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Hi,
I would include income tax as an outgoing in a cash or cashflow budget, as it has to be paid. The money comes out of your bank, or the bank that you are budgetting for, so it needs to be allowed for in order for you to get close to the real situation that is likely to occur. The ultimate purpose of the budget is to predict your peak overdraft, or funding needs.
Personally I would calculate tax as a percentage of taxable income. Being a tax accountant I can do this. However, if you aren't tax minded I would try calculating a percentage based on the past couple of years gross revenue, assuming that things are constant.
One of the weaknesses of budgetting is the assumptions that you have to use. But don't let that put you off the exercise. Just remember that we live in an imperfect world and you are to some extent modelling imperfection. But you can still get close if you develop the skill, and continual practice will develop your skill. :)
What else can I help you with?
What is capital budget and operating budget?
operating budget pays for day-to-day expenses, like salaries of a state employee and capital budget pays for major capital, or investment, spending, like building a bridge the money comes from there.
What the difference between operating budget and capital budget?
operating budget pays for day-to-day expenses, like salaries of a state employee and capital budget pays for major capital, or investment, spending, like building a bridge the money comes from there.
What is the Operating Budget Authority Document or OBAD?
It authorizes your base to pay for expenses for certain type of funds
What is the operating budget?
An operating budget is a financial plan that outlines the expected income and expenses of an organization over a specific period, typically a fiscal year. It serves as a tool for managing day-to-day operations, guiding resource allocation, and ensuring that the organization can achieve its financial goals. The budget includes projections for revenues, costs of goods sold, operating expenses, and other relevant financial metrics. Properly managing an operating budget helps organizations maintain financial stability and make informed decisions.
Can you describe the two principle sub budgets that compose a Master Budget?
The two principal sub-budgets that compose a Master Budget are the Operating Budget and the Financial Budget. The Operating Budget outlines the expected revenues and expenses related to the day-to-day operations of a business, including sales forecasts, production costs, and operating expenses. In contrast, the Financial Budget focuses on the company's financial goals and includes cash flow projections, capital expenditures, and budgeted financial statements, ensuring that the organization maintains sufficient liquidity and resources for growth and investment. Together, these budgets provide a comprehensive financial plan for the organization.
Which one is not the operating budget?
The operating budget typically includes revenues and expenses related to day-to-day operations, such as salaries, utilities, and supplies. A capital budget, on the other hand, focuses on long-term investments in assets like buildings or equipment and is not considered part of the operating budget. Therefore, the capital budget is the one that is not included in the operating budget.
What are the essential budget categories that should be included in a personal finance plan?
The essential budget categories to include in a personal finance plan are: income, expenses (such as housing, transportation, food, utilities, and debt payments), savings, and discretionary spending.
What three budgets are included in a financial plan?
The capital budget, the cash budget, and the operating(master) budget.
What is included in a personal budget?
A personal budget includes all of your expenses as well as your income. When you create a budget it will help you control your finances.
What does the operating budget document do?
authorizes your base to pay for expenses for a certain type of funds
What is capital budget and operating budget?
operating budget pays for day-to-day expenses, like salaries of a state employee and capital budget pays for major capital, or investment, spending, like building a bridge the money comes from there.
What is the The Operating Budget Authority Document?
It authorizes your base to pay for expenses for certain type of funds
What is the difference between an operating budget and a capital budget?
operating budget pays for day-to-day expenses, like salaries of a state employee and capital budget pays for major capital, or investment, spending, like building a bridge the money comes from there.
What the difference between operating budget and capital budget?
operating budget pays for day-to-day expenses, like salaries of a state employee and capital budget pays for major capital, or investment, spending, like building a bridge the money comes from there.
What is a major difference between an operating budget and a capital budget?
operating budget pays for day-to-day expenses, like salaries of a state employee and capital budget pays for major capital, or investment, spending, like building a bridge the money comes from there.
What are the external factors that may affect the budget?
Expenses, taxes, bills and payments and some other debts may affect the budget of either an individual or a family.
What is the Operating Budget Authority Document or OBAD?
It authorizes your base to pay for expenses for certain type of funds
