| Scenario | Revenue | COGS | Expenses | Taxes | Take-Home |
|---|---|---|---|---|---|
| Example A | $120,000.00 | $22,000.00 | $54,000.00 | $25,000.00 | $19,000.00 |
| Example B | $80,000.00 | $12,000.00 | $36,000.00 | $16,000.00 | $16,000.00 |
| Example C | $150,000.00 | $30,000.00 | $62,000.00 | $33,000.00 | $25,000.00 |
- Revenue Net = Revenue - Sales Tax (optional)
- Total Income = Revenue Net + Other Income
- Payment Fees = Revenue Net × Fee%
- Gross Profit = Total Income - COGS
- Net Before Deductions = Gross Profit - Expenses - Loan Interest
- Mileage Deduction = Miles × Mileage Rate
- Business Deductions include Depreciation
- Adjusted Net = max(0, Net Before Deductions - Deductions - Owner Adjustments)
- SE Base = Adjusted Net × SE Factor (if enabled)
- SE Tax = SE Base × SE Rate
- Income Taxable = max(0, Adjusted Net - ½SE Tax - QBI - Standard Deduction)
- Income Tax = Income Taxable × (Federal + State Rate)
- Total Tax = SE Tax + Income Tax
- Take-Home = max(0, Adjusted Net - Total Tax - Reserve)
- Cash After Draws = Take-Home - Principal - Draws
- Select a period and currency, then enter revenue and other income.
- Choose COGS and expense modes, then fill costs and fees.
- Add deductions, depreciation, and loan details if applicable.
- Set tax rates and planning buffers, then calculate.
- Export results to CSV or PDF for budgeting.
Revenue quality and income mix
Stable sole proprietor planning starts with reliable revenue inputs. Split income into core revenue and other income to reflect refunds, affiliate payouts, interest, and reimbursements. Track sales tax or VAT separately because it is typically collected on behalf of authorities and should not inflate operating performance. Many service businesses show lower COGS but higher variable expenses; product businesses often show the reverse. This calculator lets you model both patterns using either percent-based or amount-based modes to match your bookkeeping style.
Cost structure and contribution margin
Break-even is driven by contribution margin: revenue remaining after variable costs. Here, variable costs include COGS, variable operating expenses, payment processing fees, and any additional operating costs you enter. Fixed expenses remain stable regardless of sales volume. When contribution margin approaches zero, break-even becomes impractical and signals pricing or cost issues. Use the break-even output to sanity-check whether current pricing supports sustainable fixed overhead and predictable cash needs.
Deductions, depreciation, and planning adjustments
Business deductions can materially change taxable income. This calculator includes home office, mileage deduction (miles multiplied by your mileage rate), and an additional deductions field. Depreciation is treated as a non-cash deduction for planning, which can reduce taxable income without immediately reducing cash. Owner adjustments like retirement contributions and health insurance are included as planning items because they commonly affect taxable income and personal cash priorities. Always align inputs with your records and local rules.
Tax estimation and quarterly payments
The tax section is intentionally configurable. You can enable or disable self-employment tax, adjust the SE factor, and apply a combined income tax rate based on your best estimate. QBI can be toggled and modeled as a percentage of adjusted net income for planning. Quarterly payment suggestions are derived from annual tax estimates divided by four, with an optional buffer to reduce underpayment risk. Use exports to keep a quarterly trail for budgeting reviews.
Cashflow realism and owner decisions
Profit and cash are not the same. Loan interest is treated as an expense, while loan principal payments are handled as cash-only outflows. Owner draws are also cash-only and can reduce remaining cash even when profit is healthy. The calculator highlights cash remaining after principal and draws to support practical decisions about spending, reinvestment, and reserves. If your monthly view shows tight cash after draws, consider adjusting pricing, costs, or draw timing to protect working capital.
FAQs
1) Is this calculator accurate for my country?
It is a configurable estimator. Enter your local tax rates, rules, and deduction assumptions. Use it for planning, then confirm figures with your accountant or official guidance.
2) Why does it separate sales tax or VAT?
Sales tax or VAT is usually collected for authorities, not earned income. Separating it prevents overstating revenue and keeps profit and margin calculations more realistic.
3) What is the difference between loan interest and principal?
Interest is an expense that can affect profit and taxable income. Principal payments reduce cash but typically do not reduce taxable income. The calculator shows both impacts.
4) What does “Adjusted Net” mean here?
It is a planning proxy for net earnings after costs, deductions, and owner adjustments. It is not a substitute for tax forms, but it helps you compare scenarios consistently.
5) How should I use the quarterly payment suggestion?
Treat it as a budgeting target based on your inputs. Add the optional buffer to reduce surprises. Recalculate after major revenue or expense changes during the year.
6) Why can monthly inputs be multiplied by 12?
Monthly mode lets you enter typical monthly values and scales them to an annual estimate for tax planning. Quarterly tax outputs still use the annual estimate.