Instructions for Schedule J (Form 1040), Income Averaging for Farmers and Fishermen

If line 15 is zero or less, enter -0- on line 16. Otherwise, figure the tax on the amount on line 15 using:

The 2008 Tax Rate Schedules on page J-11,
The 2008 Qualified Dividends and Capital Gain Tax Worksheet on page J-12,
The 2008 Schedule D Tax Worksheet in the 2008 Schedule D instructions (but use the 2008 Tax Rate Schedules on page J-11 when figuring the tax on the Schedule D Tax Worksheet, lines 33 and 35), or
The 2008 Foreign Earned Income Tax Worksheet on page J-13.

If your elected farm income includes net capital gain, you must use the 2008 Schedule D Tax Worksheet to figure the tax on the amount on line 15. However, if you filed Form 2555 or 2555-EZ for 2008, you must first complete the 2008 Foreign Earned Income Tax Worksheet, and then use the 2008 Schedule D Tax Worksheet to figure the tax on the amount on line 3 of that worksheet.

When completing the Schedule D Tax Worksheet, you must allocate 1/3 of the amount on line 2b (and 1/3 of the amount on line 2c, if any) to 2008. If for 2008 you had a capital loss that resulted in a capital loss carryover to 2009, do not reduce the elected farm income allocated to 2008 by any part of the carryover.

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2008 Tax Rate Schedules—Line 16

Schedule X—Use if your 2008 filing status was Single or you checked filing status box 1 or 2 on Form 1040NR					Schedule Y-2—Use if your 2008 filing status was Married filing separately or you checked filing status box 3, 4, or 5 on Form 1040NR
If Schedule J, line 15, is: Over—	But not over—	Enter on Schedule J, line 16		of the amount over—	If Schedule J, line 15, is: Over—	But not over—	Enter on Schedule J, line 16		of the amount over—
$0 8,025 32,550 78,850 164,550 357,700	$8,025 32,550 78,850 164,550 357,700 .............	........... $802.50 + 4,481.25 + 16,056.25 + 40,052.25 + 103,791.75 +	10% 15% 25% 28% 33% 35%	$0 8,025 32,550 78,850 164,550 357,700	$0 8,025 32,550 65,725 100,150 178,850	$8,025 32,550 65,725 100,150 178,850 .............	........... $802.50 + 4,481.25 + 12,775.00 + 22,414.00 + 48,385.00 +	10% 15% 25% 28% 33% 35%	$0 8,025 32,550 65,725 100,150 178,850
Schedule Y-1—Use if your 2008 filing status was Married filing jointly or Qualifying widow(er) or you checked filing status box 6 on Form 1040NR					Schedule Z—Use if your 2008 filing status was Head of household
If Schedule J, line 15, is: Over—	But not over—	Enter on Schedule J, line 16		of the amount over—	If Schedule J, line 15, is: Over—	But not over—	Enter on Schedule J, line 16		of the amount over—
$0 16,050 65,100 131,450 200,300 357,700	$16,050 65,100 131,450 200,300 357,700 ............	........... $1,605.00 + 8,962.50 + 25,550.00 + 44,828.00 + 96,770.00 +	10% 15% 25% 28% 33% 35%	$0 16,050 65,100 131,450 200,300 357,700	$0 11,450 43,650 112,650 182,400 357,700	$11,450 43,650 112,650 182,400 357,700 .............	........... $1,145.00 + 5,975.00 + 23,225.00 + 42,755.00 + 100,604.00 +	10% 15% 25% 28% 33% 35%	$0 11,450 43,650 112,650 182,400 357,700

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2008 Qualified Dividends and Capital Gain Tax Worksheet—Line 16

