Tax liability refers to the amount of money a person or entity owes to the government as a result of their taxable income or possessions. It represents their legal obligation to pay taxes to the government based on their financial situation, and failing to fulfill this obligation can have legal consequences.
Full definition
If you have a state
income tax liability of $ 3,000 in a certain year, you can apply part of your $ 20,000 credit.
You've still got time to make some last - minute moves in 2018 that'll lower your overall income
tax liability for 2017.
This strategy can provide your spouse with additional assets to better utilize his or her applicable exclusion amount, thereby minimizing the combined gift and estate
tax liabilities of you and your spouse.
Typically, mutual funds are more likely to pass capital gains
tax liability on to their investors on a regular basis.
This approach may enable investors to avoid a big jump in
tax liability in a single year.
This is not to be confused with your effective tax rate, which is determined by dividing your total federal
tax liability by your total income.
Instead of the normal 50 % inclusion rate, you'd have zero capital
gain tax liability on the securities transferred, plus you will get a charitable donation tax credit.
Dedicated professional with extensive knowledge of the tax codes and ways to legally
lower tax liability for clients.
This subject certainly won't get your adrenaline pumping unless you are facing a large income
tax liability from the sale of rental, investment or business use property.
This allows you to reduce your
federal tax liability by the amount of your credit, which reduces the overall amount of taxes that you are required to pay for the year.
· Lower Estate Taxes — Reduce or possibly eliminate an
estate tax liability with the assets being used.
On the flip side, there could be a large
tax liability if the post secondary plans do not work out.
If you are concerned
with tax liability, you should consider making tax - free gifts in order to reduce the amount of your taxable estate.
Your
state tax liability depends on where you earn your living, not on the location of the headquarters of the company that pays you.
You can also reduce the face amount of a loan or surrender a certain amount of cash value to avoid
incurring tax liability from a policy's lapse.
Not only could this create
increased tax liability for a law firm, it could also result in a legal accounting audit that could further result in compliance issues for the firm.
When everything works well, that can simplify things for taxpayers, as it avoids having to use two completely different sets of rules to
calculate tax liability for federal and state purposes.
They can increase balances and lead to a big future
tax liability at this point.
The accumulation of cash in the policy can be accessed through policy loans or partial surrender
without tax liability.
While some may benefit in the short term from
avoiding tax liability on the like - kind exemption theory, this is a dangerous game to play.
Of course, you will have to pay taxes on the income you failed to report, as well as any
additional tax liability incurred if it bumps you into the next tax bracket.
People often turn to annuities for the tax benefits, as the structure allows owners to delay
tax liability until later in life.
You'll pay higher taxes the year you convert the funds, but you might be able to reduce
future tax liabilities.
The program provides a special tax credit to qualified borrowers, which reduces their federal income
tax liability over the life of the mortgage.
Yet there are still some legitimate ways of reducing
tax liability through investments in certain types of partnership or limited liability company arrangements involving such activities as oil and gas drilling.
A corporation with a «business presence» in another state will also likely incur
tax liabilities associated with its «nexus» to the state.
2017 is in the books at this point, and little can be done
about tax liability incurred in the past.
For this reason, many people who are considering a wrongful death or survival action wonder if they can avoid incurring a
significant tax liability when they receive a settlement or award.
Carefully estimate the impact of a conversion on your overall
tax liability before you make the move.
The idea of significantly and perfectly legally reducing
annual tax liabilities in lower tax jurisdictions is a major temptation.
You have few options to change your prior
year tax liability once you begin your tax return preparation.
Understanding capital gains taxes and how they affect your own
personal tax liability is a key part of investment planning.
Those giving to a school - based charity, for instance, would see their annual
property tax liability drop by 95 percent, not the full 100 percent based on the donation.
If you are currently making payments on an installment plan, you can use this form to apply to roll your new
tax liability into your current payment plan.
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