Truth Tip, Order of Taxation in Asset Flow
In Asset Flow, we chose to treat each individual asset viewed as the last dollar added or withdrawn in the tax bracket (at the margin). This is because any changes made will impact the overall taxation in that regard. However, when you view all the assets in the summary page, the taxes are equally distributed among all of the assets causing the tax. This can cause some discrepancies when viewing an individual asset against the summary of all assets. In Asset Flow, this means it is possible for an individual asset to use all of the Standard Deduction available when viewed on its own. In the summary page, however, the deduction is evenly distributed to each asset based on its tax liability as a percentage of the whole. Asset Flow, then, shows the individual tax liability of assets AS WELL AS the total tax liability of all the assets combined. Although it can be confusing, it most accurately shows the taxes on an individual and cumulative level.