What is tax liability & how to calculate it?
Tax liability is the amount of money you owe to tax authorities.(Tax authorities include your local, state, and federal departments).
How to calculate?
Your tax liability would be a portion of the taxable income based on the applicable tax rate. The taxable income is derived from income your earn by taking into account tax credits (child and dependent care expenses, retirement savings contributions, residential energy saving, educational credits etc. ) and additional taxes (e.g., self-employment tax).