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taxmap/pubs/p505-016.htm#en_us_publink10007439

Illustrated Examples(p27)


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previous topic occurrence Illustrated Examples next topic occurrence

The following examples show how to figure estimated tax payments under the regular installment method and under the annualized income installment method.
taxmap/pubs/p505-016.htm#en_us_publink10007440

Example 1—Regular  
Installment Method(p27)


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Example 1 - Regular Installment Method

Early in 2010, Anne and Larry Jones figure their estimated tax payments for the year. They expect to receive the following income during 2010.
Larry's salary$39,900
State tax refund (they itemized deductions in 2009)600
Anne's net profit from self-employment40,100
Net rental income6,205
Interest income 2,784
Total$89,589
  
They also use the following expected items to figure their 2010 estimated tax.
Adjustment to income for IRA contributions$  1,000
Itemized deductions17,825
Deduction for exemptions ($3,650 × 2)7,300
Making work pay credit800
Withholding2,568
The Joneses plan to file a joint return. They use the 2010 Estimated Tax Worksheet included in Form 1040-ES to figure their estimated tax payments. See their filled-in worksheet  
(Figure 2-D) on page 29.
taxmap/pubs/p505-016.htm#en_us_publink10007441

Expected AGI.(p27)


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Anne can claim an income tax deduction for one-half of her self-employment tax as an adjustment to income. So before the Joneses figure their expected AGI, they figure Anne's expected self-employment tax. See their filled-in Worksheet 2-2 below. taxmap/pubs/p505-016.htm#w15008e03

Worksheet 2-2.  2010 Estimated Tax Worksheet—Lines 1 and 11
Expected Self-Employment Tax and Deduction
—Illustrated (Anne Jones)

1.a.Enter your expected income and profits subject to self-employment tax*1a. $40,100    
 b.If you will have farm income and also receive social security retirement or disability benefits, enter your expected Conservation Reserve Program payments that will be included on Schedule F (Form 1040) or listed on Schedule K-1 (Form 1065)1b.                
2. Subtract line 1b from line 1a2. 40,100    
3. Multiply line 2 by 92.35% (.9235)3. 37,032    
4. Multiply line 3 by 2.9% (.029)4. 1,074 
5. Social security tax maximum income5. $106,800    
6. Enter your expected wages (if subject to social security tax or the 6.2% portion of tier 1 railroad retirement tax)6. -0-      
7. Subtract line 6 from line 57. 106,800    
   Note. If line 7 is zero or less, enter -0- on line 9 and skip to line 10.     
8. Enter the smaller of line 3 or line 78. 37,032    
9. Multiply line 8 by 12.4% (.124)9. 4,592 
10. Add line 4 and line 9. Enter the result here and on line 11 of your 2010 Estimated Tax Worksheet (or line 16 of the Annualized ES Worksheet (Worksheet 2-7))10. $ 5,666 
11. Multiply line 10 by 50% (.50). This is your expected deduction for one-half of your self-employment tax. Subtract this amount when figuring your expected AGI on line 1 of your 2010 Estimated Tax Worksheet (or Annualized Estimated Tax Worksheet (Worksheet 2-7))11. $ 2,833    
*Your net profit from self-employment is found on Schedule C, line 31; Schedule C-EZ, line 3; Schedule F, line 36; Schedule K-1 (Form 1065), box 14, code A; and Schedule K-1 (Form 1065-B), box 9, code J1.
On line 11 of their 2010 Estimated Tax Worksheet, the Joneses enter $37,032 on the dotted line ($40,100 net profit × .9235) and $5,666 self-employment tax in the blank. They subtract one-half of that amount, $2,833, and their $1,000 adjustment for IRA contributions from their $89,589 total income to find their expected AGI, $85,756. They enter that amount on line 1 of the worksheet.
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Expected taxable income.(p27)


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The Joneses use Worksheet 2-3 (see page 36) to figure their standard deduction, $11,400. This is smaller than their expected itemized deductions, so they enter $17,825 on line 2 of the worksheet. They subtract the amount on line 2 from the amount on line 1 and enter the result, $67,931, on line 3. They enter their deduction for exemptions, $7,300, on line 4. After subtracting this amount, their expected taxable income on line 5 is $60,631.
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Expected taxes and credits.(p28)


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The Joneses use the 2010 Tax Rate Schedule Y-1 on page 34 to figure their expected income tax, and enter $8,257 on line 6 of the worksheet. They do not expect to owe any other taxes that would be entered on lines 7 or 12. They use Worksheet 2-6 on page 39 to figure their making work pay credit of $800. They do not have any other credits that would be entered on lines 9 or 13b, so they leave line 9 blank and enter $800 on line13b.
The Joneses' total estimated tax on line 13c, after adding Anne's self-employment tax from line 11, is $13,123 ($13,923 – $800).
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Estimated tax.(p28)


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The Joneses multiply their total estimated tax by 90% and enter $11,811 on line 14a of the worksheet. They enter their 2009 tax, $14,347, on line 14b. Their required annual payment on line 14c is the smaller amount, $11,811.
They enter Larry's expected withholding, $2,568 on line 15 and subtract it from their required annual payment. Their estimated tax on line 16a is $9,243.
After completing lines 16a and 16b, the Joneses find they are required to pay estimated tax. This is because their estimated withholding (line 15) is:
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Required estimated tax payment.(p28)


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The Joneses must pay their first estimated tax payment by April 15, 2010. They enter one-fourth of their estimated tax (line 16a), $2,311, on line 17 of the worksheet and on their Form 1040-ES payment voucher that shows "Due April 15, 2010." They mail the voucher with their payment to the address shown for their area in the Form 1040-ES instructions and record the payment on the Record of Estimated Tax Payments in the instructions.
If their estimated tax does not change during the year, the Joneses also will pay $2,311 estimated tax by June 15 and September 15, 2010, and January 18, 2011.
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Example 2—Annualized  
Income Installment Method(p28)


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Example 2 - Annualized Income Installment Method

