The total amount of tax that an entity is legally obligated to pay to an authority as the result of the occurrence of a taxable event. Tax liability can be calculated by applying the appropriate tax rate to the taxable event's tax base. Taxable events include, but are not limited to, annual income, the sale of an asset, a fiscal year-end or an inheritance.
Investopedia Says:
A tax liability is a legal claim on assets. Should an entity default on paying its taxes, the governing authority may foreclose on the delinquent account, or take out a lien or encumbrance on an asset.
Related Links:
Paying your bills early or giving an extra donation now can help you come tax time. Cut Your Tax Bill
Here's another reason to put money toward your retirement nest egg. Saver's Tax Credit: A Retirement Savings Incentive
If you have property to sell and want to avoid capital gains tax, a Section 1031 exchange may be the answer. Avoid Capital Gains Tax On Your Home Sale
We give you seven guidelines to help you keep more of your money in your pocket. Tax Tips For The Individual Investor
We provide an explanation of individual cost basis and the advantages it brings to these accounts. Separately Managed Accounts: A Boon For All
Copyright ©2010, Investopedia.com - Owned and Operated by Investopedia US, A Division of ValueClick, Inc. All rights reserved.
