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IRS.gov Website
Publication 505
taxmap/pubs/p505-014.htm#en_us_publink1000194657

How To Figure
Each Payment(p28)

For Use in Calendar Year 2014
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.
taxmap/pubs/p505-014.htm#en_us_publink1000194659

Regular Installment Method(p28)

For Use in Calendar Year 2014
rule
If your first estimated tax payment is due April 15, 2014, you can figure your required payment for each period by dividing your annual estimated tax due (line 16a of the 2014 Estimated Tax Worksheet (Worksheet 2-1)) 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_publink1000194660

Change in estimated tax.(p28)

For Use in Calendar Year 2014
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.
Pencil
Amended estimated tax. If you refigure your estimated tax during the year, or if your first estimated tax payment is due after April 15, 2014, figure your required payment for each remaining payment period using Worksheet 2-14.
taxmap/pubs/p505-014.htm#en_us_publink1000194664

Example.(p28)

Early in 2014, Mira Roberts figures that her estimated tax due is $1,800. She makes estimated tax payments on April 15 and June 16 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 2-14.
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_publink1000194666
Pencil

Worksheet 2-14. 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 16, 2014    
 75% (.75) if next payment is due September 15,
 2014
    
 100% (1.00) if next payment is due January 15,
 2015
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 15, 2015, 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 16, 2014, enter one-half of the amount on line 6 here and on the payment vouchers for your payments due September 15, 2014, and January 15, 2015. If the amount on line 4 is due September 15, 2014, enter the amount from line 6 here and on the payment voucher for your payment due January 15, 2015 7.$1,025 
taxmap/pubs/p505-014.htm#en_us_publink1000309056

Worksheet 2-14. Amended Estimated Tax Worksheet—Blank

       
1.Amended total estimated tax due1.
2.Multiply line 1 by:    
 50% (.50) if next payment is due June 16, 2014    
 75% (.75) if next payment is due September 15,
 2014
    
 100% (1.00) if next payment is due January 15,
 2015
2.  
3.Estimated tax payments for all previous periods3.  
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.  
 Note. If the payment on line 4 is due January 15, 2015, stop here. Otherwise, go to line 5.     
5.Add lines 3 and 45.
6.Subtract line 5 from line 1 and enter the result (but not less than zero)6.
7.Each following required payment: If the payment on line 4 is due June 16, 2014, enter one-half of the amount on line 6 here and on the payment vouchers for your payments due September 15, 2014, and January 15, 2015. If the amount on line 4 is due September 15, 2014, enter the amount from line 6 here and on the payment voucher for your payment due January 15, 2015 7.
taxmap/pubs/p505-014.htm#en_us_publink1000194667
Underpayment penalty.(p29)
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_publink1000194669

Annualized Income Installment Method(p29)

For Use in Calendar Year 2014
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 2014 Annualized Estimated Tax Worksheet (Worksheet 2-9).
EIC
You first must complete the 2014 Estimated Tax Worksheet (Worksheet 2-1) through line 16b.
Use the result you figure on line 32 of Worksheet 2-9 to make your estimated tax payments and complete your payment vouchers.
Note.If you use the annualized income installment method to figure your estimated tax payments, you must file Form 2210 with your 2014 tax return. See Annualized Income Installment Method (Schedule AI) in chapter 4 for more information.
taxmap/pubs/p505-014.htm#en_us_publink1000194674

Instructions for the 2014 Annualized Estimated Tax Worksheet (Worksheet 2-9)(p30)

For Use in Calendar Year 2014
rule
Deposit
Use Worksheet 2-9 to help you follow these instructions.
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/p505-014.htm#en_us_publink1000194678

Line 1.(p30)

For Use in Calendar Year 2014
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, earlier.
taxmap/pubs/p505-014.htm#en_us_publink1000194680
Self-employment income.(p30)
If you had self-employment income, first complete Section B of this worksheet. Use the amounts on line 43 when figuring your expected AGI to enter in each column of Section A, line 1.
taxmap/pubs/p505-014.htm#en_us_publink1000194681

Line 4.(p30)

For Use in Calendar Year 2014
rule
Be sure to consider all deduction limits figured on Schedule A (Form 1040), such as reducing your medical expenses by 10% (7.5% if either you or your spouse was born before January 2, 1950) 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 (2014 Annualized Estimated Tax Worksheet (Worksheet 2-9)).
taxmap/pubs/p505-014.htm#en_us_publink1000194683

Line 6.(p30)

For Use in Calendar Year 2014
rule
Multiply line 4 by line 5 and enter the result on line 6 unless line 3 is more than $305,050 if married filing jointly or qualifying widow(er), $279,650 if head of household, $254,200 if single, or $152,525 if married filing separately. In that case, use Worksheet 2-10 to figure the amount to enter on line 6. Complete Worksheet 2–10 for each period, as necessary.
taxmap/pubs/p505-014.htm#en_us_publink1000194684