The facts are the same as in Example 1—Regular Installment Method on the previous page, except that the Joneses do not expect to receive their income evenly throughout the year. Anne expects to receive the largest portion of her self-employment income during the last few months of the year, and the Joneses' rental income is from a vacation home rented only from May to mid-October.
After completing their 2010 Estimated Tax Worksheet, the Joneses decide to use the annualized income installment method to see if they can pay less than $2,311 estimated tax for one or more payment periods. They complete the 2010 Annualized Estimated Tax Worksheet (Worksheet 2-7) in this chapter. See their filled-in worksheet ( Figure 2-E) on pages 30 and 31.
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First Period(p28)


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On April 1, 2010, the Joneses complete the first column of the worksheet for the period January 1 through March 31. They had the following income for the period.
Larry's salary$ 9,975
State tax refund600
Anne's net profit from self-employment3,000
Net rental income-0-
Interest income 696
Total$14,271
  
They also take into account the following items for the period.
Adjustment to income for IRA contributions$  150
Itemized deductions2,375
Making work pay credit800
Withholding642
taxmap/pubs/p505-016.htm#en_us_publink10007448

Annualized AGI.(p28)


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Before the Joneses figure their AGI for the period, they first figure Anne's one-half of self-employment tax in Section B, and then her adjustment to income for self-employment tax.
On line 33 of Section B, they enter $2,771, which is Anne's net profit from self-employment for the period ($3,000 x .9235). The prorated social security tax limit is preprinted on line 34. She has no social security wages, so they enter zero on line 35, and $26,700 on line 36. Anne's annualized social security tax on line 38 is $1,374 ($2,771 × .496). Her annualized Medicare tax on line 40 is $321 ($2,771 × .116). Her total annualized self-employment tax on line 41 is $1,695. They enter that amount on line 17 of Section A.
The Joneses figure their adjustment to income for one-half of Anne's self-employment tax on lines 42 and 43 (Section B). That amount is $212 ($1,695 ÷ 8). They subtract that amount and their $150 IRA contributions from their $14,271 total income and enter their AGI for the period, $13,909, on line 1 of Section A. They multiply that amount by 4 and enter their annualized AGI, $55,636 on line 3.
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Annualized taxable income.(p28)


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The Joneses figure their annualized itemized deductions ($2,375 × 4) on lines 4 through 6 of Section A. Because the result is smaller than their standard deduction, they enter their $11,400 standard deduction on line 8. After subtracting that amount and their $7,300 deduction for exemptions, the Joneses' annualized taxable income on line 11 is $36,936.
taxmap/pubs/p505-016.htm#en_us_publink10007450

Annualized taxes and credits.(p28)


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The Joneses use the 2010 Tax Rate Schedule Y-1 on page 34 to figure their annualized income tax, $4,703, which they enter on line 12 of Section A.
They use their 2009 tax return to see what credits may be included on line 15. These are nonrefundable credits on lines 47 through 53 of Form 1040 or lines 29 through 33 if you file Form 1040A. They have no credits listed in this section of their tax return and do not think they will have any in 2010, so they leave line 15 blank.
They have no other taxes for the period that would be entered on line 18, so they leave that line blank and enter $6,398 ($4,703 + $1,695) on line 19.
The Joneses figure their annualized refundable credits on line 20. Refundable credits are found on Form 1040, lines 63 (making work pay credit only), 64a, 65, 66, 67, and on Forms 4136, 8801, and 8885. They have $800 on line 63 and they anticipate no other credits. They enter $800 on line 20. After subtracting their making work pay credit from their total tax, the Joneses' 2010 estimated tax for the period is $5,598 ($6,398 – $800). They enter $5,598 on line 21.
taxmap/pubs/p505-016.htm#en_us_publink10007451

Required estimated tax payment.(p28)


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The Joneses' annualized income installment on lines 23 and 25 of Section A is $1,260 ($5,598 × 22.5%). On lines 26 and 28 they enter $2,953, one-fourth of their $11,811 required annual payment (line 14c of their 2010 Estimated Tax Worksheet). Because their annualized income installment ($1,260) is smaller, they enter that amount on lines 29 and 30.
Larry's total expected withholding for the year is $2,568. The Joneses can treat three months of that amount ($2,568 ÷ 12 = $214 × 3 months = $642) as paid on April 15, or they can use Larry's actual withholding for the period. The Joneses enter $642 on line 30.
On line 31, the Joneses' required estimated tax payment for the period under the annualized income installment method is $618 ($1,260 − $642). They will send in an estimated tax payment of $618 for the first period.
taxmap/pubs/p505-016.htm#en_us_publink10007452

Second, Third, and Fourth Periods(p28)


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After the end of each remaining payment period, the Joneses complete the column of the worksheet for that period (from the beginning of the year through the end of that payment period) in the same way they did for the first period. They had the following income for each period.
  Second
Period
Third
Period
Fourth
Period
 Jan. 1-
May 31
Jan. 1-
Aug. 31
Jan. 1-
Dec. 31
Larry's salary$16,625$26,600$39,900
State tax refund600600600
Anne's net profit from self-employment6,00016,00040,100
Net rental income3654,7456,205
Interest income    1,160   1,856   2,784
Total$24,750$49,801$89,589
    
They also take into account the following items for each period.
  Second
Period
Third
Period
Fourth
Period
 Jan. 1-
May 31
Jan. 1-
Aug. 31
Jan. 1-
Dec. 31
Adjustment to income for IRA contributions$  250$  400$ 1,000
Itemized deductions4,7509,25017,825
Making work pay credit800800800
Withholding1,0701,7122,568
For the second period, as for the first, the annualized income installment method allows the Joneses to pay less than their required payment under the regular installment method. They make up the difference in the third and fourth periods when their income is higher.
Because the Joneses are using the annualized income installment method, they must file Form 2210 with their tax return for 2010.
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taxmap/pubs/p505-016.htm#en_us_publink10007453
taxmap/pubs/p505-016.htm#f15008e26

Figure 2-E. Annualized Income Installment Method—Illustrated Example 2
(Anne and Larry Jones)


