Basic tax question

[s2kinteg916]

Lets say you make 10,000 in revenue and you spent 5k in expenses than your taxed 3k for the year. For example ets say your tax bracket is 30%.

How does this tie in with each other and what is considered taxable income ? Can someone help me get a rough idea of how this works ?

My understanding is 10k(income) - 5k(expenses) = 5k (taxable income)

So i assume 5k gets taxed at a rate of 30%.

[Chris]

Yes. But there are more deductions than just business expenses.

[s2kinteg916]

What are examples of some of the other deductions ?

[Chris]

there are standard deductions for everyone. healthcare, interest on a mortgage, schooling. property tax credits. charitable giving. etc.

Its really worthwhile to see an accountant.

[Shawn]

You need an accountant. I don't know anything about taxes -- I don't want to.

That's why I have an accountant.

[etech-martin]

Total revenue - Cost = Gross Profit
Gross Profit - Operating Expenses = Operating Income
Operating Income - Other Expenses = Earnings before Interest and Taxes(EBIT)
EBIT - Interests = Earnings Before Taxes(EBT)
EBT - Taxes = Equity Earnigns or Loss (Net Income)

You should visit this site. You will get better idea about income calculation. :)
http://beginnersinvest.about.com/cs/investinglessons/l/blincomestate.htm

[Steelsun]

Tax law and deductions is very speciallized and will vary for everyone.

Some states also tax income, some don't.

Check with a local accountant for advice.