Definition

Noun: The legal financial obligation an individual or entity owes to a government authority as a result of taxable income, transactions, or property. It is the total amount of tax that must be paid.

Usage

This term is used in legal, financial, and accounting contexts to refer to the calculated debt owed to tax authorities. It is a formal term for the sum of money one is legally required to pay in taxes. - An individual's tax liability is determined after filing their annual tax return. - The company's accountants worked to minimize its tax liability for the fiscal year. - You must report all income to calculate your correct tax liability.

Advanced Usage

• Accrued tax liability: A tax obligation that has been incurred but not yet paid.
  • The balance sheet shows an accrued tax liability for the quarter.
• Deferred tax liability: A tax obligation that is due in a future accounting period.
  • The asset purchase created a significant deferred tax liability.

Variants and Related Words

• Taxable: (Adjective) Subject to being taxed.
  • Taxable income is used to calculate your liability.
• Liability: (Noun) A legal or financial debt or obligation.
  • In law, liability refers to being responsible for something.

Synonyms

• Tax debt
• Tax due
• Tax obligation

Related Phrases

• To incur a tax liability: To become responsible for paying a tax.
  • Selling the investment property caused him to incur a large tax liability.
• To settle a tax liability: To pay the owed tax in full.
  • She used her savings to settle her outstanding tax liability.

Noun

1. the amount of tax owed; calculated by applying the tax rate to the tax base