Worksheet 2-7. 2010 Annualized Estimated Tax Worksheet
Note. For instructions, see Annualized Income Installment Method beginning on page 23.
Section A (For Figuring Your Annualized Estimated Tax Payments)—Complete each column after end of period shown.
Estates and trusts: Use the following ending dates in columns (a) through (d):
2/28/2010, 4/30/2010, 7/31/2010, 11/30/2010.
(a)
1/1/10-3/31/10
(b)
1/1/10-5/31/10
(c)
1/1/10-8/31/10
(d)
1/1/10-12/31/10
 1Adjusted gross income (AGI) for each period (see instructions). Estates and trusts, enter your taxable income without your exemption for each period. Self-employed: Complete Section B first113,90924,07648,27185,756
 2Annualization amounts. (Estates and trusts, see instructions)2 4 2.4 1.5 1
 3Annualized income. Multiply line 1 by line 2355,63657,78272,40785,756
 4If you itemize, enter itemized deductions for period shown in the column headings (see instructions). All others, enter -0- and skip to line 7. Exception: Estates and trusts, skip to line 9 and enter amount from line 342,3754,7509,25017,825
 5Annualization amounts5 4 2.4 1.5 1
 6Multiply line 4 by line 5 (see instructions)69,50011,40013,87517,825
 7Standard deduction from Worksheet 2-3711,40011,40011,40011,400
 8Enter the larger of line 6 or line 7811,40011,40013,87517,825
 9Subtract line 8 from line 3944,23646,38258,53267,931
10In each column, multiply $3,650 by your total expected number of exemptions (see instructions). (Estates and trusts, see instructions)107,3007,3007,3007,300
11Subtract line 10 from line 9. If zero or less, enter -0-1136,93639,08251,23260,631
12Figure your tax on the amount on line 11 (see instructions)124,7035,0256,8478,257
13For each period, enter any tax from Forms 8814, 4972, and 6251 (or the Alternative Minimum Tax Worksheet in the Form 1040A instructions). Also include any recapture of education credits (see instructions)13    
14Add lines 12 and 13144,7035,0256,8478,257
15Enter nonrefundable credits for each period (see instructions)150000
16Subtract line 15 from line 14164,7035,0256,8478,257
17Self-employment tax from line 41 of Section B171,6952,0353,3915,666
18Enter other taxes for each period (see instructions)18    
19Total tax. Add lines 16, 17, and 18196,3987,06010,23813,923
20Enter refundable credits for each period (see instructions for type of credits allowed). Do not include any income tax withholding on this line20800800800800
21Subtract line 20 from line 19. If zero or less, enter -0-215,5986,2609,43813,123
22Applicable percentage22 22.5% 45% 67.5% 90%
23Multiply line 21 by line 22231,2602,8176,37111,811
  Complete lines 24 through 29 of one column before going to line 24 of the next column.      
24Enter the total of the amounts in all previous columns of line 2924 1,2602,8176,371
25Annualized income installment. Subtract line 24 from line 23. If zero or less, enter -0-251,2601,5573,5545,440
26Enter 25% (.25) of line 14c of the Form 1040-ES Estimated Tax Worksheet in each column262,9532,9532,9532,953
27Subtract line 29 of the previous column from line 28 of that column27 1,6933,0892,488
28Add lines 26 and 27282,9534,6466,0425,441
29Enter the smaller of line 25 or line 28 (see instructions)291,2601,5573,5545,440
30 Total required payments for the period. Add lines 24 and 29301,2602,8176,37111,811
31 Estimated tax payments made (line 32 of all previous columns) plus tax withholding through the due date for the period (see instructions)316421,6883,4597,227
32Estimated tax payment required by the next due date. Subtract line 31 from line 30 and enter the result (but not less than zero) here and on your payment voucher326181,1292,9124,584


taxmap/pubs/p505-016.htm#en_us_publink1000240757

Figure 2-E.  Annualized Income Installment Method—Illustrated Example 2
(Anne and Larry Jones)
(Continued)


Worksheet 2-7. 2010 Annualized Estimated Tax Worksheet(Continued)

Section B (For Figuring Your Annualized Estimated Self-Employment Tax)—Complete each column after end of period shown.
(Form 1040 filers only) (a)
1/1/10-3/31/10
(b)
1/1/10-5/31/10
(c)
1/1/10-8/31/10
(d)
1/1/10-12/31/10
33Net earnings from self-employment for the period (see instructions)332,7715,54114,77637,032
34Prorated social security tax limit34$26,700$44,500$71,200$106,800
35Enter actual wages for the period subject to social security tax or the 6.2% portion of the 7.65% railroad retirement (tier 1) tax.
Exception: If you file Form 4137 or Form 8919, see instructions
350000
36Subtract line 35 from line 34. If zero or less, enter -0-3626,70044,50071,200106,800
37Annualization amounts370.4960.29760.1860.124
38Multiply line 37 by the smaller of line 33 or line 36381,3741,6492,7484,592
39Annualization amounts390.1160.06960.04350.029
40Multiply line 33 by line 39403213866431,074
41Add lines 38 and 40. Enter the result here and on line 17 of
Section A
411,6952,0353,3915,666
42Annualization amounts4284.832
43Deduction for one-half of self-employment tax. Divide line 41 by line 42. Enter the result here. Use this result to figure your AGI on line 1432124241,1302,833
  
taxmap/pubs/p505-016.htm#f15008e0201a

Worksheets for Chapter 2

Table 2-2. Where To Find Worksheets

Use the following worksheets and tables to figure your correct estimated tax.

