What does Tax Liability mean?

Try browing irs.gov website and typing keywords in the search box. You can learn a lot there. Your earned income (salary, wages, tips) primarily determine what tax bracket (% rate of total) that is your tax liability or the amount of money you are legally responsible to pay the local, state, and federal government to help pay for schools, police, roads, ect. When you get a job, you fill out a W4 form which is an IRS tax witholding form. The number you enter in the box determines how much is with held from each paycheck. At the end of the year, you "balance the checkbook" so to speak with the government on how much you owe and how much they with held. Any excess is a REFUND to you however, its also an interest free loan you gave to the govt for the year. You want your refund to be as close to zero as possible. You want your money to work for you in a savings or investment account instead of working against you buy the govt borrowing it from you for free making money for them.

If you're referring to the economic stimulus payments, net tax liability refers to the amount of tax owed before any withholding or estimated tax payments and after any non-refundable credits except for the child tax credit. You can determine the net tax liability by adding these lines: Form 1040 Lines 57 + 52 Form 1040A Lines 35 + 32 Form 1040EZ Line 10

90% of the people who post on this board don't seem to distinguish between their actual tax bill and their withholding through work. If I owe $3000 in tax and have $4000 withheld, that's a $1000 refund. If I have $2500 withheld, that's short $500 at tax time, but it's *still* a $3000 tax bill....