Publication 505
taxmap/pubs/p505014.htm#en_us_publink10007394After 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.
 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 on your 2010 return, you must report half of
it on your 2011 return and the rest on your 2012 return. 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/p505014.htm#en_us_publink10007395If your first estimated tax payment is due April 17, 2012, you can figure your required payment for each period by dividing your annual estimated tax due (line 16a of the 2012 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/p505014.htm#en_us_publink10007397After 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.
 Amended estimated tax.
If you refigure your estimated tax during the year, or if your first estimated
tax payment is due after April 17, 2012, figure your required payment for each
remaining payment period using
Worksheet 29, below.

taxmap/pubs/p505014.htm#en_us_publink10007399Early in 2012, Mira Roberts figures that her estimated tax due is $1,800. She makes estimated tax payments on April 17 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 filledin
Worksheet 29.
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/p505014.htm#en_us_publink1000248759Worksheet 29. Amended Estimated Tax Worksheet—Illustrated
       1.
 Amended total estimated tax due  1.  $4,100  2.
 Multiply line 1 by:
      50% (.50) if next payment is due June 15, 2012       75% (.75) if next payment is due September 17,
2012
      100% (1.00) if next payment is due January 15,
2013
 2.  3,075    3.
 Estimated tax payments for all previous periods
 3.  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 15, 2013,
stop here. Otherwise, go to line 5.      5.
 Add lines 3 and 4
 5.  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, 2012, enter onehalf of the amount on line 6 here and on the payment vouchers for your payments due September 17, 2012, and January 15, 2013. If the amount on line 4 is due September 17, 2012, enter the full amount on line 6 here and on the payment voucher for your payment due January 15, 2013
 7.  $1,025 

taxmap/pubs/p505014.htm#en_us_publink10007400The 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/p505014.htm#en_us_publink10007401If 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 2012 Annualized Estimated Tax Worksheet
(
Worksheet 26).
 You first must complete the 2012 Estimated Tax Worksheet through line 16b.