IF you need...THEN use...ON page...
the 2010 Estimated Tax Worksheet (ES Worksheet) 20, 33
2010 Tax Rate Schedules 34
to estimate your taxable social security and railroad retirement benefits—line 1 of ES Worksheet (or Annualized ES Worksheet (Worksheet 2-7)) Worksheet 2-1 35
to estimate your self-employment (SE) tax and your deduction for one-half of your SE tax—lines 1 and 11 of ES Worksheet (lines 1 and 17 of Annualized ES Worksheet (Worksheet 2-7)) Worksheet 2-2 36
to determine your standard deduction—line 2 of ES Worksheet (line 7 of Annualized ES Worksheet (Worksheet 2-7)) Worksheet 2-3 36
to estimate your income tax if line 1 of your ES Worksheet includes a net capital gain or qualified dividends—line 6 of ES Worksheet Worksheet 2-4 37
to estimate your income tax if you expect to claim a foreign earned income exclusion or foreign housing exclusion or deduction on Form 2555 or Form 2555-EZ—line 6 of ES Worksheet Worksheet 2-5 38
to estimate your making work pay credit—line 13b of ES Worksheet (line 20 of Annualized ES Worksheet (Worksheet 2-7)) Worksheet 2-6 39
the 2010 Annualized Estimated Tax Worksheet (Annualized ES Worksheet) Worksheet 2-7 40–41
to estimate your income tax if line 1 of your Annualized ES Worksheet includes a net capital gain or qualified dividends—line 12 of Annualized ES Worksheet Worksheet 2-8 42
to estimate your income tax if you expect to claim a foreign earned income exclusion or foreign housing exclusion or deduction on Form 2555 or Form 2555-EZ—line 12 of Annualized ES Worksheet Worksheet 2-9 43
to refigure (amend) your estimated tax during the year Worksheet 2-10 43
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taxmap/pubs/p505-016.htm#TXMP7f2be7bf
2010 Estimated Tax Worksheet Text Description2010 Estimated Tax Worksheet  
taxmap/pubs/p505-016.htm#en_us_publink1000207460

2010 Tax Rate Schedules

Caution. Do not use these Tax Rate Schedules to figure your 2009 taxes. Use them only to figure your 2010 estimated taxes.

Schedule X—Use if your 2010 filing status is Single Schedule Z—Use if your 2010 filing status is
Head of household
If line 5 is:The tax is:  of the If line 5 is:The tax is:  of the
Over—  But not
  over—
    amount over—Over—  But not
  over—
     amount over—
                                                                                                                               
$0$8,375  10% $0$0$11,950  10% $0
8,37534,000$837.50+15% 8,37511,95045,550$1,195.00+15% 11,950
34,00082,4004,681.25+25% 34,00045,550117,6506,235.00+25% 45,550
82,400171,85016,781.25+28% 82,400117,650190,55024,260.00+28% 117,650
171,850373,65041,827.25+33% 171,850190,550373,65044,672.00+33% 190,550
373,650 - - - - - -108,421.25+35% 373,650373,650- - - - - -105,095.00+35% 373,650
Schedule Y-1—Use if your 2010 filing status is
Married filing jointly or Qualifying widow(er)
Schedule Y-2—Use if your 2010 filing status is
Married filing separately
If line 5 is:The tax is:  of the If line 5 is:The tax is:  of the
Over—  But not
  over—
    amount over—Over—  But not
  over—
     amount over—
                                                                                                                               
$0$16,750  10% $0$0$8,375  10% $0
16,75068,000$1,675.00+15% 16,7508,37534,000$837.50+15% 8,375
68,000137,3009,362.50+25% 68,00034,00068,6504,681.25+25% 34,000
137,300209,25026,687.50+28% 137,30068,650104,62513,343.75+28% 68,650
209,250373,65046,833.50+33% 209,250104,625186,82523,416.75+33% 104,625
373,650- - - - - -101,085.50+35% 373,650186,825 - - - - - -50,542.75+35% 186,825
              
taxmap/pubs/p505-016.htm#w15008e02

Worksheet 2-1. 2010 Estimated Tax Worksheet—Line 1
Estimated Taxable Social Security and Railroad Retirement Benefits

Note. If you are using this worksheet to estimate your taxable social security or railroad retirement benefits for Worksheet 2-7, 2010 Annualized Estimated Tax Worksheet, multiply the expected amount of benefits for each period by the annualization amount on line 2 for the same period.
  
1.Enter your expected social security and railroad retirement benefits1.                
2.Enter one-half of line 12.             
3.Enter your expected total income. Do not include any social security and railroad retirement benefits, nontaxable interest income, nontaxable IRA distributions, or nontaxable pension distributions3.             
4.Enter your expected nontaxable interest income4.             
5.Enter the total of any exclusions or adjustments for:
  • Qualified U.S. savings bond interest
  • Adoption benefits
  • Foreign earned income or housing
  • Income by bona fide residents of American Samoa or Puerto Rico
5.             
6.Add lines 2, 3, 4, and 56.             
7.Enter your expected adjustments to income. Do not include any student loan interest deduction, tuition and fees deduction, or domestic production activities deduction7.             
8.Subtract line 7 from line 6. If zero or less, stop here. Do not include any social security or railroad retirement benefits in the amount on line 1 of your 2010 Estimated Tax Worksheet (or Annualized ES Worksheet (Worksheet 2-7))8.             
9.Enter $25,000 ($32,000 if you expect to file married filing jointly; $0 if you expect to file married filing separately and expect to live with your spouse at any time during the year)9.             
10.Subtract line 9 from line 8. If zero or less, stop here. Do not include any social security or railroad retirement benefits in the amount on line 1 of your 2010 Estimated Tax Worksheet (or Annualized ES Worksheet (Worksheet 2-7))10.             
11.Enter $9,000 ($12,000 if you expect to file married filing jointly; $0 if you expect to file married filing separately and expect to live with your spouse at any time during the year)11.             
12.Subtract line 11 from line 10. If zero or less, enter -0-12.             
13.Enter the smaller of line 10 or line 1113.             
14.Enter one-half of line 1314.             
15.Enter the smaller of line 2 or line 1415.             
16.Multiply line 12 by 85% (.85). If line 12 is zero, enter -0-16.             
17.Add lines 15 and 1617.             
18.Multiply line 1 by 85% (.85)18.             
19. Expected taxable social security and railroad retirement benefits. Enter the smaller of line 17 or line 18. Include this amount in the total on line 1 of your 2010 Estimated Tax Worksheet (or Annualized Estimated Tax Worksheet (Worksheet 2-7))19.             
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Worksheet 2-2. 2010 Estimated Tax Worksheet—Lines 1 and 11
Estimated Self-Employment Tax and Deduction

