Business Income


DEFINITION of 'Business Income'

Any income that is realized as a result of business activity. Business income is a type of earned income, and is classified as ordinary income for tax purposes.

BREAKING DOWN 'Business Income'

Business income can be offset with business expenses and business losses. It can be either positive or negative in a given year.

  1. Passive Income

    Earnings an individual derives from a rental property, limited ...
  2. Earned Income

    Income derived from active participation in a trade or business, ...
  3. Ordinary Income

    Income received that is taxed at the highest rates, or ordinary ...
  4. Accountant

    A professional who performs accounting functions such as audits ...
  5. Adjusted Gross Income - AGI

    A measure of income calculated from your gross income and used ...
  6. Personal Finance

    All financial decisions and activities of an individual or household, ...
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  1. Can working capital be depreciated?

    Working capital as current assets cannot be depreciated the way long-term, fixed assets are. In accounting, depreciation ... Read Full Answer >>
  2. Do working capital funds expire?

    While working capital funds do not expire, the working capital figure does change over time. This is because it is calculated ... Read Full Answer >>
  3. Do you discount working capital in net present value (NPV)?

    Net present value (NPV) calculations should include the discounted value of changes in working capital. This treatment of ... Read Full Answer >>
  4. How is working capital different from fixed capital?

    There are several key differences between working capital and fixed capital. Most importantly, these two forms of capital ... Read Full Answer >>
  5. How much working capital does a small business need?

    The amount of working capital a small business needs to run smoothly depends largely on the type of business, its operating ... Read Full Answer >>
  6. What does high working capital say about a company's financial prospects?

    If a company has high working capital, it has more than enough liquid funds to meet its short-term obligations. Working capital, ... Read Full Answer >>

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