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IRS.gov Website
Publication 505
taxmap/pubs/p505-014.htm#en_us_publink10007394

How To Figure 
Each Payment(p22)

rule
After you have figured your total estimated tax, figure how much you must pay by the due date of each payment period. You should pay enough by each due date to avoid a penalty for that period. If you do not pay enough during any payment period, you may be charged a penalty even if you are due a refund when you file your tax return. The penalty is discussed in chapter 4.
EIC
2010 rollovers or conversions to a Roth IRA or account. If you did not elect to include the taxable amount of your 2010 rollover or conversion to a Roth IRA or account in your 2010 income, you must report half the income in 2011 and half in 2012. For estimated tax purposes, the income from the 2010 rollover or conversion that you must report in 2011 and 2012 will be treated as having been received in an equal amount for each quarter of 2011 and 2012.
taxmap/pubs/p505-014.htm#en_us_publink10007395

Regular Installment Method(p22)

rule
If your first estimated tax payment is due April 18, 2011, you can figure your required payment for each period by dividing your annual estimated tax due (line 16a of the 2011 Estimated Tax Worksheet) by 4. Enter this amount on line 17. However, use this method only if your income is basically the same throughout the year.
taxmap/pubs/p505-014.htm#en_us_publink10007397

Change in estimated tax.(p22)

rule
After 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.
If you do not receive your income evenly throughout the year, your required estimated tax payments may not be the same for each period. See Annualized Income Installment Method on this page.
Pencil
Amended estimated tax. If you refigure your estimated tax during the year, or if your first estimated tax payment is due after April 18, 2011, figure your required payment for each remaining payment period using Worksheet 2-9 on page 43.
taxmap/pubs/p505-014.htm#en_us_publink10007399

Example.(p23)

Early in 2011, Mira Roberts figures that her estimated tax due is $1,800. She makes estimated tax payments on April 18 and June 15 of $450 each ($1,800 ÷ 4).
On July 10, she sells investment property at a gain. Her refigured estimated tax is $4,100. Her required estimated tax payment for the third payment period is $2,175, as shown in her filled-in Worksheet 2-9 below.
If Mira's estimated tax does not change again, her required estimated tax payment for the fourth payment period will be $1,025. taxmap/pubs/p505-014.htm#en_us_publink1000248759

Worksheet 2-9. Amended Estimated Tax Worksheet—Illustrated

       
1.Amended total estimated tax due1.$4,100 
2.Multiply line 1 by:    
 50% (.50) if next payment is due June 15, 2011    
 75% (.75) if next payment is due September 15,
 2011
    
 100% (1.00) if next payment is due January 17,
 2012
2.3,075   
3.Estimated tax payments for all previous periods3.900   
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 payment 4.$2,175   
 Note. If the payment on line 4 is due January 17, 2012, stop here. Otherwise, go to line 5.    
5.Add lines 3 and 45.3,075 
6.Subtract line 5 from line 1 and enter the result (but not less than zero)6.1,025 
7.Each following required payment: If the payment on line 4 is due June 15, 2011, enter one-half of the amount on line 6 here and on the payment vouchers for your payments due September 15, 2011, and January 17, 2012. If the amount on line 4 is due September 15, 2011, enter the full amount on line 6 here and on the payment voucher for your payment due January 17, 2012 7.$1,025 
taxmap/pubs/p505-014.htm#en_us_publink10007400
Underpayment penalty.(p23)
The penalty is figured separately for each payment period. If you figure your payments using the regular installment method and later refigure your payments because of an increase in income, you may be charged a penalty for underpayment of estimated tax for the period(s) before you changed your payments. To see how you may be able to avoid or reduce this penalty, see Annualized Income Installment Method (Schedule AI) in chapter 4.
taxmap/pubs/p505-014.htm#en_us_publink10007401

Annualized Income Installment Method(p23)

rule
If you do not receive your income evenly throughout the year (for example, your income from a repair shop you operate is much larger in the summer than it is during the rest of the year), your required estimated tax payment for one or more periods may be less than the amount figured using the regular installment method.
The annualized income installment method annualizes your tax at the end of each period based on a reasonable estimate of your income, deductions, and other items relating to events that occurred from the beginning of the tax year through the end of the period. To see whether you can pay less for any period, complete the 2011 Annualized Estimated Tax Worksheet ( Worksheet 2-6) beginning on page 40.
EIC
You first must complete the 2011 Estimated Tax Worksheet through line 16b. (See page 33 for a blank worksheet.)
Use the result you figure on line 32 of the 2011 Annualized Estimated Tax Worksheet to make your estimated tax payments and complete your payment vouchers.
See Example 2, beginning on page 28 to see how the worksheet is completed.
Note.If you use the annualized income installment method to figure your estimated tax payments, you must file Form 2210 with your 2011 tax return. See Annualized Income Installment Method (Schedule AI) in chapter 4 for more information.
taxmap/pubs/p505-014.htm#en_us_publink10007404

