Publication 17
taxmap/pub17/p17-020.htm#en_us_publink100032382Estimated tax is the method used to pay tax on income that is
not subject to withholding. This includes income from self-employment, interest,
dividends, alimony, rent, gains from the sale of assets, prizes, and awards. You
also may have to pay estimated tax if the amount of income tax being withheld
from your salary, pension, or other income is not enough.
Estimated tax is used to pay both income tax and self-employment
tax, as well as other taxes and amounts reported on your tax return. If you do
not pay enough tax, either through withholding or estimated tax, or a
combination of both, you may have to pay a penalty. If you do not pay enough by
the due date of each payment period (see
When To Pay Estimated Tax, later), you may be charged a penalty even if you are due a
refund when you file your tax return. For information on when the penalty
applies, see
Underpayment Penalty for 2010 at the end of this chapter.
If you receive salaries or wages, you can avoid having to pay estimated tax by
asking your employer to take more tax out of your earnings. To do this, give a
new Form W-4 to your employer. See chapter 1 of Publication 505.
taxmap/pub17/p17-020.htm#en_us_publink100032384You do not have to pay estimated tax for 2011 if you meet all
three of the following conditions.
- You had no tax liability for 2010.
- You were a U.S. citizen or resident for the whole year.
- Your 2010 tax year covered a 12-month period.
You had no tax liability for 2010 if your total tax was zero
or you did not have to file an income tax return. For the definition of "total
tax," see
Total tax for 2010—line 14b in Publication 505, chapter 2.
taxmap/pub17/p17-020.htm#en_us_publink100032385If you owe additional tax for 2010, you may have to pay estimated
tax for 2011.
You can use the following general rule as a guide during the
year to see if you will have enough withholding, or if you should increase your
withholding or make estimated tax payments.
taxmap/pub17/p17-020.htm#en_us_publink100032386In most cases, you must pay estimated tax for 2011 if both of
the following apply.
- You expect to owe at least $1,000 in tax for 2011, after subtracting
your withholding and refundable credits.
- You expect your withholding plus your refundable credits to
be less than the smaller of:
- 90% of the tax to be shown on your 2011 tax return, or
- 100% of the tax shown on the your 2010 tax return (but see
Special rules for farmers, fishermen, and higher income
taxpayers below). Your 2010 tax return must cover all 12 months.
 | If the result from using the general rule above suggests
that you will not have enough withholding, complete the 2011 Estimated Tax
Worksheet in the instructions to Form 1040-ES for a more accurate calculation. |
taxmap/pub17/p17-020.htm#en_us_publink100032387If at least two-thirds of your gross income for 2010 or 2011
is from farming or fishing, substitute 66
2/
3% for 90% in (2a) under the
General rule,
earlier. If your AGI for 2010 was more than $150,000 ($75,000 if your filing
status for 2011 is married filing a separate return), substitute 110% for 100%
in (2b) under
General rule, earlier. See
Figure 4-A above, and Publication 505, chapter 2 for more information.
Resident and nonresident aliens also may have to pay estimated tax. Resident
aliens should follow the rules in this chapter unless noted otherwise.
Nonresident aliens should get Form 1040-ES (NR), U.S. Estimated Tax for
Nonresident Alien Individuals.
You are an alien if you are not a citizen or national of the
United States. You are a resident alien if you either have a green card or meet
the substantial presence test. For more information about the substantial
presence test, see Publication 519, U.S. Tax Guide for Aliens.
taxmap/pub17/p17-020.htm#en_us_publink100032389If you qualify to make joint estimated tax payments, apply the
rules discussed here to your joint estimated income.
You and your spouse can make joint estimated tax payments even
if you are not living together.
However, you and your spouse cannot make joint estimated tax
payments if:
- You are legally separated under a decree of divorce or separate
maintenance,
- You and your spouse have different tax years, or
- Either spouse is a nonresident alien (unless that spouse elected
to be treated as a resident alien for tax purposes (see chapter 1 of Publication
519)).
If you do not qualify to make joint estimated tax payments, apply
these rules to your separate estimated income. Making joint or separate
estimated tax payments will not affect your choice of filing a joint tax return
or separate returns for 2011.
taxmap/pub17/p17-020.htm#en_us_publink100032390If you plan to file a joint return with your spouse for 2011,
but you filed separate returns for 2010, your 2010 tax is the total of the tax
shown on your separate returns. You filed a separate return if you filed as
single, head of household, or married filing separately.
taxmap/pub17/p17-020.htm#en_us_publink100032391If you plan to file a separate return for 2011 but you filed
a joint return for 2010, your 2010 tax is your share of the tax on the joint
return. You file a separate return if you file as single, head of household, or
married filing separately.
