skip navigation

Search Help
Navigation Help

Topic Index
ABCDEFGHI
JKLMNOPQR
STUVWXYZ#

Affordable Care Act
Tax Topic Index

International
Tax Topic Index

FAQs
Forms
Publications
Tax Topics

Comments
About Tax Map

IRS.gov Website
taxmap/pubs/p505-000.htm#en_us_publink1000194307
Publication 505

Tax  
Withholding  
and Estimated  
Tax

rule

taxmap/pubs/p505-000.htm#en_us_publink1000194308Introduction

The 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. 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_publink1000194309
Nonresident aliens.(p2)
Before completing Form W-4, nonresident alien employees should see the Instructions for Form 8233, Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual. Also see chapter 8 of Publication 519, U.S. Tax Guide for Aliens, for important information on withholding.
taxmap/pubs/p505-000.htm#en_us_publink1000194310

What's new for 2012 and 2013.(p2)

rule
See What's New for 2013 in this Introduction, and What's New for 2012 in chapter 4.
taxmap/pubs/p505-000.htm#en_us_publink1000194312

Comments and suggestions.(p2)

rule
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 and Specialty 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. 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 "More Information."
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_publink1000194313
Ordering forms and publications.(p2)
Visit www.irs.gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (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 61705-6613


taxmap/pubs/p505-000.htm#en_us_publink1000194314
Tax questions.(p2)
If 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.

What's New for 2013(p2)


Use your 2012 tax return as a guide in figuring your 2013 estimated tax, but be sure to consider the following.
taxmap/pubs/p505-000.htm#en_us_publink1000194316
Additional Medicare Tax.(p2)
For tax years beginning after December 31, 2012, a 0.9% Additional Medicare Tax applies to Medicare wages, Railroad Retirement Tax Act compensation, and self-employment income over a threshold amount based on your filing status. You may need to include this amount when figuring your estimated tax. See the instructions for line 12 of the 2013 Estimated Tax Worksheet. For more information on Additional Medicare Tax, go to IRS.gov and enter "Additional Medicare Tax" in the search box.
taxmap/pubs/p505-000.htm#en_us_publink1000194317
Net Investment Income Tax.(p2)
For tax years beginning after December 31, 2012, you may be subject to Net Investment Income Tax (NIIT). NIIT is a 3.8% tax on the lesser of net investment income or the excess of your modified adjusted gross income (MAGI) over the threshold amount. NIIT may need to be included when figuring estimated tax. See the instructions for line 12 of the 2013 Estimated Tax Worksheet. For more information on NIIT, go to IRS.gov and enter "Net Investment Income Tax" in the search box.
taxmap/pubs/p505-000.htm#en_us_publink1000194318
Medical and dental expenses.(p2)
Beginning January 1, 2013, you can deduct only the part of your medical and dental expenses that exceed 10% of your adjusted gross income (7.5% if either you or your spouse is age 65 or older).
taxmap/pubs/p505-000.htm#en_us_publink1000194319
Income limits for excluding education savings bond interest increased.(p2)
In order to exclude interest, your modified adjusted gross income (MAGI) must be less than $87,700 ($142,050 if married filing jointly or qualifying widow(er)).
taxmap/pubs/p505-000.htm#en_us_publink1000194320
Foreign earned income exclusion.(p2)
The maximum exclusion has increased to $97,600.
taxmap/pubs/p505-000.htm#en_us_publink1000194321
Standard mileage rates.(p2)
The rate for business use of your vehicle is increased to 561/2 cents per mile. The rate for use of your vehicle to get medical care or move is increased to 24 cents per mile. The rate of 14 cents per mile for charitable use is unchanged.
taxmap/pubs/p505-000.htm#en_us_publink1000194322
Personal exemption increased for certain taxpayers.(p2)
For tax years beginning in 2013, the personal exemption amount is increased to $3,900 for taxpayers with adjusted gross income at or below $300,000 if married filing jointly or qualifying widow(er), $275,000 if head of household, $250,000 if single, and $150,000 if married filing separately. The personal exemption amount for taxpayers with adjusted gross income above these thresholds may be reduced.
taxmap/pubs/p505-000.htm#en_us_publink1000194323
Limitation on itemized deductions.(p2)
Beginning in 2013, itemized deductions for taxpayers with adjusted gross income above $300,000 if married filing jointly or qualifying widow(er), $275,000 if head of household, $250,000 if single, and $150,000 if married filing separately may be reduced.
taxmap/pubs/p505-000.htm#en_us_publink1000194324
Alternative minimum tax (AMT) exemption amount increased.(p2)
The AMT exemption amount is increased to $51,900 ($80,800 if married filing jointly or qualifying widow(er); $40,400 if married filing separately).
taxmap/pubs/p505-000.htm#en_us_publink1000194325
Lifetime learning credit income limits.(p2)
In order to claim a lifetime learning credit, your MAGI must be less than $63,000 ($127,000 if married filing jointly).
taxmap/pubs/p505-000.htm#en_us_publink1000194326
Retirement savings contribution credit income limits increased.(p2)
In order to claim this credit, your MAGI must be less than $29,500 ($59,000 if married filing jointly; $44,250 if head of household).
taxmap/pubs/p505-000.htm#en_us_publink1000194327
Tax-free distributions from an IRA for charitable purposes.(p2)
You can elect to treat a qualified charitable distribution (QCD) made in January 2013 as if it was made in 2012. Additionally, any portion of a distribution from an IRA contributed to a charity before February 1, 2013, can be treated as a QCD for 2012 if it meets certain requirements. See Publication 590, Individual Retirement Arrangements (IRAs), for more information.
taxmap/pubs/p505-000.htm#en_us_publink1000194328
Adoption credit or exclusion.(p2)
The maximum adoption credit or exclusion for employer-provided adoption benefits has increased to $12,970. In order to claim either the credit or exclusion, your MAGI must be less than $234,580.
taxmap/pubs/p505-000.htm#en_us_publink1000194329
Increase in employee's share of payroll tax.(p2)
Social security will be withheld from an employee’s wages at the rate of 6.2% (up from 4.2%) up to the social security wage limit of $113,700. There is no change to Medicare withholding.
The same increase applies to net earnings from self-employment—the rate will be 12.4% (up from 10.4%) up to the social security wage limit of $113,700. In addition, the deduction for self-employment tax has been restored to 50%.
taxmap/pubs/p505-000.htm#en_us_publink1000194330
Earned income credit (EIC).(p2)
You may be able to take the EIC in 2013 if:
  • Three or more children lived with you and you earned less than $46,227 ($51,567 if married filing jointly),
  • Two children lived with you and you earned less than $43,038 ($48,378 if married filing jointly),
  • One child lived with you and you earned less than $37,870 ($43,210 if married filing jointly), or
  • A child did not live with you and you earned less than $14,340 ($19,680 if married filing jointly).
Also, the maximum MAGI you can have and still get the credit has increased. You may be able to take the credit if your MAGI 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 $3,300.

Reminders(p2)


taxmap/pubs/p505-000.htm#en_us_publink1000194332
Future developments.(p2)
The IRS has created a page on IRS.gov for information about Publication 505 at www.irs.gov/pub505. Information about any future developments affecting Publication 505 (such as legislation enacted after we release it) will be posted on that page.
taxmap/pubs/p505-000.htm#en_us_publink1000194333
Social 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 $113,700 in 2013.
taxmap/pubs/p505-000.htm#en_us_publink1000194334
Photographs 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.