Business Income Tax

Business income tax is a tax imposed on the earnings of businesses, which can include corporations, partnerships, and sole proprietorships. The tax is calculated based on the business's net income, which is the total revenue minus allowable expenses such as cost of goods sold, salaries, rent, and other operational costs. Different business structures face varying tax rates and rules. Corporations are typically taxed separately from their owners, while income from sole proprietorships and partnerships is usually passed through to the owners and taxed at their individual rates. Compliance involves filing annual tax returns, paying estimated taxes quarterly, and adhering to tax regulations to avoid penalties and audits.