OSD stands for Optional Standard Deduction. Instead of tracking all your expenses to get your net expense, with OSD, you can simply declare that 40% of your income is your expense. That means 60% of your income is taxable.
An added advantage of using OSD is that you don't need to file any audited financial statements. Here's a more in-depth article from Tax & Accounting Center detailing when an audited financial statement is needed.