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Simple English definitions for legal terms
tax liability
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A quick definition of tax liability:
Term: Tax liability
Definition: Tax liability is the amount of money that a person or business has to pay to the government for taxes. It's like a bill that you have to pay for the services that the government provides, such as roads, schools, and hospitals. If you don't pay your tax liability, you may have to pay penalties or face legal consequences.
A more thorough explanation:
Tax liability
Tax liability is the amount of money a person or business owes to the government in taxes.
- John owes $5,000 in federal income taxes for the year.
- Samantha's business owes $10,000 in state sales taxes for the quarter.
These examples illustrate tax liability because both John and Samantha owe money to the government for taxes. Tax liability can come from various types of taxes, such as income tax, sales tax, property tax, and more. It is important to pay tax liability on time to avoid penalties and interest charges.