taxmap/pubs/p505-000.htm#en_us_publink10007170The federal income tax is a pay-as-you-go tax. You must pay the
tax as you earn or receive income during the year. There are two ways to pay as
you go.
- Withholding.
If you are an employee, your employer probably withholds income tax from your
pay. In addition, tax may be withheld from certain other income, such as
pensions, bonuses, commissions, and gambling winnings. The amount withheld is
paid to the Internal Revenue Service (IRS) in your name.
- Estimated tax.
If you do not pay your tax through withholding, or do not pay enough tax that
way, you might have to pay estimated tax. People who are in business for
themselves generally will have to pay their tax this way. You may have to pay
estimated tax if you receive income such as dividends, interest, capital gains,
rents, and royalties. Estimated tax is used to pay not only income tax, but
self-employment tax and alternative minimum tax as well.
This publication explains both of these methods. It also explains
how to take credit on your return for the tax that was withheld and for your
estimated tax payments.
If you did not pay enough tax during the year, either through
withholding or by making estimated tax payments, you may have to pay a penalty.
Generally, the IRS can figure this penalty for you. This underpayment penalty,
and the exceptions to it, are discussed in chapter 4.
taxmap/pubs/p505-000.htm#en_us_publink10007171
If you are a nonresident alien, see chapter 8 in Publication 519, U.S. Tax Guide
for Aliens, for a discussion of Form 1040-ES (NR) and withholding.
taxmap/pubs/p505-000.htm#en_us_publink10007172See
What's New for 2011 that begins on this page, and
What's New in chapter 4 for 2010 changes.
We welcome your comments about this publication and your suggestions
for future editions.
You can write to us at the following address:
Internal Revenue Service
Individual Forms and Publications Branch
SE:W:CAR:MP:T:I
1111 Constitution Ave. NW, IR-6526
Washington, DC 20224
We respond to many letters by telephone. Therefore, it would
be helpful if you would include your daytime phone number, including the area
code, in your correspondence.
You can email us at
*taxforms@irs.gov. (The asterisk must be included in the address.) Please put
"Publications Comment" on the subject line. You can also send us comments from
www.irs.gov/formspubs, select "Comment on Tax Forms and Publications" under "Information
about."
Although we cannot respond individually to each comment received,
we do appreciate your feedback and will consider your comments as we revise our
tax products.
taxmap/pubs/p505-000.htm#en_us_publink1000253249Visit
www.irs.gov/formspubs
to download forms and publications, call 1-800-829-3676, or write to the address
below and receive a response within 10 days after your request is received.
Internal Revenue Service
1201 N. Mitsubishi Motorway
Bloomington, IL 61705-6613If you have a tax question, check the information available on
IRS.gov or call 1-800-829-1040. We cannot answer tax questions sent to either of
the above addresses.
Recent legislation (Tax Relief, Unemployment Insurance Reauthorization,
and Job Creation Act of 2010) extended many of the tax provisions that were set
to expire in 2010. This section lists only those provisions that were changed in
addition to being extended, as well as those that were not extended. Also listed
are tax benefits with adjustments for inflation. For more information, see
IRS.gov.
taxmap/pubs/p505-000.htm#en_us_publink1000250178Income limits for excluding education savings bond interest
increased.(p2)
In order to exclude interest, your modified adjusted gross income
(MAGI) must be less than $86,100 ($136,650 if married filing jointly or
qualifying widow(er)).
taxmap/pubs/p505-000.htm#en_us_publink1000255823Foreign earned income exclusion.(p2)
The maximum exclusion has increased to $92,900.
taxmap/pubs/p505-000.htm#en_us_publink1000255824Qualified charitable distribution (QCD).(p2)
Tax-free treatment of distributions from traditional and Roth
IRAs for charitable purposes has been extended through December 31, 2011, with
the following special rule. For QCDs made during January 2011, you can elect to
have the distribution deemed to have been made on December 31, 2010. If you make
this election, the QCD will count toward your 2010 exclusion limit of $100,000,
as well as your 2010 minimum required distribution.
taxmap/pubs/p505-000.htm#en_us_publink1000240514Standard mileage rates.(p2)
The rate for business use of your vehicle is increased to 51
cents per mile. The rate for use of your vehicle to get medical care or move is
increased to 19 cents per mile. The rate of 14 cents per mile for charitable use
is unchanged.
taxmap/pubs/p505-000.htm#en_us_publink1000248606Personal exemption increased.(p2)
For tax years beginning in 2011, the personal exemption amount
is increased to $3,700.
taxmap/pubs/p505-000.htm#en_us_publink1000250181Alternative minimum tax (AMT) exemption amount increased.(p2)
The AMT exemption amount is increased to $48,450 ($74,450 if
married filing jointly or qualifying widow(er); $37,225 if married filing
separately).