1.a.Enter your expected income and profits subject to self-employment tax*1a.               .
 b.If you will have farm income and also receive social security retirement or disability benefits, enter your expected Conservation Reserve Program payments that will be included on Schedule F (Form 1040) or listed on Schedule K-1 (Form 1065)1b.                
2. Subtract line 1b from line 1a2.                
3. Multiply line 2 by 92.35% (.9235)3.                
4. Multiply line 3 by 2.9% (.029)4.             
5. Social security tax maximum income5. $106,800   
6. Enter your expected wages (if subject to social security tax or the
6.2% portion of tier 1 railroad retirement tax)
6.                
7. Subtract line 6 from line 57.                
   Note. If line 7 is zero or less, enter -0- on line 9 and skip to line 10.     
8. Enter the smaller of line 3 or line 78.                
9. Multiply line 8 by 12.4% (.124)9.             
10. Add line 4 and line 9. Enter the result here and on line 11 of your 2010 Estimated Tax Worksheet (or line 17 of the Annualized ES Worksheet (Worksheet 2-7))10.             
11. Multiply line 10 by 50% (.50). This is your expected deduction for one-half of your self-employment tax. Subtract this amount when figuring your expected AGI on line 1 of your 2010 Estimated Tax Worksheet (or Annualized Estimated Tax Worksheet (Worksheet 2-7))11.                
*Your net profit from self-employment is found on Schedule C, line 31; Schedule C-EZ, line 3; Schedule F, line 36; Schedule K-1 (Form 1065), box 14, code A; and Schedule K-1 (Form 1065-B), box 9, code J1.
taxmap/pubs/p505-016.htm#en_us_publink1000138362

Worksheet 2-3.  2010 Estimated Tax Worksheet—Line 2
Standard Deduction Worksheet

Caution. Do not complete this worksheet if you expect your spouse to itemize on a separate return or you expect to be
a dual-status alien.
1.Enter the amount shown below for your filing status.    
 • Single or married filing separately—$5,700    
 • Married filing jointly or Qualifying widow(er)—$11,400    
 • Head of household—$8,4001.                
2.Can you (or your spouse if filing jointly) be claimed as a dependent on someone else's return?    
  Box No. Skip line 3; enter the amount from line 1 on line 4.  
  Box Yes. Go to line 3.  
3.Is your earned income* more than $650?    
  Box Yes. Add $300 to your earned income. Enter the total.    
  Box No. Enter $9503.                
4.Enter the smaller of line 1 or line 34.             
5.Were you (or your spouse if filing jointly) born before January 2, 1946, or blind?
  Box No. Go to line 6.
  Box Yes. Check if:
   a. You were  Box Born before January 2, 1946 Box Blind
   b. Your spouse was  Box Born before January 2, 1946 Box Blind
   c. Total boxes checked in 5a and 5bbox
  Multiply $1,100 ($1,400 if single or head of household) by the number in the box on line 5c5.             
6. Standard deduction. Add lines 4 and 5. Enter the result here and on line 2 of your 2010 Estimated Tax Worksheet (or line 7 of your 2010 Annualized Estimated Tax Worksheet (Worksheet 2-7))6.             
* Earned income includes wages, salaries, tips, professional fees, and other compensation received for personal services you performed. It also includes any amount received as a scholarship that you must include in your income. Reduce it by one-half of your self-employment tax.
taxmap/pubs/p505-016.htm#w15008e06

Worksheet 2-4. 2010 Estimated Tax Worksheet—Line 6
Qualified Dividends and Capital Gain Tax Worksheet

          
1.Enter the amount from the appropriate worksheet.
  • Line 5 of your 2010 Estimated Tax Worksheet
  • Line 3 of Worksheet 2-5 (use if you will exclude or deduct foreign earned income or housing)
1.                
2.Enter your qualified dividends expected for 2010 1 2.                    
3.Enter the net capital gain expected for 2010 1 3.                    
4.Add lines 2 and 34.                  
5.Enter your 28% rate gain or loss expected for 2010 2 5.                    
6.Enter the unrecaptured section 1250 gain expected for 20106.                    
7.Add lines 5 and 67.                    
8.Enter the smaller of line 3 or line 78.                  
9.Subtract line 8 from line 49.                
10.Subtract line 9 from line 1. If zero or less, enter -0-10.                  
11.Enter the smaller of line 1 or $68,000 ($34,000 if single or married filing separately, or $45,550 if head of household)11.                    
12.Enter the smaller of line 10 or line 1112.                    
13.Subtract line 4 from line 1. If zero or less, enter -0-13.                    
14.Enter the larger of line 12 or line 1314.                
  Note. If line 11 and line 12 are the same, skip line 15 and go to line 16.    
15.Subtract line 12 from line 1115.                
  Note. If lines 1 and 11 are the same, skip lines 16 through 28 and go to line 29.  
16.Enter the smaller of line 1 or line 916.                  
17.Enter the amount from line 15. If line 15 is blank, enter -0-17.                  
18.Subtract line 17 from line 16. If zero or less, enter -0-18.                
19.Multiply line 18 by 15% (.15)19.             
  Note. If line 6 is zero or blank, skip lines 20 through 25 and go to line 26.  
20.Enter the smaller of line 3 or line 620.                  
21.Add lines 4 and 1421.                    
22.Enter the amount from line 1 above22.                    
23.Subtract line 22 from line 21. If zero or less, enter -0-23.                  
24.Subtract line 23 from line 20. If zero or less, enter -0-24.                
25.Multiply line 24 by 25% (.25)25.             
  Note. If line 5 is zero or blank, skip lines 26 through 28 and go to line 29.  
26.Add lines 14, 15, 18, and 2426.                
27.Subtract line 26 from line 127.                
28.Multiply line 27 by 28% (.28)28.             
29.Figure the tax on the amount on line 14 from the 2010 Tax Rate Schedules29.             
30.Add lines 19, 25, 28, and 2930.             
31.Figure the tax on the amount on line 1 from the 2010 Tax Rate Schedules31.             
32. Tax on all taxable income (including capital gains and qualified dividends). Enter the smaller of line 30 or
line 31 here and on line 6 of the 2010 Estimated Tax Worksheet (or line 4 of Worksheet 2-5)
32.             
1 If you expect to deduct investment interest expense, do not include on this line any qualified dividends or net capital gain that you will elect to treat as investment income.
2 This includes a section 1202 exclusion from eligible gain on qualified small business stock and gain or loss from the sale or exchange of collectibles. See the instructions for Schedule D (Form 1040) for more information.


