The purpose of this worksheet is to determine your estimated tax liability as your income accumulates throughout the year, rather than dividing your entire year's estimated tax liability by four as if your income was earned equally throughout the year. The top of the worksheet (see page 27) shows the dates for each payment period. The periods build; that is, each period includes all previous periods. After the end of each payment period, complete the corresponding worksheet column to figure the payment due for that period.
Enter your AGI for the period. This is your gross income, including your share of partnership or S corporation income or loss, for the period, minus your adjustments to income for that period. See Expected AGI—Line 1 on page 21. taxmap/pubs/p505-014.htm#en_us_publink10007408
If you had self-employment income, first complete Section B of this worksheet. Use the amounts on line 39 when figuring the AGI to enter in each column of Section A, line 1. taxmap/pubs/p505-014.htm#en_us_publink10007409
Be sure to consider all deduction limits figured on Schedule A (Form 1040), such as reducing your medical expenses by 7.5% of your AGI, or reducing certain miscellaneous deductions by 2% of your AGI. Figure your deduction limits using your expected AGI in the corresponding column of line 1 (2009 Annualized Estimated Tax Worksheet (Worksheet 2-10)).taxmap/pubs/p505-014.htm#en_us_publink10007410
Multiply line 4 by line 5 and enter the result on line 6, unless line 3 is more than $166,800 ($83,400 if married filing separately). In that case, use Worksheet 2-11 on page 45 to figure the amount to enter on line 6. Complete Worksheet 2-11 for each period, as necessary. taxmap/pubs/p505-014.htm#en_us_publink10007411
If you will not itemize your deductions, use Worksheet 2-3 (see page 38) to figure your standard deduction. taxmap/pubs/p505-014.htm#en_us_publink10007412
Multiply $3,650 by your total expected exemptions and enter the result on line 10, unless line 3 is more than the amount shown below for your filing status.
|Married filing jointly or |
|Married filing separately||$125,100|
|Head of household||$208,500|
In that case, use Worksheet 2-12 on page 46 to figure the amount to enter on line 10. However, if in 2009 you provide housing to individuals displaced by a Midwestern disaster, see Taxpayers housing individuals displaced by a Midwestern disaster on page 22. Then complete Worksheet 2-6 on page 40 before entering an amount on line 10 of your 2009 Annualized Estimated Tax Worksheet (Worksheet 2-10).taxmap/pubs/p505-014.htm#en_us_publink10007413
Generally, you will use the 2009 Tax Rate Schedules on page 40 or in the instructions to Form 1040-ES to figure the tax on your annualized income. However, see below for situations where you must use a different method to compute your estimated tax. taxmap/pubs/p505-014.htm#en_us_publink10007414
You must use a special method to figure tax on the income of the following children who have more than $1,900 of investment income.
- Children under age 18 at the end of 2009.
- The following children if their earned income is not more than half their support.
- Children age 18 at the end of 2009.
- Children who are full-time students over age 18 and under age 24 at the end of 2009.
See Publication 929. taxmap/pubs/p505-014.htm#en_us_publink10007415
The regular income tax rates for individuals do not apply to a net capital gain. Instead, your net capital gain is taxed at a lower maximum rate.
The term "net capital gain" means the amount by which your net long-term capital gain for the year is more than your net short-term capital loss.taxmap/pubs/p505-014.htm#en_us_publink10007416
Generally, the maximum tax rate for qualified dividends is 15% (0% for people whose other income is taxed at the 10% or 15% rate).
Tax on capital gain and qualified dividends. If the amount on line 1 includes a net capital gain or qualified dividends, use Worksheet 2-13 on page 47 to figure the amount to enter on line 12.
Tax if excluding foreign earned income or excluding or deducting foreign housing. If you expect to claim the foreign earned income exclusion or the housing exclusion or deduction on Form 2555 or Form 2555-EZ, use Worksheet 2-14 on page 48 to figure the amount to enter on line 12.
Enter your self-employment tax for the period from Section B, line 37.taxmap/pubs/p505-014.htm#en_us_publink10007420
Add your expected other taxes.
