I’m a bit confused about how much to save for taxes. I’ve heard 30%, so I’ve been setting aside 30% of all revenue for now. However, I’m unsure if it should be 30% of revenue, profits, or income.
My plan is to reinvest everything I make back into the business, which means I technically wouldn’t be making any profit or income.
Based on what I’ve found online, my current understanding is:
Revenue: The total amount of money a business receives from its sales and services.
Profit: The money left after accounting for the cost of goods sold.
Income: The money a company makes after deducting the cost of running the business.
I just need some clarity on this so I can reinvest as much as possible while ensuring I can cover any taxes owed.