Is my WACC taxed?

By Roni Lynn Deutch • Dec 7, 2010

Opinions expressed by Entrepreneur contributors are their own.

I'm very confused by this situation.

Taxes only apply to the debt portion of your Weighted Average Cost of Capital equation. Businesses are allowed to deduct interest paid on debts on their federal taxes, so this must be accounted for in your WACC equation.

Now, how much you get to deduct will depend on your business's tax rate and your specific calculations.

There are online resources that might be informative, but I would seriously recommend working with a financial advisor or qualified accounting professional.

Please remember that it is impossible to give comprehensive tax advice over the internet, no matter how well researched or thoughtfully written. Before relying on any information given, you should always consult a qualified tax professional to discuss your specific situation.

Roni Lynn Deutch

Roni Deutch is known as "The Tax Lady" for a reason: She has two decades of practical experience resolving IRS tax problems and preparing taxes for taxpayers nationwide. Consequently, she has become a well-known media personality and one of the few go-to tax experts in the country. She is the founder and owner of the nation's largest tax resolution law firm, Roni Deutch, A Professional Tax Corp.

Editor's Pick

The Dark Side of Pay Transparency — And What to Do If You Find Out You're Being Underpaid

Thinking of a Career Change? Here Are 4 Steps You Can Take to Get There.

A Founder Who Bootstrapped Her Jewelry Business With Just $1,000 Now Sees 7-Figure Revenue Because She Knew Something About Her Customers Nobody Else Did

Use These Words and Gestures to Impress Your Boss

Everything You Need to Know About Franchise Law

The Top 2% Swear By This Negotiation Tactic Most People Overlook

Most Popular

See all

Business News

Amazon Is Starting to Let Customers Know What Products Are Returned Often

The e-commerce giant has begun flagging certain items that were frequently sent back.

By Gabrielle Bienasz

Growing a Business

This Co-Founder Was Kicked Out of Retailers for Pitching a 'Taboo' Beauty Product. Now, Her Multi-Million-Dollar Company Sells It for More Than $20 an Ounce.

Childhood friends and Harvard grads Laura Schubert and Lillian Tung launched Fur to address the problem no one was talking about.

By Amanda Breen

Marketing

Turn April Fool's Day Into a Marketing Success With These Innovative Strategies

April Fools' Day provides an exceptional chance for brands to connect with audiences in a fun and memorable way. Employ these marketing tactics to interact with your customers and enhance brand recognition.

By Jessica Wong