Tax Liability


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Tax liability

The amount in taxes a taxpayer to the government.

Tax Liability

The money one owes to the government in a given year. At its most basic, a tax liability is usually a certain percentage of one's income, and varies according to income. That is, one who makes $100,000 per year usually has a higher tax liability than one who makes $25,000. Different taxable events command different tax liabilities. For example, income taxes are usually higher than capital gains taxes. Certain taxable events do not occur for everyone in every year; for example, inheritance taxes only apply when someone dies. See also: Tax bracket.

Tax Liability

The amount of total tax due the IRS after any credits and before taking into account any advance payments (withholding, estimated payments, etc.) made by the taxpayer.
References in periodicals archive ?
Stanbic IBTC Bank Plc reported a tax liability of N13.712bn, followed by Zenith Bank Plc, which is to pay N4.052bn minimum tax.
2011-67, the individual taxpayer's request for an OIC was denied when the examiner included dissipated assets in the RCP calculation, resulting in an RCP sufficient to satisfy the outstanding tax liability within the statutory collection period.
Thus, if there are no other sources of taxable income to support the realization of deferred tax assets, a valuation allowance would need to be recorded against the deferred tax assets, and a net deferred tax liability or naked credit is presented on the company's balance sheet.
The BMW 320d ES has a 0-60mph time of 9.3 seconds, a top speed of 131mph, economy of 50mpg, a CO2 figure of 153g/km and a tax liability of 16%.
In Situation 3, Trust's governing instrument states that if G is treated as the owner of any portion of Trust for any tax year, the trustee may, in the trustee's discretion, distribute to G for the tax year income or principal sufficient to satisfy G's personal income tax liability attributable to including all, or part, of Trust's income in G's taxable income.
Instead, the taxpayer may exchange the property for another of like or greater value, thereby deferring the tax liability. The taxpayer may even borrow additional funds to exchange for a property of greater value, increasing their tax basis for another round of depreciation.
AQuoted shares no longer qualify for gift relief and it is likely that you will incur a capital gains tax liability if you transfer all the shares to your daughter in one tranche.
If you are contemplating making a large purchase near year-end in a taxable, nonretirement account and the distribution is significant, you should probably put off the purchase by buying after the record date to avoid incurring an immediate tax liability. In a qualified tax-deferred retirement account, you can make the purchase at any time because you pay no taxes on distributions.
A direct reduction of tax liability increases a corporation's earnings per share and positively affects stock value.
However, in the IRS's view, a tax liability arises at the end of the taxpayer's tax year and becomes due and owing at that time.
One court allowed a reduction in the fair market value of stock in a closely held corporation because a buyer would consider the corporation's built-in tax liability of its appreciated assets before making an offer.