US Business Reinvestment Tax Impact Estimator
Enter the tax year for which you are estimating.
Your total business revenue before expenses.
Your estimated deductible expenses *before* considering new reinvestments.
Enter amounts for planned, deductible business reinvestments. These amounts will be added to your current expenses for estimation.
New assets that may be eligible for Section 179 or Bonus Depreciation.
Deductible contributions to qualified retirement plans.
Other deductible business costs you plan to incur.
Enter an estimated percentage representing your combined federal & state income and SE tax rate on additional income. **This significantly impacts savings.**
Reinvestment Impact Summary ()
| Item | Initial (Before Reinvestment) | Adjusted (After Reinvestment) |
|---|---|---|
| Estimated Gross Business Income | $0.00 | $0.00 |
| Estimated Total Business Expenses | $0.00 | $0.00 |
| Estimated Net Earnings (Taxable Business Profit) | $0.00 | $0.00 |
Total Planned Reinvestment: $0.00
Estimated Reduction in Net Earnings: $0.00
Assumed Combined Marginal Tax Rate: 0%
Estimated Tax Savings from Reinvestment: $0.00
Note: This tool provides a simplified estimate of the tax impact of deductible business reinvestment based on an assumed marginal tax rate. Actual tax savings depend on your specific tax situation, business structure, eligibility of expenses, and current tax laws. Retirement contribution limits and depreciation rules apply in actual tax filing. This is not tax advice. Consult a qualified tax professional.
For US businesses, strategically reinvesting profits can lead to significant growth and offer substantial tax advantages. While truly “tax-free” reinvestment is rare, many strategies allow you to defer or reduce current tax liability. Our free Tax-Free Business Reinvestment Planner helps you explore these options to optimize your financial strategy.
Reinvesting typically involves putting profits back into the business for growth, rather than distributing them as taxable income to owners (for pass-through entities). This can lead to:
Deductible Expenses: Many reinvestments, such as purchasing new equipment, increasing marketing, or investing in employee training, are considered ordinary and necessary business expenses. These are fully or partially deductible, reducing your net profit subject to tax.
Depreciation and Section 179: Investing in large assets like machinery or vehicles allows for depreciation deductions over time. Section 179 and bonus depreciation (often 100% in 2025) can allow you to deduct a significant portion, or even the full cost, of qualifying new or used equipment in the year of purchase.
Tax-Advantaged Retirement Plans: Businesses can contribute to retirement plans (e.g., 401(k)s, SEP IRAs, SIMPLE IRAs) for owners and employees. These contributions are generally tax-deductible for the business, and the funds grow tax-deferred until withdrawal.
Inventory Purchases: Investing in inventory is a cost of goods sold, which reduces your gross profit.
Our planner helps identify potential reinvestment areas that offer tax benefits, guiding you to make smart, tax-efficient decisions for your US business growth.