Use this worksheet only if both of the following apply. Your elected farm income on your 2009 Schedule J, line 2a, does not include any net capital gain. You (a) entered qualified dividends on your 2008 Form 1040, line 9b (or your 2008 Form 1040A, line 9b, or 2008 Form 1040NR, line 10b); (b) entered capital gain distributions directly on your 2008 Form 1040, line 13 (or your 2008 Form 1040A, line 10, or 2008 Form 1040NR, line 14) and were not required to file Schedule D; or (c) filed Schedule D in 2008 and you answered "Yes" on lines 17 and 20 of that Schedule D.
1.	Amount from your 2009 Schedule J, line 15. If for 2008 you filed Form 2555 or 2555-EZ, enter the amount from line 3 of the worksheet on page J-13			1.
2.	Amount from your 2008 Form 1040, line 9b* (or your 2008 Form 1040A, line 9b, or 2008 Form 1040NR, line 10b)		2.
3.	Did you file Schedule D in 2008?*
	Yes.	Enter the smaller of line 15 or 16 of your 2008 Schedule D, but do not enter less than -0-	3.
	No.	Enter the amount from your 2008 Form 1040, line 13 (or your 2008 Form 1040A, line 10, or 2008 Form 1040NR, line 14)
4.	Add lines 2 and 3		4.
5.	Amount, if any, from your 2008 Form 4952, line 4g		5.
6.	Subtract line 5 from line 4. If zero or less, enter -0-			6.
7.	Subtract line 6 from line 1. If zero or less, enter -0-			7.
8.	Enter the smaller of:
	The amount on line 1, or
	$32,550 if single or married filing separately, or if you checked filing status box 1, 2, 3, 4, or 5 on Form 1040NR;			8.
	$65,100 if married filing jointly or qualifying widow(er) or if you checked filing status box 6 on Form 1040NR; $43,650 if head of household.
9.	Is the amount on line 7 equal to or more than the amount on line 8?
	Yes.	Skip lines 9 and 10; go to line 11 and check the "No" box.
	No.	Enter the amount from line 7		9.
10.	Subtract line 9 from line 8			10.
11.	Are the amounts on lines 6 and 10 the same?
	Yes.	Skip lines 11 through 14; go to line 15.
	No.	Enter the smaller of line 1 or line 6		11.
12.	Enter the amount from line 10 (if line 10 is blank, enter -0-)			12.
13.	Subtract line 12 from line 11			13.
14.	Multiply line 13 by 15% (.15)				14.
15.	Figure the tax on the amount on line 7. Use the 2008 Tax Rate Schedules on page J-11				15.
16.	Add lines 14 and 15				16.
17.	Figure the tax on the amount on line 1. Use the 2008 Tax Rate Schedules on page J-11				17.
18.	Tax. Enter the smaller of line 16 or line 17 here and on your 2009 Schedule J, line 16. If for 2008 you filed Form 2555 or 2555-EZ, do not enter this amount on Schedule J, line 16. Instead, enter it on line 4 of the worksheet on page J-13				18.
*If for 2008 you filed Form 2555 or 2555-EZ, see the footnote in the worksheet on page J-13 before completing this line.

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2008 Foreign Earned Income Tax Worksheet—Line 16

Use this worksheet if you claimed the foreign earned income exclusion or housing exclusion on your 2008 Form 1040 using Form 2555 or 2555-EZ. However, if Schedule J, line 15, is zero or less do not complete this worksheet.
1.	Enter the amount from your 2009 Schedule J, line 15	1.
2.	Enter the amount from your (and your spouse's, if filing jointly) 2008 Form 2555, lines 45 and 50, or Form 2555-EZ, line 18	2.
3.	Add lines 1 and 2	3.
4.	Tax on the amount on line 3. Use the 2008 Tax Rate Schedules on page J-11, the 2008 Qualified Dividends and Capital Gain Tax Worksheet on page J-12,* or the 2008 Schedule D Tax Worksheet in the 2008 Schedule D instructions,* whichever applies.	4.
5.	Tax on the amount on line 2. Use the 2008 Tax Rate Schedules on page J-11.	5.
6.	Subtract line 5 from line 4. Enter the result. If zero or less, enter -0-. Also include this amount on your 2009 Schedule J, line 16	6.
*Enter the amount from line 3 above on line 1 of the 2008 Qualified Dividends and Capital Gain Tax Worksheet or the 2008 Schedule D Tax Worksheet if you use either of those worksheets to figure the tax on line 4 above. Complete the rest of that worksheet through line 6 (line 10 if you use the Schedule D Tax Worksheet). Next, you must determine if you had a capital gain excess. To find out if you had a capital gain excess, subtract the amount from your 2009 Schedule J, line 15, from line 6 of your 2008 Qualified Dividends and Capital Gain Tax Worksheet (line 10 of your 2008 Schedule D Tax Worksheet). If the result is more than zero, that amount is your capital gain excess.
If you did not have a capital gain excess, complete the rest of either of those worksheets according to the worksheet's instructions. Then complete lines 5 and 6 above.
If you had a capital gain excess, complete a second 2008 Qualified Dividends and Capital Gain Tax Worksheet or 2008 Schedule D Tax Worksheet (whichever applies) as instructed above but in its entirety and with the following additional modifications. Then complete lines 5 and 6 above. These modifications are to be made only for purposes of filling out the 2008 Foreign Earned Income Tax Worksheet above.
1. Reduce the amount you would otherwise enter on line 3 of your 2008 Qualified Dividends and Capital Gain Tax Worksheet or line 9 of your 2008 Schedule D Tax Worksheet (but not below zero) by your capital gain excess.
2. Reduce the amount you would otherwise enter on your 2008 Form 1040, line 9b, (but not below zero) by any of your capital gain excess not used in (1) above.
3. Reduce the amount on your 2008 Schedule D (Form 1040), line 18, (but not below zero) by your capital gain excess.
4. Include your capital gain excess as a loss on line 16 of your 2008 Unrecaptured Section 1250 Gain Worksheet on page D-9 of the 2008 Instructions for Schedule D (Form 1040).

If you amended your return or the IRS made changes to it, enter the corrected amount.

Line 16(p10)

Lines 19, 20, and 21(p13)

2008 Tax Rate Schedules—Line 16

2008 Foreign Earned Income Tax Worksheet—Line 16