income tax payable

Definition

Account that receives funds that are necessary to meet tax obligations for that year. This account is listed in a company's general ledger as current liabilities. Some companies use this account to pay taxes on a monthly, quarterly, or yearly basis. The amount present in the account may fluctuate depending on current corporate tax liabilities and laws.

Use income tax payable in a sentence

You should try and figure out how much the income tax payable will be and be prepared to deal with it.

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The income tax payable had been accruing and accumulating with funds steadily which covered our tax obligations for the year.

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Though he was an independent contractor, Peter found he needed an income tax payable category in his business accounting to track his self-employment taxes.

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