taxmap/pubs/p505-016.htm#w15008e0216

Worksheet 2-5. 2010 Estimated Tax Worksheet—Line 6
Foreign Earned Income Tax Worksheet

Before you begin:   If line 5 of your 2010 Estimated Tax Worksheet is zero, do not complete this worksheet.
         
1.Enter the amount from line 5 of your 2010 Estimated Tax Worksheet1.             
2.Enter the total foreign earned income and housing amount you (and your spouse if filing jointly) expect to exclude or deduct in 2010 on Form 2555 or Form 2555-EZ2.             
3.Add lines 1 and 23.             
4. Tax on the amount on line 3. Use the 2010 Tax Rate Schedules or Worksheet 2-4,* as appropriate4.             
5. Tax on the amount on line 2. Use the 2010 Tax Rate Schedules5.             
6.Subtract line 5 from line 4. Enter the result here and on line 6 of your 2010 Estimated Tax Worksheet. If
zero or less, enter -0-
6.             
         
*If using Worksheet 2-4 (Qualified Dividends and Capital Gain Tax Worksheet), enter the amount from line 3 above
on line 1 of Worksheet 2-4. Complete Worksheet 2-4 through line 9. Next, determine if you have a capital gain excess.
Figuring capital gain excess. To find out if you have a capital gain excess, subtract line 5 of your 2010 Estimated Tax
Worksheet from line 9 of Worksheet 2-4. If the result is more than zero, that amount is your capital gain excess.
   No capital gain excess. If you do not have a capital gain excess, complete the rest of Worksheet 2-4 according
to its instructions. Then complete lines 5 and 6 above.
   Capital gain excess. If you have a capital gain excess, complete a second Worksheet 2-4 as instructed above
but in its entirety and with the following additional modifications. Then complete lines 5 and 6 above.
 Make these modifications only for purposes of filling out Worksheet 2-5 above.
 a. Reduce (but not below zero) the amount you otherwise would enter on line 3 of Worksheet 2-4 by your capital
gain excess.
 b. Reduce (but not below zero) the amount you otherwise would enter on line 2 of Worksheet 2-4 by any of your
capital gain excess not used in (a) above.
 c. Reduce (but not below zero) the amount you otherwise would enter on line 5 of Worksheet 2-4 by your capital
gain excess.
 d. Reduce (but not below zero) the amount you otherwise would enter on line 6 of Worksheet 2-4 by your capital
gain excess.
taxmap/pubs/p505-016.htm#en_us_publink1000139680

Worksheet 2-6.  2010 Estimated Tax Worksheet—Line 13b
Making Work Pay Credit Worksheet

Caution. You do not qualify for this credit for 2010 if someone else will be able to claim you as a dependent or if you expect to file Form 1040NR.

Note. If you are using this worksheet to estimate your making work pay credit for Worksheet 2-7 (2010 Annualized Estimated Tax Worksheet), annualize your entries for lines 1 and 6 below by multiplying the amount for each period by the annualization amount on
line 2 for the same period.
1a. Important: Check the "No" box below and see the 2009 Schedule M (Form 1040A or 1040) instructions if (a) you expect to have a net loss from a business, (b) you expect to receive a taxable scholarship or fellowship grant not reported on a Form W-2, (c) you expect your wages to include pay for work performed while an inmate in a penal institution, (d) you expect to receive a pension or annuity from a nonqualified deferred compensation plan or a nongovernmental section 457 plan, or (e) you expect to file Form 2555 or 2555-EZ.

Do you (and your spouse if filing jointly) expect to have 2010 wages of more than $6,451 ($12,903 if married filing jointly)?
boxYes. Skip lines 1a through 3. Enter $400 ($800 if married filing jointly) on line 4 and go to line 5.
boxNo. Enter your earned income*
1a.             
b. Nontaxable combat pay included on line 1a1b.                
2.  Multiply line 1a by 6.2% (.062) 2.             
3.  Enter $400 ($800 if married filing jointly) 3.             
4.  Enter the smaller of line 2 or line 3 (unless you checked "Yes" on line 1a) 4.             
5.  Enter the amount from line 1 of your 2010 Estimated Tax Worksheet 5.                
6.  Enter $75,000 ($150,000 if married filing jointly) 6.                
7.  Is the amount on line 5 more than the amount on line 6?
boxNo. Skip line 8. Enter the amount from line 4 on line 9 below.
boxYes. Subtract line 6 from line 5
7.                
8.  Multiply line 7 by 2% (.02) 8.             
9.  Subtract line 8 from line 4. If zero or less, enter -0- 9.             
10.  Do you (or your spouse, if filing jointly) expect to receive an economic recovery payment in 2010? You may receive this payment in 2010 if you did not receive it in 2009, but you did receive social security benefits, supplemental social security income, railroad retirement benefits, or veteran's disability compensation or pension benefits in November or December 2008 or January 2009?
boxNo. Enter -0- on line 10 and go to line 11.
boxYes. Enter the total of payments you (and your spouse, if filing jointly) expect to receive in 2010.
     Do not enter more than $250 ($500 if married filing jointly)
10.             
11.  Making work pay credit. Subtract line 10 from line 9. Enter the result here and include in the total on line 13b of your 2010 Estimated Tax Worksheet (or line 18 of your Annualized Estimated Tax Worksheet (Worksheet 2-7) 11.             
*Earned income includes wages, salaries, tips, professional fees, and other compensation received for personal services you performed. It also includes any amount received as a scholarship that you must include in your income and any nontaxable combat pay that you will include in your earned income for this purpose. If you will be self-employed, subtract the amount from Worksheet 2-2, line 11, to figure your earned income.
taxmap/pubs/p505-016.htm#en_us_publink1000240766

Worksheet 2-7. 2010 Annualized Estimated Tax Worksheet

Note. For instructions, see Annualized Income Installment Method beginning on page 23.

