Calculating taxable income involves several steps: 1. Gross Income: This includes all revenue generated by the business, such as sales, services, and other income sources. 2. Deductions and Exemptions: Businesses can deduct certain expenses like operating costs, salaries, rent, and depreciation. These deductions reduce the gross income to arrive at the net income. 3. Adjustments: Additional adjustments can include tax credits, carryforwards of previous losses, and other specific tax provisions. 4. Taxable Income: The final amount after all deductions and adjustments is the taxable income, which is then subject to the applicable tax rate.