To figure your share of the tax on the joint return, first figure
the tax both you and your spouse would have paid had you filed separate returns
for 2010 using the same filing status as for 2011. Then multiply the tax on the
joint return by the following fraction.
taxmap/pub17/p17-020.htm#id2010_id2010_w10311g12 | | | The tax you would have paid had you filed a separate
return | | | The total tax you and your spouse would have paid had
you filed separate returns |
|
Joe and Heather filed a joint return for 2010 showing taxable
income of $48,500 and a tax of $6,441. Of the $48,500 taxable income, $40,100
was Joe's and the rest was Heather's. For 2011, they plan to file married filing
separately. Joe figures his share of the tax on the 2010 joint return as
follows.
| | Tax on $40,100 based on a separate return | $6,213 | |
| | Tax on $8,400 based on a separate return | 845 | |
| | Total | $ 7,058 | |
| | Joe's percentage of total ($6,213 ÷ $7,058) | 88.03% | |
| | Joe's share of tax on joint return
($6,441 × 88.03%)
| $ 5,670 | |
To figure your estimated tax, you must figure your expected adjusted gross
income (AGI), taxable income, taxes, deductions, and credits for the year.
When figuring your 2011 estimated tax, it may be helpful to use
your income, deductions, and credits for 2010 as a starting point. Use your 2010
federal tax return as a guide. You can use Form 1040-ES to figure your estimated
tax. Nonresident aliens use Form 1040-ES (NR) to figure estimated tax (see
chapter 8 of Publication 519 for more information).
You must make adjustments both for changes in your own situation
and for recent changes in the tax law. For 2011, there are several changes in
the law. For a discussion of these changes, visit IRS.gov.
Form 1040-ES includes a worksheet to help you figure your estimated
tax. Keep the worksheet for your records.
For more complete information and examples of how to figure your
estimated tax for 2011, see chapter 2 of Publication 505.
taxmap/pub17/p17-020.htm#en_us_publink100032395For estimated tax purposes, the tax year is divided into four
payment periods. Each period has a specific payment due date. If you do not pay
enough tax by the due date of each payment period, you may be charged a penalty
even if you are due a refund when you file your income tax return. The payment
periods and due dates for estimated tax payments are shown next.
| | For the period: |
Due date: | |
| | Jan. 1 – March 31 | April 18, 2011* | |
| | April 1 – May 31 | June 15, 2011 | |
| | June 1 – August 31 | Sept. 15, 2011 | |
| | Sept. 1– Dec. 31 | Jan. 17, 2012*, **
| |
If the due date for an estimated tax payment falls on a Saturday,
Sunday, or legal holiday, the payment will be on time if you make it on the next
day that is not a Saturday, Sunday, or legal holiday.
In 2011, April 15 is Friday and a holiday in the District of
Columbia; therefore, the payment is due Monday, April 18th. In 2012, January 15
is a Sunday and Monday is a holiday. The January 15 payment is due by January
17, 2012.
taxmap/pub17/p17-020.htm#en_us_publink100032397If you file your 2011 Form 1040 or Form 1040A by January 31,
2012, and pay the rest of the tax you owe, you do not need to make the payment
due on January 17, 2012.
taxmap/pub17/p17-020.htm#en_us_publink100032398If your tax year does not start on January 1, see the Form 1040-ES
instructions for your payment due dates.
taxmap/pub17/p17-020.htm#en_us_publink100032399You do not have to make estimated tax payments until you have
income on which you will owe the tax. If you have income subject to estimated
tax during the first payment period, you must make your first payment by the due
date for the first payment period. You can pay all your estimated tax at that
time, or you can pay it in installments. If you choose to pay in installments,
make your first payment by the due date for the first payment period. Make your
remaining installment payments by the due dates for the later periods.
taxmap/pub17/p17-020.htm#en_us_publink100032400
If you do not have income subject to estimated tax until a later payment period,
you must make your first payment by the due date for that period. You can pay
your entire estimated tax by the due date for that period or you can pay it in
installments by the due date for that period and the due dates for the remaining
periods. The following chart shows when to make installment payments.