Section A (For Figuring Your Annualized Estimated Tax Payments)—Complete each column after end of period shown.
Estates and trusts: Use the following ending dates in columns (a) through (d):
2/28/2010, 4/30/2010, 7/31/2010, 11/30/2010.
(a)
1/1/10-3/31/10
(b)
1/1/10-5/31/10
(c)
1/1/10-8/31/10
(d)
1/1/10-12/31/10
 1Adjusted gross income (AGI) for each period (see instructions). Estates and trusts, enter your taxable income without your exemption for each period. Self-employed: Complete Section B first1    
 2Annualization amounts. (Estates and trusts, see instructions)2 4 2.4 1.5 1
 3Annualized income. Multiply line 1 by line 23    
 4If you itemize, enter itemized deductions for period shown in the column headings (see instructions). All others, enter -0- and skip to line 7. Exception: Estates and trusts, skip to line 9 and enter amount from line 34    
 5Annualization amounts5 4 2.4 1.5 1
 6Multiply line 4 by line 5 (see instructions)6    
 7Standard deduction from Worksheet 2-37    
 8Enter the larger of line 6 or line 78    
 9Subtract line 8 from line 39    
10In each column, multiply $3,650 by your total expected number of exemptions (see instructions). (Estates and trusts, see instructions)10    
11Subtract line 10 from line 9. If zero or less, enter -0-11    
12Figure your tax on the amount on line 11 (see instructions)12    
13For each period, enter any tax from Forms 8814, 4972, and 6251 (or the Alternative Minimum Tax Worksheet in the Form 1040A instructions). Also include any recapture of education credits (see instructions)13    
14Add lines 12 and 1314    
15Enter nonrefundable credits for each period (see instructions)15    
16Subtract line 15 from line 1416    
17Self-employment tax from line 41 of Section B17    
18Enter other taxes for each period (see instructions)18    
19Total tax. Add lines 16, 17, and 1818    
20Enter refundable credits for each period (see instructions for type of credits allowed). Do not include any income tax withholding on this line20    
21Subtract line 20 from line 19. If zero or less, enter -0-21    
22Applicable percentage22 22.5% 45% 67.5% 90%
23Multiply line 21 by line 2223    
  Complete lines 24 through 29 of one column before going to line 24 of the next column.      
24Enter the total of the amounts in all previous columns of line 2924    
25Annualized income installment. Subtract line 24 from line 23. If zero or less, enter -0-25    
26Enter 25% (.25) of line 14c of the Form 1040-ES Estimated Tax Worksheet in each column26    
27Subtract line 29 of the previous column from line 28 of that column27    
28Add lines 26 and 2728    
29Enter the smaller of line 25 or line 28 (see instructions)29    
30 Total required payments for the period. Add lines 24 and 2930    
31 Estimated tax payments made (line 32 of all previous columns) plus tax withholding through the due date for the period (see instructions)31    
32Estimated tax payment required by the next due date. Subtract line 31 from line 30 and enter the result (but not less than zero) here and on your payment voucher32    
taxmap/pubs/p505-016.htm#w15008e09a.contd

Worksheet 2-7. 2010 Annualized Estimated Worksheet (Continued)

Section B (For Figuring Your Annualized Estimated Self-Employment Tax)—Complete each column after end of period shown.
(Form 1040 filers only) (a)
1/1/10-3/31/10
(b)
1/1/10-5/31/10
(c)
1/1/10-8/31/10
(d)
1/1/10-12/31/10
33Net earnings from self-employment for the period (see instructions)33    
34Prorated social security tax limit34$26,700$44,500$71,200$106,800
35Enter actual wages for the period subject to social security tax or the 6.2% portion of the 7.65% railroad retirement (tier 1) tax.
Exception: If you file Form 4137 or Form 8919, see instructions
35    
36Subtract line 35 from line 34. If zero or less, enter -0-36    
37Annualization amounts370.4960.29760.1860.124
38Multiply line 37 by the smaller of line 33 or line 3638    
39Annualization amounts390.1160.06960.04350.029
40Multiply line 33 by line 3940    
41Add lines 38 and 40. Enter the result here and on line 17 of Section A41    
42Annualization amounts4284.832
43Deduction for one-half of self-employment tax. Divide line 41 by line 42. Enter the result here. Use this result to figure your AGI on line 143    
  
  
taxmap/pubs/p505-016.htm#en_us_publink1000139302

Worksheet 2-8. 2010 Annualized Estimated Tax Worksheet—Line 12
Qualified Dividends and Capital Gain Tax Worksheet

Note.  To figure the annualized entries for lines 2, 3, 5, and 6 below, multiply the expected amount for the period by the annualization amount on line 2 of Worksheet 2-7 for the same period.
          
1.Enter the amount from the appropriate worksheet.
  • Line 11 of your 2010 Annualized Estimated Tax Worksheet (Worksheet 2-7)
  • Line 3 of Worksheet 2-9 (use if you will exclude or deduct foreign earned income or housing)
1.                
2.Enter your annualized qualified dividends expected for 2010 1 2.                    
3.Enter the annualized net capital gain expected
for 2010 1
3.                    
4.Add lines 2 and 34.                  
5.Enter your annualized 28% rate gain or loss expected for 2010 2 5.                    
6.Enter the annualized unrecaptured section 1250 gain expected for 20106.                    
7.Add lines 5 and 67.                    
8.Enter the smaller of line 3 or line 78.                  
9.Subtract line 8 from line 49.                
10.Subtract line 9 from line 1. If zero or less, enter -0-10.                  
11.Enter the smaller of line 1 or $68,000 ($34,000 if single or married filing separately, or $45,550 if head of household)11.                    
12.Enter the smaller of line 10 or line 1112.                    
13.Subtract line 4 from line 1. If zero or less,
enter -0-

13.