Use the result you figure on line 32 of the 2012 Annualized Estimated Tax Worksheet to make your estimated tax payments and complete your payment
vouchers.
taxmap/pubs/p505014.htm#en_us_publink10007404  Use
Figure 2C to help you follow these instructions. See
Worksheet 26 for another worksheet available for your use. 
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 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/p505014.htm#en_us_publink10007407Enter 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, earlier.
taxmap/pubs/p505014.htm#en_us_publink1000256134If 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/p505014.htm#en_us_publink10007408If you had selfemployment 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/p505014.htm#en_us_publink10007409Be 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 (2012 Annualized Estimated Tax Worksheet
(Worksheet 26)).
taxmap/pubs/p505014.htm#en_us_publink10007410Multiply line 4 by line 5 and enter the result on line 6.
taxmap/pubs/p505014.htm#en_us_publink10007411If you will not itemize your deductions, use
Worksheet 23 to figure your standard deduction.
taxmap/pubs/p505014.htm#en_us_publink10007412Multiply $3,800 by your total expected exemptions and enter the result on line 10.
taxmap/pubs/p505014.htm#en_us_publink10007413Generally, you will use the
2012 Tax Rate Schedules
or in the instructions to Form 1040ES 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/p505014.htm#en_us_publink10007414You must use a special method to figure tax on the income of the following children who have more than $1,900 of investment
income.
 Children under age 18 at the end of 2012.
 The following children if their earned income is not more than half their
support.
 Children age 18 at the end of 2012.
 Children who are fulltime students over age 18 and under age 24 at the end of
2012.
See Publication
929.
taxmap/pubs/p505014.htm#en_us_publink10007415The 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 longterm capital gain for the year is more than your net shortterm capital
loss.
taxmap/pubs/p505014.htm#en_us_publink1000256217Generally, the maximum tax rate for qualified dividends is 15% (0% for people whose other income is taxed at the 10% or 15%
rate).
 Tax on capital gain or qualified dividends.
If the amount on line 1 includes a net capital gain or qualified dividends, use
Worksheet 27 to figure the amount to enter on line 12. 
 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 2555EZ, use
Worksheet 28 to figure the amount to enter on line 12. 
taxmap/pubs/p505014.htm#en_us_publink1000240672
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 taxfree educational assistance or a
refund of qualifying expenses for the same student after filing your 2011
return.
Use the 2011 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 2012 Annualized Estimated Tax Worksheet
(
Worksheet 26). Enter the result on line 13 of this worksheet.
taxmap/pubs/p505014.htm#en_us_publink1000210096Include all the nonrefundable credits you expect to claim because of events that will occur during the period. If you are using your 2011 return as a guide and filed Form 1040, your 2011 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 26 to figure the credit for each column.
taxmap/pubs/p505014.htm#en_us_publink10007419Enter your selfemployment tax for the period from Section B, line
41.
taxmap/pubs/p505014.htm#en_us_publink10007420Add your expected other taxes.
Other taxes include the following.
 Additional tax on early distributions from:
 An IRA or other qualified retirement plan,
 A taxsheltered annuity, or
 A modified endowment contract entered into after June 20,
1988.
 Household employment taxes if:
 You will have federal income tax withheld from wages, pensions, annuities, gambling winnings, or other income,
or
 You would be required to make estimated tax payments even if you did not include household employment taxes when figuring your estimated
tax.
 Amounts on Form 1040 written in on the line for "other taxes" (line 60 on the 2011 Form 1040). But
do not include
recapture of a federal mortgage subsidy; tax on excess golden parachute payments; lookback 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 groupterm life insurance; or additional tax on advance payments of health coverage tax credit when not
eligible.
 Repayment of the firsttime homebuyer credit if the home will cease to be your main home in 2012. See Form 5405 for
exceptions.
taxmap/pubs/p505014.htm#en_us_publink10007423Include all the refundable credits (other than withholding credits) you can claim because of events that occurred during the period. If you are using your 2011 return as a guide and filed Form 1040, include the credits on lines 64a, 65, 66, 70, and 71 (boxes c and d). If you filed Form 1040A, include the credits on lines 38a, 39, and 40. If you filed Form 1040EZ, include line
8a.
Note.
When figuring your refundable credits for each period, annualize any item of
income or deduction used to figure each credit.
taxmap/pubs/p505014.htm#en_us_publink10007424If line 28 is smaller than line 25 and you are not certain of the estimate of your 2012 tax, you can avoid a penalty by entering the amount from line 25 on line
29.
taxmap/pubs/p505014.htm#en_us_publink10007425For each period, include estimated tax payments made and any excess social security and railroad retirement tax.
Also include estimated federal income tax withholding. Onefourth 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 2012 by:
 25% (.25) for the first period,
 50% (.50) for the second period,
 75% (.75) for the third period, and
 100% (1.00) for the fourth period.
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, earlier.
taxmap/pubs/p505014.htm#en_us_publink10007427If 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.
 Skip column (a).
 On line 1, enter your income for the period that is effectively connected with a U.S. trade or
business.
 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.
 72% for column (b).
 45% for column (c).
 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.
 On line 26, enter onehalf of the amount from line 16c of the Form 1040ES (NR) 2012 Estimated Tax Worksheet in column (b), and onefourth in columns (c) and
(d).
 On lines 24 and 27, skip column (b).
 On line 31, if you do not use the actual withholding method, include onehalf of your total expected withholding in column (b) and onefourth in columns (c) and
(d).
See Publication
519 for more information.
taxmap/pubs/p505014.htm#en_us_publink10007428You do not have to pay estimated tax if your withholding in each payment period is at least as much as:
 Onefourth 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 will owe with your return under $1,000.
Figure 2C.
Annualized Income Installment Method
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):
2/29/2012, 4/30/2012, 7/31/2012, 11/30/2012.
 (a) 1/1/123/31/12
 (b) 1/1/125/31/12
 (c) 1/1/128/31/12
 (d) 1/1/1212/31/12

