Tax Shield Calculator
This small business tool is used to find the tax rate by using interest expenses and depreciation expenses.
How to calculate the tax shield
A Tax Shield is an allowable deduction from taxable income that results in a reduction of taxes owed.Tax shield can be claimed for a charitable contribution, medical expenditure etc. for individuals .Tax rate is primarily used for interest expense and depreciation expense in the case of a company.
Tax Shield Formula
Tax Shield = Sum of Tax-Deductible Expenses × Tax rate
Google company has an annual depreciation of $10,000 and the rate of tax is set at 20%, the tax savings for the period is $2000.