Business income is an income realized as a result of business activity. Business income is a type of income earned and is classified as ordinary income for tax purposes.
Business income may include income received from the sale of products or services. For example, fees received by a person from the regular practice of a profession, Rents received by a person in the real estate business are business income Business income is taxed differently for different business forms like sole proprietorships, partnerships, and companies.
Business expenses are expenses which are incurred in the ordinary course of business. Business expenses are deductible and are always netted against business income.
Some of the deductible expenses:
- Rent, Taxes, Repairs of Building
- Insurance of Builiding
- Depreciation on Building, Plant & Machinery, Furniture.
- Repairs & Insurance of Plant & Machinery
- Salary & Wages paid to employees
- Advertising, promotional and printing expenses