Instructions for the 2011 Annualized Estimated Tax Worksheet (Worksheet 2-6)(p23)

rule
Deposit
Use Figure 2-C, beginning on page 25, to help you follow these instructions. Another worksheet is available for your use on pages 40 and 41.
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 25) 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.
taxmap/pubs/p505-014.htm#en_us_publink10007407

Line 1.(p23)

rule
Enter your AGI for the period. This is your gross income for the period, including your share of partnership or S corporation income or loss, minus your adjustments to income for that period. See Expected AGI—Line 1 on page 19.
taxmap/pubs/p505-014.htm#en_us_publink1000256134
2010 rollovers or conversions to Roth IRA or account.(p23)
If you elected to report half the income in 2011 and half in 2012, treat that income as received in an equal amount for each quarter.
taxmap/pubs/p505-014.htm#en_us_publink10007408
Self-employment income.(p23)
If you had self-employment income, first complete Section B of this worksheet. Use the amounts on line 46 when figuring your expected AGI to enter in each column of Section A, line 1.
taxmap/pubs/p505-014.htm#en_us_publink10007409

Line 4.(p23)

rule
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 (2011 Annualized Estimated Tax Worksheet (Worksheet 2-6)).
taxmap/pubs/p505-014.htm#en_us_publink10007410

Line 6.(p23)

rule
Multiply line 4 by line 5 and enter the result on line 6.
taxmap/pubs/p505-014.htm#en_us_publink10007411

Line 7.(p23)

rule
If you will not itemize your deductions, use Worksheet 2-3 (see page 37) to figure your standard deduction.
taxmap/pubs/p505-014.htm#en_us_publink10007412

Line 10.(p23)

rule
Multiply $3,700 by your total expected exemptions and enter the result on line 10.
taxmap/pubs/p505-014.htm#en_us_publink10007413

Line 12.(p23)

rule
Generally, you will use the 2011 Tax Rate Schedules on page 34 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
Tax on child's investment income.(p23)
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.
  1. Children under age 18 at the end of 2011.
  2. The following children if their earned income is not more than half their support.
    1. Children age 18 at the end of 2011.
    2. Children who are full-time students over age 18 and under age 24 at the end of 2011.
See Publication 929.
taxmap/pubs/p505-014.htm#en_us_publink10007415
Tax on net capital gain.(p23)
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_publink1000256217
Tax on qualified dividends.(p23)
Generally, the maximum tax rate for qualified dividends is 15% (0% for people whose other income is taxed at the 10% or 15% rate).
Pencil
Tax on capital gain or qualified dividends. If the amount on line 1 includes a net capital gain or qualified dividends, use Worksheet 2-7 on page 42 to figure the amount to enter on line 12.
Pencil
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 2-8 on page 43 to figure the amount to enter on line 12.
taxmap/pubs/p505-014.htm#en_us_publink1000240672

Line 13.(p24)

rule
If you file Form 1040, add the tax from Forms 8814, 4972, and 6251 for the period. If you file Form 1040A, add the amount from the Alternative Minimum Tax Worksheet found in the instructions. Also include any recapture of an education credit for each period. You may owe this tax if you claimed an education credit in an earlier year and you received either tax-free educational assistance or a refund of qualifying expenses for the same student after filing your 2010 return.
Use the 2010 forms or worksheets to see if you will owe any of the taxes discussed above. Figure the tax 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 2011 Annualized Estimated Tax Worksheet ( Worksheet 2-6). Enter the result on line 13 of this worksheet.
taxmap/pubs/p505-014.htm#en_us_publink1000210096

Line 15.(p24)

rule
Include all the nonrefundable credits you expect to claim because of events that will occur during the period. If you are using your 2010 return as a guide and filed Form 1040, your 2010 credits were entered on lines 47 through 53. If you filed Form 1040A, your credits were on lines 29 through 33.
Note. When figuring your credits for each period, annualize any item of income or deduction to figure each credit. For example, if you need to use your AGI to figure a credit, use line 3 of Worksheet 2-6 to figure the credit for each column.
taxmap/pubs/p505-014.htm#en_us_publink10007419

Line 17.(p24)

rule
Enter your self-employment tax for the period from Section B, line 41.
taxmap/pubs/p505-014.htm#en_us_publink10007420

