Glossary · Reading the business
In short
This is the portion of a business's or individual's income subject to taxation after all allowable deductions. It's a key figure on tax returns, showing what the IRS considers real earnings.
When reviewing a target business, you'll look at its taxable income on business tax returns. While not directly used for valuation (SDE/EBITDA are), it provides a baseline for understanding the business's reported profitability to the IRS. Be aware that tax strategies often minimize taxable income, so it usually understates the true owner earnings.
Defined by DealRoom.so SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
Pressure-test the numbers before you make an offer
Send us the asking price and the seller's cash flow — we'll show whether the deal services SBA debt and where the add-backs are likely to hold up.
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