Income Tax Payable
Categories: Tax, Accounting
You made money last year. Now you owe tax. That tax is your income tax payable.
Why is it payable? Because you haven't paid it...yet. You earned it in 2020, the year of hindsight. But now it's February of 2021. You owe $34,231 in taxes. Those income taxes are payable now, please.
And note that this number can be a big deal in larger corporations that typically carry forward millions in delayed income taxes, which carry a soft spot on their financial statements.