Tax Expense

AAA

DEFINITION of 'Tax Expense'

A liability owing to federal, state/provincial and municipal governments. Tax expenses are calculated by multiplying the appropriate tax rate of an individual or business by their income before taxes, after factoring in such variables as non-deductible items, tax assets and tax liabilities.

INVESTOPEDIA EXPLAINS 'Tax Expense'

Determining the appropriate tax rate and identifying the correct accounting methods for items affecting one's tax expense are carefully described by tax authorities such as the IRS and GAAP/IFRS.

RELATED TERMS
  1. Conditional Sales Agreement

    A lease agreement banks can offer to business customers that ...
  2. Tax Deduction

    A deduction from gross income that arises due to various types ...
  3. Liability

    A company's legal debts or obligations that arise during the ...
  4. Tax Credit

    An amount of money that a taxpayer is able to subtract from the ...
  5. Tax Liability

    The total amount of tax that an entity is legally obligated to ...
  6. Tax Rate

    The percentage at which an individual or corporation is taxed. ...
Related Articles
  1. 12 Things You Need To Know About Financial ...
    Investing Basics

    12 Things You Need To Know About Financial ...

  2. Tax-Saving Advice For IRA Holders
    Taxes

    Tax-Saving Advice For IRA Holders

  3. Accounting Rules Could Roil The Markets
    Bonds & Fixed Income

    Accounting Rules Could Roil The Markets

  4. Reading The Balance Sheet
    Investing Basics

    Reading The Balance Sheet

comments powered by Disqus
Hot Definitions
  1. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following: ...
  2. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  3. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  4. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  5. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  6. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
Trading Center