Frequently Asked Questions

TaxVant is built for DIY investors, retirement planners, and tax-conscious individuals who want to take control of their financial strategies.

Because the tax code is highly dependent on your specific household structure, income mix, and state of residence, generic rules of thumb and static advice often fail. TaxVant empowers you to visualize exactly how tax laws apply to your unique situation.

The most effective way to start is by aligning the tool with a tax return you’ve already filed to build a trusted baseline:

1. Build and validate your baseline: In a Household, create a baseline scenario using a recently filed tax return. Compare the final tax calculated by TaxVant to your actual filed return.If the numbers don't match, verify that you entered all details correctly. While TaxVant supports standard federal and state tax codes, it does not support every possible niche input field. If a specific input is important to your planning, let us know via the feedback menu!
2. Bring it to the current year: Once your baseline scenario matches your prior-year return, copy that scenario and update the numbers to match your current-year projections.
3. Explore strategy scenarios: Create additional copies to model different financial strategies (e.g., executing a Roth conversion, realizing capital gains, or adjusting pre-tax contributions).
4. Analyze ranges in Ranger: Go to a scenario's Ranger analysis to visualize exactly how your taxes, marginal rates, and cliffs change as a specific income or deduction varies over a range you define.

The US tax code is enormously complex, spanning federal regulations, credits, phase-outs, and unique tax laws across all 50 states. Rather than relying on simplified approximations or closed "black-box" rules, TaxVant is powered by a high-precision microsimulation core derived from the open-source PolicyEngine project.

Rigorous External Validation & Credibility:

• Benchmarked Against NBER TAXSIM: The underlying engine is continuously validated against the National Bureau of Economic Research (NBER) TAXSIM-35 model—the gold standard in academic economics—matching federal and state tax calculations to the penny across hundreds of thousands of household scenarios.
• Institutional Collaboration: PolicyEngine maintains formal partnerships and MOUs with the NBER (with TAXSIM creator Dr. Daniel Feenberg on its advisory board) and the Federal Reserve Bank of Atlanta (cross-validating against their Policy Rules Database).
• Trusted by Researchers & Governments: The engine is used by leading economic think tanks, legislative analysts, and government data teams (including the UK No. 10 Downing Street data science team) to model tax policy.
• 100% Open & Auditable: Every calculation formula is mapped directly to IRS statutes and state tax forms. Our extensions and engine modifications are fully public in our GitHub repository.

Disclaimer: TaxVant is an informational and planning tool. All projections are illustrative estimates based on user inputs and should be verified with a qualified tax professional prior to executing financial decisions.

Future tax years are modeled using PolicyEngine, an open-source tax simulation engine that implements statutory inflation-adjustment formulas prescribed by federal and state tax codes:

• Federal Taxes (IRS): Under 26 U.S.C. § 1(f), federal tax brackets, standard deductions, and phase-out thresholds are indexed to the Chained Consumer Price Index (C-CPI-U). PolicyEngine projects future values using official Congressional Budget Office (CBO) economic forecasts and statutory rounding rules (e.g., rounding down to the nearest $25 or $50 increment).
• State Taxes: For states that adjust for inflation by law (such as California, Oregon, and Minnesota), PolicyEngine applies the relevant state-mandated CPI metrics and formulas. For states conforming to federal standard deductions or AGI definitions, federal projections flow through automatically, while states with fixed statutory brackets remain unadjusted until updated by state legislation.

Once the IRS and state departments of revenue release their official annual revenue procedures and tax tables, projected values are automatically updated to match the final published figures.

Your marginal tax rate is the exact percentage of tax paid on your last dollar of income—or saved by your last dollar of deduction. Because tax credit phase-outs, deductions, and state tax rules interact dynamically, your true marginal tax rate is often significantly higher or lower than your headline federal tax bracket.

Unlike static tax calculators that only calculate marginal rates on generic wage income, TaxVant allows you to perform marginal tax analysis for any income or deduction component of your tax return—including W-2 wages, business income, traditional 401(k) or IRA contributions, Roth conversions, long-term capital gains, HSA contributions, or itemized deductions. Using our Ranger analysis tool, you can sweep any component across a range to see its exact impact on your total tax liability.

When exploring marginal tax curves in Ranger, users often encounter counterintuitive patterns—such as a negative marginal tax rate of a tax component, a sudden drop in tax rate as income rises, or a steep 50%+ spike. It is very common to assume these are calculation bugs, but in reality, they reflect real-world quirks of the tax code:

• Negative Federal Marginal Rates: During the phase-in range of refundable credits (like the Earned Income Tax Credit), every additional dollar earned adds more credit than the tax owed.
• Steep Spikes & Cliffs: Thresholds where multiple phase-outs overlap (e.g., Child Tax Credit phase-out, ACA subsidy cliffs, Medicare IRMAA surcharges, or the Social Security "tax torpedo") can cause effective marginal rates to surge far above your standard bracket.

Because these interactions are nearly impossible to trace manually across hundreds of tax rules, we created the "Explain This" button.

Clicking "Explain This" in your Ranger chart uses AI to analyze the marginal tax behavior, providing a clear, plain-English breakdown of the statutory rules and credit adjustments driving that chart.

You can use the Share feature in the workspace to generate a secure, read-only link. You have the option to share either your entire Household comparison or a specific Ranger analysis.

Anyone with the link can view your scenario comparisons and interactive charts, but they cannot edit them. This allows you to safely send your figures to others while continuing to make changes to your active copy without affecting the shared view.

We take data security extremely seriously and have designed TaxVant with a privacy-first mindset. We do not link to your real-world bank or financial accounts, meaning your credentials never touch our systems. All data is encrypted in transit and at rest, and we utilize passwordless authentication via Google and Apple OAuth.

For full details about our hosting, encryption, and access controls, please review our Security Page.