--- title: "Help Your Clients Avoid the \"Tax Torpedo\"" description: Avoid the tax torpedo - know to what extent your client has controllable income can allow you to offer a tax planning opportunity. image: https://www.covisum.com/hubfs/tc-screens-blog.jpg --- [Login](https://www.covisum.com/login-experience) | [Call: 402-235-4500](tel:1-402-235-4500) | [Contact Us](https://www.covisum.com/contact) ** [![covisum-logo](https://www.covisum.com/hs-fs/hubfs/covisum-logo.png?width=264&height=41&name=covisum-logo.png "covisum-logo")](https://www.covisum.com/) [![Start Your Free Trial](https://no-cache.hubspot.com/cta/default/2755909/b23743cd-d0df-4907-a66d-293b58ab1164.png)](https://cta-redirect.hubspot.com/cta/redirect/2755909/b23743cd-d0df-4907-a66d-293b58ab1164) [![Contact Us](https://no-cache.hubspot.com/cta/default/2755909/6c6d7fe7-e094-4fc0-9c82-d93d4ccbb532.png)](https://cta-redirect.hubspot.com/cta/redirect/2755909/6c6d7fe7-e094-4fc0-9c82-d93d4ccbb532) # Help Your Clients Avoid the "Tax Torpedo" [TAX  |  ](https://www.covisum.com/blog/topic/tax)11/20/17 9:07 AM  |  by [Katie Godbout, Vice President of Sales & Marketing](https://www.covisum.com/blog/author/katie-godbout-vice-president-of-sales-marketing) ![Help Your Clients Avoid the "Tax Torpedo"](https://www.covisum.com/hs-fs/hubfs/7614_WEB_Covisum_landing-page-graphics_TC-middle-screens.png?width=815&height=282&name=7614_WEB_Covisum_landing-page-graphics_TC-middle-screens.png) [Social Security Timing® ](https://www.covisum.com/social-security-timing)subscribers have helped clients save for retirement and have given them coaching on when to start taking Social Security benefits. But do you understand the impact of other income on the taxability of Social Security benefits? Understanding how different sources of income interact is critical, according to Greg Geisler in the September, 2017 *Journal of Financial Services Professionals*. Because of how Social Security benefits are taxed relative to other income, it can have major impacts on your client’s effective marginal tax rate.  Avoiding the "Tax Torpedo" In his article, "Taxable Social Security Benefits and High Marginal Tax Rates," Geisler refers to instances where the effective marginal tax rate exceeds your client’s statutory tax rate as the Social Security “tax torpedo” because it can make a major impact on how much a client may have to pay in taxes. Knowing to what extent your client has controllable income can allow you to offer a tax planning opportunity. The type and sequence of withdrawals can help your client avoid the “tax torpedo.” The ability to determine the client’s marginal tax rate and engage in planning can be done in a handful of ways. Geisler specifically cites [Tax Clarity](https://www.covisum.com/tax-clarity)® software from Covisum as a way to demonstrate the different effective marginal tax rates a client moves through as a composition of their total amounts for federal income tax and income. Many tax preparers will miss these relevant marginal tax rate impacts since most don’t use software that breaks out income and tax into the effective marginal tax rate brackets. They most likely would not notice anyway, because the overall tax rate does not look high relative to the income. But it would look outrageously high as the income moved through the marginal tax brackets if they could see it broken out.  As a financial professional, you have an opportunity to show your clients how to plan for tax-efficient withdrawals during every year of retirement. Using Tax Clarity software can help you offer this service and help your clients avoid the “tax torpedo.” [![New call-to-action](https://no-cache.hubspot.com/cta/default/2755909/1701ae61-4125-4a21-9866-3e102fb4ca26.png)](https://cta-redirect.hubspot.com/cta/redirect/2755909/1701ae61-4125-4a21-9866-3e102fb4ca26) ### Share this article [![Share on Facebook](https://static.hubspot.com/final/img/common/icons/social/facebook-24x24.png)](http://www.facebook.com/share.php?u=https%3A%2F%2Fwww.covisum.com%2Fblog%2Fhelp-your-clients-avoid-the-tax-torpedo%3Futm_medium%3Dsocial%26utm_source%3Dfacebook) [![Share on LinkedIn](https://static.hubspot.com/final/img/common/icons/social/linkedin-24x24.png)](http://www.linkedin.com/shareArticle?mini=true&url=https%3A%2F%2Fwww.covisum.com%2Fblog%2Fhelp-your-clients-avoid-the-tax-torpedo%3Futm_medium%3Dsocial%26utm_source%3Dlinkedin) [![Share on Twitter](https://static.hubspot.com/final/img/common/icons/social/twitter-24x24.png)](https://twitter.com/intent/tweet?original_referer=https%3A%2F%2Fwww.covisum.com%2Fblog%2Fhelp-your-clients-avoid-the-tax-torpedo%3Futm_medium%3Dsocial%26utm_source%3Dtwitter&url=https%3A%2F%2Fwww.covisum.com%2Fblog%2Fhelp-your-clients-avoid-the-tax-torpedo%3Futm_medium%3Dsocial%26utm_source%3Dtwitter&source=tweetbutton&text=Help%20Your%20Clients%20Avoid%20the%20%22Tax%20Torpedo%22) [![Share on Pinterest](https://static.hubspot.com/final/img/common/icons/social/pinterest-24x24.png)](http://pinterest.com/pin/create/button/?url=https%3A%2F%2Fwww.covisum.com%2Fblog%2Fhelp-your-clients-avoid-the-tax-torpedo%3Futm_medium%3Dsocial%26utm_source%3Dpinterest&media=http%3A%2F%2Fcdn1.hubspot.com%2Fhub%2F158015%2F305390_10100548508246879_837195_59275782_6882128_n.jpg) [![Share on Email](https://static.hubspot.com/final/img/common/icons/social/email-24x24.png)](mailto:?subject=Check%20out%20https%3A%2F%2Fwww.covisum.com%2Fblog%2Fhelp-your-clients-avoid-the-tax-torpedo%3Futm_medium%3Dsocial%26utm_source%3Demail%20&body=Check%20out%20https%3A%2F%2Fwww.covisum.com%2Fblog%2Fhelp-your-clients-avoid-the-tax-torpedo%3Futm_medium%3Dsocial%26utm_source%3Demail) ## Related Blog Articles [ ### In The News Charting the retirement course on Covisum's Tax Map Read ](https://www.covisum.com/blog/charting-the-retirement-course-on-covisums-tax-map) [ ### Tax 5 Reasons You Should Try Tax Clarity Right Now Read ](https://www.covisum.com/blog/5-reasons-you-should-try-tax-clarity-right-now) [ ### Tax Essential Definition: The Tax Torpedo and 4 Ways to Avoid It Read ](https://www.covisum.com/blog/essential-definition-tax-torpedo) [See All Articles](https://www.covisum.com/blog) ## Covisum’s ecosystem of solutions can help you grow. 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