250K vs $500K) and compare the tax impact of accelerating income into a low-income year
• Traditional IRA contribution analysis showing clients the exact dollar savings of making a deductible contribution, even for small amounts
• Qualified Charitable Distributions (QCDs) for clients taking RMDs who are charitably inclined, and when this strategy becomes more valuable over time
• Business sale planning comparing lump-sum recognition vs installment sale spread across multiple tax years, with multi-year column comparisons
• Capital loss harvesting to offset above-average capital gains, including how short-term and long-term losses differ in value
• State-by-state job comparison modelling a move between states with different income tax rates, including filing status changes and quarterly payment estimates
• Short-term rental income modelling for clients considering Airbnb or similar platforms, and the tax differences between short-term and long-term rentals
• How to use the Tax Projector alongside the Roth Simulator bringing numbers from one tool into the other for a complete picture

Chapters

Click a timestamp to jump to that section of the webinar.

1. 0:00 — Welcome & Poll
2. 4:14 — Introductions — Josh & Hannah Near (CPA)
3. 5:30 — Scenario 1: Roth Conversion in a Low-Income Year (Dorothy & William)
4. 11:36 — Scenario 1: Live Demo in the Tax Projector
5. 15:25 — Scenario 2: Traditional IRA Contribution (Leah)
6. 19:11 — Scenario 3: Qualified Charitable Distribution / QCD (John)
7. 24:12 — Scenario 4: Business Sale — Lump Sum vs Installment (Henry & Mary)
8. 30:19 — Scenario 5: Capital Loss Harvesting (Henry & Mary)
9. 35:33 — Scenario 6: State-by-State Job Comparison — Colorado vs Wyoming (Jill)
10. 42:30 — Scenario 7: Short-Term Rental / Airbnb Income (Leah)
11. 47:23 — Wrap-Up & Q&A Session

Key Takeaways

The Projector Updates Tax Rules Automatically When You Change the Year

When you upload a client’s tax return (e.g., 2022) and then change the scenario year to 2024 or 2025, the Tax Projector automatically adjusts all corresponding thresholds, deduction limits, and bracket boundaries. You don’t need to manually look up or update any of these figures. This is particularly useful when modelling strategies across different tax years, such as installment sales or multi-year Roth conversion plans.

Even Small Adjustments Create Tangible Value for Clients

Several scenarios in this webinar involved relatively modest numbers: a $6,500 IRA contribution saving roughly $1,200, or a $9,300 QCD saving approximately $4,000. These may not be life-changing amounts individually, but showing clients the exact dollar impact of a decision builds trust and demonstrates the value of working with an advisor. The Tax Projector makes it easy to quantify these differences with a single line adjustment.

Multi-Year Comparisons Require Multiple Columns, Not Multiple Reports

For scenarios like business sale installment planning, you can use four columns within a single report to compare outcomes across two tax years simultaneously. Think of columns in pairs: the first two columns show the lump-sum recognition in year one plus the following year, while the second two show the income split across both years. In the webinar example, the installment sale approach saved the client approximately $13,000 compared to recognising all profit in a single year.

The Federal Tax Bracket Line Is a Powerful Client Communication Tool

The Tax Projector displays which federal tax bracket the client falls into under each scenario. While staying in the same bracket isn’t always the most important factor from a pure numbers standpoint, it matters psychologically to many clients. Hannah highlighted this in the Roth conversion scenario: showing that a $250,000 conversion keeps the client in the 24% bracket while a $500,000 conversion pushes them higher can be the detail that helps a client make their decision.

Use the Roth Simulator and Tax Projector Together

The Roth Conversion Simulator can calculate the optimal conversion amount to max out a specific tax bracket. Once you have that number, bring it into the Tax Projector to see the full impact on the client’s overall tax picture, including state taxes, MAGI thresholds, and interactions with other income sources. The two tools are different in purpose but are designed to work in tandem for Roth planning.

Scenario Quick Reference

A summary of all seven scenarios covered in this webinar, with the key input lines and outcomes.

Tips & Best Practices from This Webinar