Taxes

Add income tax, franchise tax, and other tax expenses to your forecast.

The Taxes building block tracks tax expenses such as federal and state income tax, franchise taxes, and other business taxes. Tax entries appear on your Income Statement.

Video Tutorial

Taxes Tutorial

Taxes Overview

The Taxes page shows all your tax expense entries — the tax name, amount, and when payments occur. Add line items for federal income tax, state taxes, franchise fees — whatever applies to your business.

Each Tax line appears in the Summary table. This table is fully editable, and updates you make here will be reflected directly on your Income Statement.

Creating a Tax Expense

To add a tax expense:

  1. Navigate to Building Blocks → Taxes in the sidebar
  2. Click Add Tax
  3. Enter the tax name and description
  4. Click “Add Tax Expense”
  5. Edit values in the Summary table as needed
Tax Name: State Income Tax
Description: California state income tax
Do You Need to Model Corporate Taxes?
Corporate income taxes only apply when your business is profitable. Most startups operate at a loss in their early years, which means no corporate tax liability. Only add corporate tax expenses to periods where you’re forecasting a profit — there’s no need to model tax payments for months or years where you expect a loss.

Examples of Business Taxes

Income Taxes

Taxes on business profits:

  • Federal corporate tax - 21% (C-corps)
  • State income tax - Varies by state (0-12%)
  • Pass-through taxes - S-corps, LLCs (personal rates)

Payroll Taxes

Employer-paid taxes on wages:

Tax Rate Wage Base
Social Security 6.2% $168,600 (2024)
Medicare 1.45% Unlimited
FUTA 0.6% $7,000
State unemployment Varies Varies

Other Taxes

  • Sales tax - On products sold
  • Property tax - On real estate and equipment
  • Franchise tax - For operating in certain states (CA, DE, TX)

Impact on Financial Statements

Income Statement

Taxes appear in your EBITDA table. They’re subtracted from your Earnings to calculate your Profit (Loss), also known as your Net Income.