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 by itself if the amount of money or other things of value that you bring in.

Profit is your total income minus your expenses. So if you bring in $100 but you spent $50 on manufacturing costs and wages then your profit was $50.

By taxed differently people can also claim expenses on their income that will lower their taxable income and so they get taxed less. Of course depending on the tax laws where the person lives, works, is a resident of, is a citizen of, etc.