Is the tax base on your net profit/loss and consequently that liability reduced by your expenses? Or are you taxed on the final number (net profit/loss minus expenses)?
Example: Net profit $5000, expenses $1000. Am I tax on $4000 or on $5000, then given an allowance base on the $1000 expenses?

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It all go on Schedule C of your personal tax return. The gross income smaller number cost of goods sold is gross profit, next subtract expenses and arrive at net profit. This is what you are tax on.

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Answers:    Net profit is after expenses. Gross is your total sales consequently after deducting cost you catch to net profit i.e. taxable. So if you sell 10,000 of merchandise that cost you 5,000 you own a gross profit of 5,000 less your expenses close to labor, rent, depreciation of equipment and vehicles. The web profit is taxable for self employment tax on form SE if over $400. SE excise is twice what SS and Medicare are so 15.3%. You pay that and the income levy as estimated taxes unless you have a profession where you can hold extra withheld.

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