      
14.Enter the larger of line 12 or line 1314.                
  Note. If line 11 and line 12 are the same, skip line 15 and go to line 16.    
15.Subtract line 12 from line 1115.                
  Note. If lines 1 and 11 are the same, skip lines 16 through 28 and go to line 29.   
16.Enter the smaller of line 1 or line 916.                  
17.Enter the amount from line 15. If line 15 is blank, enter -0-17.                  
18.Subtract line 17 from line 16. If zero or less, enter -0-18.                
19.Multiply line 18 by 15% (.15)19.             
  Note. If line 6 is zero or blank, skip lines 20 through 25 and go to line 26.  
20.Enter the smaller of line 3 or line 620.                  
21.Add lines 4 and 1421.                    
22.Enter the amount from line 1 above22.                    
23.Subtract line 22 from line 21. If zero or less, enter -0-23.                  
24.Subtract line 23 from line 20. If zero or less, enter -0-24.                
25.Multiply line 24 by 25% (.25)25.             
  Note. If line 5 is zero or blank, skip lines 26 through 28 and go to line 29.  
26.Add lines 14, 15, 18, and 2426.                
27.Subtract line 26 from line 127.                
28.Multiply line 27 by 28% (.28)28.             
29.Figure the tax on the amount on line 14 from the 2010 Tax Rate Schedules29.             
30.Add lines 19, 25, 28, and 2930.             
31.Figure the tax on the amount on line 1 from the 2010 Tax Rate Schedules31.             
32. Tax on all taxable income (including capital gains and qualified dividends). Enter the smaller of line 30 or
line 31 here and on line 12 of the appropriate column of the 2010 Annualized Estimated Tax Worksheet (or line 4 of Worksheet 2-9)
32.             
1 If you expect to deduct investment interest expense, do not include on this line any qualified dividends or net capital gain that you will elect to treat as investment income.
2 This includes a section 1202 exclusion from eligible gain on qualified small business stock and gain or loss from the sale or exchange of collectibles. See the instructions for Schedule D (Form 1040) for more information.
taxmap/pubs/p505-016.htm#w15008e13

Worksheet 2-9. 2010 Annualized Estimated Tax Worksheet—Line 12
Foreign Earned Income Tax Worksheet

Before you begin: If line 11 of Worksheet 2-7 (2010 Annualized Estimated Tax Worksheet) is zero for the period, do not complete this worksheet.
1.Enter the amount from line 11 of your 2010 Annualized Estimated Tax Worksheet for the period1.             
2.Enter the annualized amount* of foreign earned income and housing amount you (and your spouse if filing jointly) expect to exclude or deduct for the period on Form 2555 or Form 2555-EZ2.             
3.Add lines 1 and 23.             
4. Tax on the amount on line 3. Use the 2010 Tax Rate Schedules or Worksheet 2-8,** as appropriate4.             
5. Tax on the amount on line 2. Use the 2010 Tax Rate Schedules5.             
6.Subtract line 5 from line 4. Enter the result here and on line 12 of your 2010 Annualized Estimated Tax Worksheet (Worksheet 2-7). If zero or less, enter -0-6.             
         
* To figure the annualized amount for line 2, multiply the expected exclusion for the period by the annualization amount
on line 2 of Worksheet 2-7 for the same period.
**If using Worksheet 2-8 (Qualified Dividends and Capital Gain Tax Worksheet), enter the amount from line 3 above on
line 1 of Worksheet 2-8. Complete Worksheet 2-8 through line 9. Next, determine if you have a capital gain excess.
Figuring capital gain excess. To find out if you have a capital gain excess for the appropriate period, subtract line 11
of Worksheet 2-7 from line 9 of Worksheet 2-8. If the result is more than zero, that amount is your capital gain excess.
   No capital gain excess. If you do not have a capital gain excess, complete the rest of Worksheet 2-8 according to its instructions. Then complete lines 5 and 6 above.
   Capital gain excess. If you have a capital gain excess, complete a second Worksheet 2-8 as instructed above but in its entirety and with the following additional modifications. Then complete lines 5 and 6 above.
 Make these modifications only for purposes of filling out Worksheet 2-9 above.
 a. Reduce (but not below zero) the amount you otherwise would enter on line 3 of Worksheet 2-8 by your capital gain excess.
 b. Reduce (but not below zero) the amount you otherwise would enter on line 2 of Worksheet 2-8 by any of your capital gain excess not used in (a) above.
 c. Reduce (but not below zero) the amount you otherwise would enter on line 5 of Worksheet 2-8 by your capital gain excess.
 d. Reduce (but not below zero) the amount you otherwise would enter on line 6 of Worksheet 2-8 by your capital gain excess.
taxmap/pubs/p505-016.htm#en_us_publink1000145979

Worksheet 2-10. Amended Estimated Tax Worksheet

       
1.Amended total estimated tax due1.             
2.Multiply line 1 by:    
 50% (.50) if next payment is due June 15, 2010    
 75% (.75) if next payment is due September 15, 2010    
 100% (1.00) if next payment is due January 18, 20112.                
3.Estimated tax payments made for all previous periods3.                
4. Next required payment: Subtract line 3 from line 2 and enter the result (but not less than zero) here and on your payment voucher for your next required payment4.                
  Note. If the payment on line 4 is due January 18, 2011, stop here. Otherwise, go to line 5.     
5.Add lines 3 and 45.             
6.Subtract line 5 from line 1 and enter the result (but not less than zero)6.             
7. Each following required payment: If the payment on line 4 is due June 8, 2010, enter one-half of the amount on line 6 here and on the payment vouchers for your payments due September 15, 2010, and January 18, 2011. If the amount on line 4 is due September 15, 2010, enter the full amount on line 6 here and on the payment voucher for your payment due January 18, 20117.