Business Taxes

Business income is a term commonly used in tax reporting. According to the Internal Revenue Service (IRS), business income “may include income received from the sale of products or services,” such as “fees received by a person from the regular practice of a profession...[and] rents received by a person in the real estate business.

Business expenses and business losses can offset business income, which can be either positive or negative in any given year. The profit motive behind business income is universal to most business entities. However, the way in which business income is taxed differs for each of the most common types of businesses: sole proprietorships, partnerships, and corporations.