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Merge pull request #53079 from Expensify/OfstadC-patch-1
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[No QA] Update Apply-Tax FAQ.md
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deetergp authored Nov 26, 2024
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Expand Up @@ -28,6 +28,21 @@ To handle these, you can create a single tax that combines both taxes into a sin

From the Reports page, you can select Reports and then click **Export To > Tax Report** to generate a CSV containing all the expense information, including the split-out taxes.

## Why is the tax amount different than I expect?

In Expensify, tax is *inclusive*, meaning it's already part of the total amount shown.

To determine the inclusive tax from a total price that already includes tax, you can use the following formula:

### **Tax amount = (Total price x Tax rate) ÷ (1 + Tax Rate)**

For example, if an item costs $100 and the tax rate is 20%:
Tax amount = (**$100** x .20) ÷ (1 + .**20**) = **$16.67**
This means the tax amount $16.67 is included in the total.

If you are simply trying to calculate the price before tax, you can use the formula:

### **Price before tax = (Total price) ÷ (1 + Tax rate)**

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