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The basics
Tax timing in the plan settings controls when the modeled bill leaves your cash. Same-year payment settles the bill in the year the income arises. Following-year settlement models withholding during the year and a later bill or refund.
Changing the payment date does not move the income into a different tax year.
Illustrative numbers
Leave room for the later bill
Tax liability for the year$20,000
Withheld during the year$15,000
Following-year payment$5,000
The $5,000 is a timing difference, not tax savings. If the year had instead overpaid, the excess would return as a later refund under this setting.
Calculation transparency
How it works in MoneyWhatIf
- 01
In following-year mode, the withholding percentage scales the tax already modeled on the paycheck-side income. A setting of 100% means that modeled tax, not 100% of gross salary.
- 02
The remaining liability, including tax generated by later funding decisions, settles in the following year. Different cash availability can change withdrawals and future investment balances.
- 03
Tax attribution and income-sensitive calculations stay with the year the income arose. For example, delaying the payment does not delay that income’s IRMAA lookback.
- 04
The Estate page includes an unsettled final tax return among obligations left at the end of the projection.
Keep in mind
Model limits
This is annual cash timing; it does not schedule quarterly estimated payments or calculate underpayment penalties.
The year-so-far withholding fields are separate: they credit tax already withheld before a new partial-year plan begins.
This explanation documents the planning model. It is educational, not individualized tax, legal, Medicare, or investment advice.
Where it appears
Where to use it
See this concept in context, with a guide to each page and its controls.
The words behind it
Related financial terms
Plain-English definitions, with 2026 figures and worked examples, from the financial terms glossary.