| If you first have income on which you must pay estimated
tax:
| Make a
payment
by:* | Make later
installments
by:* |
| Before April 1 | April 15 | June 15
Sept. 15
Jan. 15 next year
|
| April 1–May 31 | June 15 | Sept. 15
Jan. 15 next year
|
| June 1–Aug. 31 | Sept. 15 | Jan. 15 next year |
| After Aug. 31 | Jan. 15
next year
| (None) |
To determine how much you should pay by each payment due date,
see
How To Figure Each Payment, next.
taxmap/pub17/p17-020.htm#en_us_publink100032402You should pay enough estimated tax by the due date of each payment
period to avoid a penalty for that period. You can figure your required payment
for each period by using either the regular installment method or the annualized
income installment method. These methods are described in chapter 2 of
Publication 505. If you do not pay enough during each payment period, you may be
charged a penalty even if you are due a refund when you file your tax return.
taxmap/pub17/p17-020.htm#en_us_publink100032403Under the regular installment method, if your estimated tax payment
for any period is less than one-fourth of your estimated tax, you may be charged
a penalty for underpayment of estimated tax for that period when you file your
tax return. Under the annualized income installment method, your estimated tax
payments vary with your income, but the amount required must be paid each
period. See chapter 4 of Publication 505 for more information.
taxmap/pub17/p17-020.htm#en_us_publink100032404After you make an estimated tax payment, changes in your income,
adjustments, deductions, credits, or exemptions may make it necessary for you to
refigure your estimated tax. Pay the unpaid balance of your amended estimated
tax by the next payment due date after the change or in installments by that
date and the due dates for the remaining payment periods.
taxmap/pub17/p17-020.htm#en_us_publink100032405You 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 owe with your return under $1,000.
There are five ways to pay estimated tax.
- Credit an overpayment on your 2010 return to your 2011 estimated
tax.
- Send in your payment (check or money order) with a payment
voucher from Form 1040-ES.
- Pay electronically using the Electronic Federal Tax Payment
System (EFTPS).
- Pay by electronic funds withdrawal if you are filing Form
1040 or Form 1040A electronically.
- Pay by credit or debit card using a pay-by-phone system or
the Internet.
If you show an overpayment of tax after completing your Form
1040 or Form 1040A for 2010, you can apply part or all of it to your estimated
tax for 2011. On line 75 of Form 1040, or line 47 of Form 1040A, enter the
amount you want credited to your estimated tax rather than refunded. Take the
amount you have credited into account when figuring your estimated tax payments.
You cannot have any of the amount you credited to your estimated
tax refunded to you until you file your tax return for the following year. You
also cannot use that overpayment in any other way.
taxmap/pub17/p17-020.htm#en_us_publink100032408Each payment of estimated tax by check or money order must be
accompanied by a payment voucher from Form 1040-ES. If you made estimated tax
payments last year and did not use a paid preparer to file your return, you
should receive a copy of the 2011 Form 1040-ES in the mail. It will contain
payment vouchers preprinted with your name, address, and social security number.
Using the preprinted vouchers will speed processing, reduce the chance of error,
and help save processing costs.
Use the window envelopes that came with your Form 1040-ES package.
If you use your own envelopes, make sure you mail your payment vouchers to the
address shown in the Form 1040-ES instructions for the place where you live.
If you did not pay estimated tax last year, you can order Form 1040-ES from the
IRS (see inside back cover of this publication) or download it from IRS.gov.
Follow the instructions in the package to make sure you use the vouchers
correctly.
| Do not use the address shown in the Form 1040 or Form 1040A
instructions. |
If you file a joint return and are making joint estimated tax
payments, enter the names and social security numbers on the payment voucher in
the same order as they will appear on the joint return.
taxmap/pub17/p17-020.htm#en_us_publink100032410You must notify the IRS if you are making estimated tax payments
and you changed your address during the year. Send a clear and concise written
statement to the Internal Revenue Service Center where you filed your last
return and provide all of the following.
- Your full name (and spouse's full name).
- Your signature (and spouse's signature).
- Your old address (and spouse's old address if different).
- Your new address.
- Your social security number (and spouse's social security
number).
You can use Form 8822, Change of Address, for this purpose.
If you want to make estimated payments by using EFTPS, by electronic
funds withdrawal, or by credit or debit card, go to
www.irs.gov/e-pay.
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