taxmap/pubs/p505-000.htm#en_us_publink1000255825Lifetime learning credit income limits increased.(p2)
In order to claim a lifetime learning credit, your MAGI must
be less than $61,000 ($122,000 if married filing jointly).
taxmap/pubs/p505-000.htm#en_us_publink1000255826Retirement savings contribution credit income limits increased.(p2)
In order to claim this credit, your MAGI must be less than $28,250
($56,500 if married filing jointly; $42,375 if head of household).
taxmap/pubs/p505-000.htm#en_us_publink1000255834Nonbusiness energy property credit.(p2)
This credit has been extended for 1 year with a reduced rate
of 10%. Amounts provided by subsidized federal, state, or local energy financing
do not qualify for the credit. The energy-efficiency standards for qualified
natural gas, propane, or oil furnaces, or hot water boilers have been increased.
For 2011, the credit is limited as follows.
- A total combined credit limit of $500 for all tax years after
2005 (Form 5695, Part I).
- A combined credit limit of $200 for windows for all tax years
after 2005.
- A maximum credit for residential energy property costs of
$50 for any advanced main air circulating fan; $150 for any qualified natural
gas, propane, or oil furnace, or hot water boiler; and $300 for any item of
energy-efficient building property.
Adoption credit or exclusion.(p2)
The maximum adoption credit or exclusion for employer-provided
adoption benefits has increased to $13,360. In order to claim either the credit
or exclusion, your MAGI must be less than $225,210.
taxmap/pubs/p505-000.htm#en_us_publink1000255836Temporary decrease in employee's share of payroll tax.(p2)
Social security will be withheld from an employee’s wages
at the rate of 4.2% (down from 6.2%) up to the social security wage limit of
$106,800. There will be no change to Medicare withholding.
The same reduction applies to net earnings from self-employment—the
temporary rate will be 10.4% (down from 12.4%) up to the social security wage
limit of $106,800.
taxmap/pubs/p505-000.htm#en_us_publink1000255837Increase in additional tax on certain distributions not used
for qualified medical expenses.(p2)
The tax on distributions from health savings accounts (HSAs)
and Archer MSAs made after December 31, 2010, that are not used for qualified
medical expenses, is increased to 20%.
taxmap/pubs/p505-000.htm#en_us_publink1000248611Earned income credit (EIC).(p2)
You may be able to take the EIC in 2011 if:
- Three or more children lived with you and you earned less
than $43,998 ($49,078 if married filing jointly),
- Two children lived with you and you earned less than $40,964
($46,044 if married filing jointly),
- One child lived with you and you earned less than $36,052
($41,132 if married filing jointly), or
- A child did not live with you and you earned less than $13,660
($18,740 if married filing jointly).
Also, the maximum AGI you can have and still get the credit has
increased. You may be able to take the credit if your AGI is less than the
amount in the above list that applies to you. The maximum investment income you
can have and get the credit has increased to $3,150.
taxmap/pubs/p505-000.htm#en_us_publink1000248647Health coverage tax credit (HCTC).(p2)
Beginning after February 12, 2011, the credit has decreased to
65% (from 80%) for amounts paid for qualified health insurance coverage for you,
your spouse, and other qualifying family members.
The following benefits are scheduled to expire or have been repealed
and will not be available for 2011.
- Making work pay credit.
- Self-employed health insurance deduction when figuring self-employment
tax.
- Exclusion from income of benefits provided to volunteer firefighters
and emergency medical responders.
- Computer technology and equipment allowed as qualified higher
education expenses for qualified tuition programs (section 529 plans).
- Exemption from alternative minimum tax treatment for certain
tax-exempt bonds.
- Advance earned income credit.
Roth IRAs.(p3)
If you rolled over or converted part or all of another retirement
plan to a Roth IRA in 2010, or made an in-plan rollover to a designated Roth
account after September 27, 2010, and did not elect to include all of the
resulting taxable amount in income for 2010, you must report half of that
taxable amount on your 2011 return and the other half on your 2012 return. See
the Instructions for Form 8606 for more information.
taxmap/pubs/p505-000.htm#en_us_publink10007177Social security (FICA) tax.(p3)
Generally, each employer for whom you work during the tax year must withhold
social security tax up to the annual limit. The annual limit is $106,800 in
2011.
taxmap/pubs/p505-000.htm#en_us_publink10007178Photographs of missing children.(p3)
The Internal Revenue Service is a proud partner with the National
Center for Missing and Exploited Children. Photographs of missing children
selected by the Center may appear in this publication on pages that otherwise
would be blank. You can help bring these children home by looking at the
photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a
child.
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