A deferred tax liability is a tax payment that a company has listed on its balance sheet but does not have to pay until a future tax period. It arises from temporary differences between the taxes recorded under book (U.S. GAAP) and tax accounting, where the actual amount of taxes paid to the IRS were less than the amount reported on the income statement. The deferred tax liability is deferred due to a difference in timing between when the tax was accrued and when it is due to be paid. For example, it might reflect a taxable transaction such as an installment sale that took place on a certain date but the taxes will not be due until a later date.

Deferred tax liabilities are calculated as the companys anticipated tax rate times the difference between its taxable income and accounting earnings before taxes. The most common example of a deferred tax liability is due to differences between how depreciation is calculated by an appropriate tax authority versus GAAP or IFRS accounting.

Deferred tax liabilities are important because they represent a future tax payment that the company is obligated to pay in the future. They can impact a companys financial statements and tax obligations. However, it is important to note that deferred tax liabilities do not mean that the company has not fulfilled its tax obligations. Rather, it recognizes a payment that is not yet due.