1  Adjusted gross income (AGI) for each period (see instructions). Estates and trusts, enter your taxable income without your exemption for each period. Selfemployed: Complete Section B first
 1     
2  Annualization amounts. (Estates and trusts, see instructions)  2  4  2.4  1.5  1 
3  Annualized income. Multiply line 1 by line 2  3     
4  If 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     
5  Annualization amounts  5  4  2.4  1.5  1 
6  Multiply line 4 by line 5 (see instructions)  6     
7  Standard deduction from Worksheet 23  7     
8  Enter the
larger
of line 6 or line 7
 8     
9  Subtract line 8 from line 3  9     
10  In each column, multiply $3,800 by your total expected number of exemptions (see instructions). (Estates and trusts, see instructions)
 10     
11  Subtract line 10 from line 9. If zero or less, enter 0  11     
12  Figure your tax on the amount on line 11 (see instructions)  12     
13  For each period, enter any tax from Forms 8814, 4972, and 6251. Also include any recapture of education credits (see
instructions)  13     
14  Add lines 12 and 13  14     
15  Enter nonrefundable credits for each period (see instructions)  15     
16  Subtract line 15 from line 14  16     
17  Selfemployment tax from line 41 of Section B  17     
18  Enter other taxes for each period (see instructions)  18    

19  Total tax. Add lines 16, 17, and 18  19     
20  Enter refundable credits for each period (see instructions for type of credits allowed).
Do not
include any income tax withholding on this line
 20     
21  Subtract line 20 from line 19. If zero or less, enter 0  21     
22  Applicable percentage  22  22.5%  45%  67.5%  90% 
23  Multiply line 21 by line 22  23     
 Complete lines 24 through 29 of one column before going to line 24 of the next
column.      
24  Enter the total of the amounts in all previous columns of line
29  24     
25  Annualized income installment. Subtract line 24 from line 23. If zero or less, enter
0  25     
26  Enter 25% (.25) of line 14c of the Form 1040ES Estimated Tax Worksheet in each
column  26     
27  Subtract line 29 of the previous column from line 28 of that
column  27     
28  Add lines 26 and 27  28     
29  Enter the
smaller of line 25 or line 28 (see instructions)
 29     
30  Total required payments for the period. Add lines 24 and
29  30     
31  Estimated tax payments made (line 32 of all previous columns) plus tax withholding through the due date for the period (see instructions)
 31     
32  Estimated 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/p505014.htm#en_us_publink1000248760Figure 2C. Annualized Income Installment Method (Continued) Worksheet 26. 2012 Annualized Estimated Tax Worksheet (Continued)
Section B (For Figuring Your Annualized Estimated SelfEmployment Tax)—Complete each column after end of period
shown.  (Form 1040 filers only)  (a) 1/1/123/31/12
 (b) 1/1/125/31/12
 (c) 1/1/128/31/12
 (d) 1/1/1212/31/12
 33  Net earnings from selfemployment for the period (see
instructions)  33      34  Prorated social security tax limit  34  $27,525  $45,875  $73,400  $110,100  35  Enter 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      36  Subtract line 35 from line 34. If zero or less, enter
0  36      37  Annualization amounts  37  0.416  0.2496  0.156  0.104  38  Multiply line 37 by the
smaller of line 33 or line 36
 38      39  Annualization amounts  39  0.116  0.0696  0.0435  0.029  40  Multiply line 33 by line 39  40      41  Add lines 38 and 40. Enter the result here and on
line 17 of Section A
 41      42  Multiply line 38 by 59.6% (.596)  42      43  Multiply line 40 by 50% (.50)  43      44  Add lines 42 and 43  44      45  Annualization amounts  45  4  2.4  1.5  1  46  Deduction for selfemployment tax. Divide line 44 by line 45. Enter the result here. Use this result to figure your AGI on line 1
 46     
