What’s the difference between “income” and profit”?

Question

And, more specifically, why are corporations and people taxed differently? Both have money coming in and going out for necessities

Does that make sense?

In: 0

Answer 1

“Income” is just that– money coming in. Profit is just a portion of income that is whatever you have left over after necessary expenses.

But those two words are usually not used together. Income is generally used in personal finance, whereas profit is used when talking about business. A better term to use in the latter area is “revenue” for total amount of money that a business receives in a given period. Minus operating costs, the rest is profits.