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What does "tax liability" mean? Is that the amount I still owe?

Not really. Your tax liability is the total amount of tax on your income minus any non-refundable credits such as child tax credit, saver’s credit, dependent care credit to name a few.

This can also include additional taxes like self-employment tax, household employment tax, and tax penalties such as the 10% early distribution penalty for IRAs.

If your tax withholdings and payments fell short of your tax liability for the year, the unpaid difference is the tax you owe. And if your withholdings and payments exceeded your tax liability, the difference is your tax refund.

Your federal tax liability amount is found on Form 1040 (line 16).

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