A company’s gross profit is its financial gain after deducting the costs of manufacturing and distributing its goods or services. These expenses are called the cost of goods sold. The amount of money actually earned is referred to as the company’s gross profit, which is the revenue of the business after deducting the costs incurred to return that revenue.
Gross Profit = Revenues – COGS
The general gross profit definition deducts only variable costs. These are any costs that raise or lower the level of output production. Insurance and rent are not included in gross profit because they are not directly related to output.
The tax laws are very complex. Our short blog articles cannot cover in full all the nuances of the rules. Your specific facts may hold various opportunities and possible risks that only trained, experienced, and highly qualified tax specialists can spot. We encourage you to find such help, rather than trying to figure it all out on your own. Consider giving this marketplace a try by posting your project and signing up here.
If you are a licensed tax professional and are interested in helping others either part or full-time, or ad hoc, come on in! Happy to have you. Our marketplace has the full suite of tools to communicate with clients including compliance calendars, task and message management, and billing. You can also quickly connect to knowledgeable colleagues who can complement your services with the ones you do not provide. Register here.