Other taxes include:
- Additional tax on early distributions from:
- An IRA or other qualified retirement plan,
- A tax-sheltered annuity, or
- A modified endowment contract entered into after June 20, 1988;
- Advance earned income credit payments;
- Household employment taxes (before subtracting advance EIC payments made to your employee(s)) if:
- You will have federal income tax withheld from wages, pensions, annuities, gambling winnings, or other income, or
- You would be required to make estimated tax payments even if you did not include household employment taxes when figuring your estimated tax; and
- Amounts written in on Form 1040 on the line for "total tax" (line 61 on the 2008 Form 1040). But do not include tax on recapture of a federal mortgage subsidy, tax on golden parachute payments, look-back interest due under section 167(g) or 460(b) of the Internal Revenue Code, excise tax on insider stock compensation from an expatriated corporation, or uncollected employee social security, Medicare, or RRTA tax on tips or group-term life insurance.
- Repayment of the first-time homebuyer credit if the home will cease to be your main home in 2009. See Form 5405 for exceptions.
- Tax from Form 4972.
- Tax from Form 8814.
- Tax from recapture of an education credit.
- Use Form 6251 to see if you also owe the alternative minimum tax (AMT). Figure alternative minimum taxable income based on your income and deductions during the period shown in the column headings. Multiply this amount by the annualization amounts shown for each column on line 2 of the 2009 Annualized Estimated Tax Worksheet (Worksheet 2-10). Include any AMT owed in the amount on line 14 of this worksheet.
Include all the credits (other than withholding credits) you can claim because of events that occurred during the period. If you are using your 2008 return as a guide and filed Form 1040, your 2008 credits included the total credits on line 55, and the credits shown on lines 64a, 66, 68 (boxes b, c, and d), and 69. If you filed Form 1040A, your 2008 credits included the credits on lines 34, 40a, and 41.
Increase your credits for the Making Work Pay credit. Use Worksheet 2-15 on page 49 to figure this credit.taxmap/pubs/p505-014.htm#en_us_publink10007424
If line 24 is smaller than line 21 and you are not certain of the estimate of your 2009 tax, you can avoid a penalty by entering the amount from line 21 on line 25.taxmap/pubs/p505-014.htm#en_us_publink10007425
For each period, include estimated tax payments made and any excess social security and railroad retirement tax.
Also include estimated federal income tax withholding. One-fourth of your estimated withholding is considered withheld on the due date of each payment period. To figure the amount to include on line 27 for each period, multiply your total expected withholding for 2009 by:
- 25% (.25) for the first period,
- 50% (.50) for the second period,
- 75% (.75) for the third period, and
- 100% (1.00) for the fourth period.
However, you may choose to include your withholding according to the actual dates on which the amounts will be withheld. For each period, include withholding made from the beginning of the period up to and including the payment due date. You can make this choice separately for the taxes withheld from your wages and all other withholding. For an explanation of what to include in withholding, see Total Estimated Tax Payments Needed—Line 16a on page 24. taxmap/pubs/p505-014.htm#en_us_publink10007427
If you will file Form 1040NR and you do not receive wages as an employee subject to U.S. income tax withholding, the instructions for the worksheet are modified as follows.
- Skip column (a).
- On line 1, enter your income for the period that is effectively connected with a U.S. trade or business.
- On line 17, increase your entry by the amount determined by multiplying your income for the period that is not effectively connected with a U.S. trade or business by the following.
However, if you can use a treaty rate lower than 30%, use the percentages determined by multiplying your treaty rate by 2.4, 1.5, and 1, respectively.
- 72% for column (b).
- 45% for column (c).
- 30% for column (d).
- On line 22, enter one-half of the amount from line 16c of the Form 1040-ES (NR) 2009 Estimated Tax Worksheet in column (b), and one-fourth in columns (c) and (d).
- On lines 20 and 23, skip column (b).
- On line 27, if you do not use the actual withholding method, include one-half of your total expected withholding in column (b) and one-fourth in columns (c) and (d).
See Publication 519 for more information.
You do not have to pay estimated tax if your withholding in each payment period is at least as much as:
- One-fourth of your required annual payment, or
- Your required annualized income installment for that period.
You also do not have to pay estimated tax if you will pay enough through withholding to keep the amount you will owe with your return under $1,000.