Line 7.(p30)

For Use in Calendar Year 2014
rule
If you will not itemize your deductions, use Worksheet 2-4 to figure your standard deduction.
taxmap/pubs/p505-014.htm#en_us_publink1000194686

Line 10.(p30)

For Use in Calendar Year 2014
rule
Multiply $3,950 by your total expected exemptions and enter the result on line 10 unless line 3 is more than $305,050 if married filing jointly or qualifying widow(er), $279,650 if head of household, $254,200 if single, or $152,525 if married filing separately.
In that case, use Worksheet 2-11 to figure the amount to enter on line 10.
taxmap/pubs/p505-014.htm#en_us_publink1000194687

Line 12.(p30)

For Use in Calendar Year 2014
rule
Generally, you will use the Tax Rate Schedules 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_publink1000194689
Tax on child's investment income.(p30)
You must use a special method to figure tax on the income of the following children who have more than $2,000 of investment income.
  1. Children under age 18 at the end of 2014.
  2. The following children if their earned income is not more than half their support.
    1. Children age 18 at the end of 2014.
    2. Children who are full-time students over age 18 and under age 24 at the end of 2014.
See Publication 929.
taxmap/pubs/p505-014.htm#en_us_publink1000194690
Tax on net capital gain.(p30)
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_publink1000194691
Tax on qualified dividends and capital gains.(p30)
For 2014, your capital gain and dividends rate will depend on your income.
Pencil
Tax on capital gain or qualified dividends. If the amount on line 1 includes a net capital gain or qualified dividends, use Worksheet 2-12 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 2-13 to figure the amount to enter on line 12.
taxmap/pubs/p505-014.htm#en_us_publink1000194696

Line 13.(p30)

For Use in Calendar Year 2014
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 2013 return.
Use the 2013 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 2014 Annualized Estimated Tax Worksheet (Worksheet 2-9). Enter the result on line 13 of this worksheet.
taxmap/pubs/p505-014.htm#en_us_publink1000194698

Line 15.(p30)

For Use in Calendar Year 2014
rule
Include all the nonrefundable credits you expect to claim because of events that will occur during the period.
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 2-9 to figure the credit for each column.
taxmap/pubs/p505-014.htm#en_us_publink1000194702

Line 18.(p30)

For Use in Calendar Year 2014
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 on the line for "other taxes" (line 60 on the 2013 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 2014. See Form 5405 for exceptions.
  5. Additional Medicare Tax. A 0.9% Additional Medicare Tax applies to your combined Medicare wages and self-employment income and/or your RRTA compensation that exceeds the amount listed in the following chart, based on your filing status.
    Filing Status Threshold Amount
    Married filing jointly$250,000
    Married filing separately$125,000
    Single$200,000
    Head of household$200,000
    Qualifying Widow(er)$200,000

    Medicare wages and self-employment income are combined to determine if your income exceeds the threshold. A self-employment loss should not be considered for purposes of this tax. RRTA compensation should be separately compared to the threshold.
    Your employer is responsible for withholding the 0.9% Additional Medicare Tax on Medicare wages or RRTA compensation it pays you in excess of $200,000 in 2014. You should consider this withholding, if applicable, in determining whether you need to make an estimated payment. For more information on Additional Medicare Tax, go to IRS.gov and enter "Additional Medicare Tax" in the search box.
  6. Net Investment Income Tax (NIIT). The NIIT is 3.8% of the lesser of your net investment income or the excess of your modified adjusted gross income over a specified threshold amount. Threshold amounts:
    Filing Status Threshold Amount
    Married filing jointly$250,000
    Married filing separately$125,000
    Single$200,000
    Head of household$200,000
    Qualifying Widow(er)$250,000

    For more information on Net Investment Income Tax, go to IRS.gov and enter "Net Investment Income Tax" in the search box.
taxmap/pubs/p505-014.htm#en_us_publink1000194703

Line 20.(p31)

For Use in Calendar Year 2014
rule
Include all the refundable credits (other than withholding credits) you can claim because of events that occurred during the period.
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_publink1000194705

Line 29.(p31)

For Use in Calendar Year 2014
rule
If line 28 is smaller than line 25 and you are not certain of the estimate of your 2014 tax, you can avoid a penalty by entering the amount from line 25 on line 29.
taxmap/pubs/p505-014.htm#en_us_publink1000194706

Line 31.(p31)

For Use in Calendar Year 2014
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 2014 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, earlier.
taxmap/pubs/p505-014.htm#en_us_publink1000194708

Nonresident aliens.(p31)

For Use in Calendar Year 2014
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) 2014 Estimated Tax Worksheet in column (b), and one-fourth in columns (c) and (d) of Worksheet 2-9.
  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_publink1000194709

Estimated Tax
Payments Not Required(p31)

For Use in Calendar Year 2014
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.