What does "tax liability" mean?

Answer 1

The total tax as shown on your tax return. This will equal what you've paid in, plus any amount you still owe, or the total that you paid in minus your refund if you're getting one. It's the amount of tax you actually pay to the government for the year.

Answer 2

Typically it is a phrased used something similar to this: "You're tax liability this year is . . . "

Basically it reffers to an ammount that you, someone or some corporation owe in taxes to the governemnt. Ideally you want to lower your tax liability through as many deductions as you are legally entitled to.

For example: deduction the interest paid on a home mortgage will lower your tax liability. If you maid 50,000 last year in income, and paid say $5,000 in interest on your home loan, you're taxable income will be $45,000 and not the $50,000. Which means that ammount the government wants will be less.