Income Tax Payable

AAA

DEFINITION of 'Income Tax Payable'

A type of account in the current liabilities section of a company's balance sheet. This account is comprised of taxes that must be paid to the government within one year. Income tax payable is calculated according to the prevailing tax law in the company's home country.

INVESTOPEDIA EXPLAINS 'Income Tax Payable'

This account is usually identified in the balance sheet when the company has received its tax bill but has put off paying it for the time being. The taxes are calculated on the company's net income according to its corporate tax rate. If a company is due to receive a tax benefit from its respective revenue agency, the amount of income tax payable will decrease.

VIDEO

RELATED TERMS
  1. Tax Expense

    A liability owing to federal, state/provincial and municipal ...
  2. Balance Sheet

    A financial statement that summarizes a company's assets, liabilities ...
  3. Corporate Tax

    A levy placed on the profit of a firm, with different rates used ...
  4. Current Liabilities

    A company's debts or obligations that are due within one year. ...
  5. Income Tax

    A tax that governments impose on financial income generated by ...
  6. Internal Revenue Service - IRS

    A United States government agency that is responsible for the ...
Related Articles
  1. Tax Tips For The Individual Investor
    Retirement

    Tax Tips For The Individual Investor

  2. How To File Your Child's First Income ...
    Taxes

    How To File Your Child's First Income ...

  3. Winning The Jackpot: Dream Or Financial ...
    Taxes

    Winning The Jackpot: Dream Or Financial ...

  4. Surviving The IRS Audit
    Taxes

    Surviving The IRS Audit

comments powered by Disqus
Hot Definitions
  1. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  2. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  3. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  4. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
  5. Over The Counter

    A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" ...
  6. Earnings Before Interest After Taxes - EBIAT

    A financial measure that is an indicator of a company's operating performance. EBIAT, which is equivalent to after-tax EBIT ...
Trading Center