Tax Liability Definition
Your tax liability is the amount of money owed to a federal, state, or local tax agency for a taxable event.
Tax Liability Expanded Definition
When a taxable event occurs, money needs to be paid to one or more associated tax agencies. The money due is referred to as a tax liability.
The amount of the tax liability varies based on the type of transaction that has taken place. A taxable event can include the sale of a product and earned income. It is a legal obligation to pay tax liabilities to the appropriate agencies.
What Is Your Small Business Tax Liability?
Last Updated By
Jenna Hutkowski | Apr 18, 2023