Line 18.(p24)

rule
Add your expected other taxes.
Other taxes include the following.
  1. Additional tax on early distributions from:
    1. An IRA or other qualified retirement plan,
    2. A tax-sheltered annuity, or
    3. A modified endowment contract entered into after June 20, 1988.
  2. Household employment taxes if:
    1. You will have federal income tax withheld from wages, pensions, annuities, gambling winnings, or other income, or
    2. You would be required to make estimated tax payments even if you did not include household employment taxes when figuring your estimated tax.
  3. Amounts on Form 1040 written in on the line for "total tax" (line 60 on the 2010 Form 1040). But do not include recapture of a federal mortgage subsidy; tax on excess 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; uncollected social security, Medicare, or RRTA tax on tips or group-term life insurance; or additional tax on advance payments of health coverage tax credit when not eligible.
  4. Repayment of the first-time homebuyer credit if the home will cease to be your main home in 2011. See Form 5405 for exceptions.
taxmap/pubs/p505-014.htm#en_us_publink10007423

Line 20.(p24)

rule
Include all the refundable credits (other than withholding credits) you can claim because of events that occurred during the period. If you are using your 2010 return as a guide and filed Form 1040, include the credits on lines 64a, 65, 66, 67, 70 (boxes b, c, and d), and 71. If you filed Form 1040A, include the credits on lines 41a, 42, and 43. If you filed Form 1040EZ, include line 9a.
Note. When figuring your refundable credits for each period, annualize any item of income or deduction used to figure each credit.
taxmap/pubs/p505-014.htm#en_us_publink10007424

Line 29.(p24)

rule
If line 28 is smaller than line 25 and you are not certain of the estimate of your 2011 tax, you can avoid a penalty by entering the amount from line 25 on line 29.
taxmap/pubs/p505-014.htm#en_us_publink10007425

Line 31.(p24)

rule
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 31 for each period, multiply your total expected withholding for 2011 by:
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 22.
taxmap/pubs/p505-014.htm#en_us_publink10007427

Nonresident aliens.(p24)

rule
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.
  1. Skip column (a).
  2. On line 1, enter your income for the period that is effectively connected with a U.S. trade or business.
  3. On line 21, 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.
    1. 72% for column (b).
    2. 45% for column (c).
    3. 30% for column (d).
    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.
  4. On line 26, enter one-half of the amount from line 16c of the Form 1040-ES (NR) 2011 Estimated Tax Worksheet in column (b), and one-fourth in columns (c) and (d).
  5. On lines 24 and 27, skip column (b).
  6. On line 31, 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.
taxmap/pubs/p505-014.htm#en_us_publink10007428

Estimated Tax  
Payments Not Required(p24)

rule
You do not have to pay estimated tax if your withholding in each payment period is at least as much as: 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.

Figure 2-C.  Annualized Income Installment Method


Worksheet 2-6. 2011 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):
2/28/2011, 4/30/2011, 7/31/2011, 11/30/2011.
(a)
1/1/11-3/31/11
(b)
1/1/11-5/31/11
(c)
1/1/11-8/31/11
(d)
1/1/11-12/31/11
 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 first 1    
 2Annualization amounts. (Estates and trusts, see instructions)242.41.51
 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 3
4    
 5Annualization amounts542.41.51
 6Multiply line 4 by line 5 (see instructions)6    
 7Standard deduction from Worksheet 2-37    
 8Enter the larger of line 6 or line 7 8    
 9Subtract line 8 from line 39    
10In each column, multiply $3,700 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. 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 1819    
20Enter refundable credits for each period (see instructions for type of credits allowed). Do not include any income tax withholding on this line 20    
21Subtract line 20 from line 19. If zero or less, enter -0-21    
22Applicable percentage2222.5%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    
29 Enter the smaller of line 25 or line 28 (see instructions) 29    
30 Total required payments for the period. Add lines 24 and 2930    
31Estimated 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 voucher 32    
taxmap/pubs/p505-014.htm#en_us_publink1000248760

Figure 2-C.  Annualized Income Installment Method(Continued)


Worksheet 2-6. 2011 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)
1/1/11-3/31/11
(b)
1/1/11-5/31/11
(c)
1/1/11-8/31/11
(d)
1/1/11-12/31/11
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 4.2% portion of tier 1 railroad retirement 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 amounts370.4160.24960.1560.104
38Multiply line 37 by the smaller of line 33 or line 36 38    
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 A
41    
42Multiply line 38 by 59.6% (.596)42    
43Multiply line 40 by 50% (.50)43    
44Add lines 42 and 4344    
45Annualization amounts4542.41.51
46Deduction for self-employment tax. Divide line 44 by line 45. Enter the result here. Use this result to figure your AGI on line 1 46