Q: What is an income tax expense and an income tax payable?
A: An income tax expense is the amount of income tax due on a company's operations. It is reported on the income statement following a summation of company revenue and company expenses.It is the very last expense on the income statement.
An income tax payable is the amount of an income tax expense that a company has yet to pay. It is an obligation, a liability, reported on the balance sheet. For example, a company's income tax expense for a full year may be $10,000 but if it has only paid $7,500 of that amount by year end, the remaining amount due – $2,500 – would be reported on the liability side of the company's balance sheet as income tax payable.
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