USA Expenses and Taxes Spreadsheet Double Check Formulas

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Hello,

I am trying to put together a document for keeping track of payments and expenses for business. I have seen some other documents out there that can be downloaded but wanted to exercise this program and build my own. Please be nice as I am not very experienced with Excel. Nore am I super experienced with business taxes and how all of that works. I recently hired an accountant to help me with the difficult things but I like to develop my own understanding of these things as well.

I am mostly satisfied with the attached document. However, I am not 100% sure it is functioning properly.

In the example file I have three payments of $1000 each for a total of $3000. Then I add a single expense of $1000 on the right-hand side. I have a formula set up for calculating estimated taxes =30%*D13. My expectation would be that this $1000 expense would eliminate the "taxes owed" amount completely. However, I am still left with $600 in that cell. I am wondering if there is something I am not considering here. Or perhaps my formulas are not correct.

See the examples below (can we not attach Excel spreadsheets here? I can provide that too if that is possible. Thank you very much in advance for any assistance!

Sincerely,

Example spreadsheet with $3000 in payments:
TAX-SPREADSHEET_01.png


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Example spreadsheet with $3000 in payments with one $1000 expense added:
TAX-SPREADSHEET_02.png
 

DrStrangeLove

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It looks like it's OK so far. With a 30% tax rate and calculating income on a cash basis, you should have $600.00 in tax owed on $2,000.00 pre-tax operating profit (revenues less expenses). Your formula for Estimated Taxes Owed is 30% of cell D13, and cell D13 should be Total Payments Received (cell B10) minus Total Expenses (cell F10). Looks all right to me.

One suggestion: I'd put the 30% in a cell of its own, name it something like Tax_Rate, and use the name in formulas rather than hard-coding it in formulas. It'll be easier to change that way, especially if you have a bunch of formulas that refer to the tax rate.
 
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Hello!

Okay thank you so much for taking a look at this! I really appreciate it! Glad to hear I am on the right track. I'll make that change and separate the 30% in its own cell. I also think I have a better understanding of the revenues less expenses now too. Just because I have $1000 expense it doesn't mean I pay no taxes. I still pay taxes on the $2000 after expenses. That's where I was getting hung up, I think. Thank you so much!
 

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