2.   Estimated Tax for 2014

Introduction

Estimated tax is the method used to pay tax on income that is not subject to withholding. This includes income from self-employment, interest, dividends, alimony, rent, gains from the sale of assets, prizes, and awards. You also may have to pay estimated tax if the amount of income tax being withheld from your salary, pension, or other income is not enough.

Estimated tax is used to pay both income tax and self-employment tax, as well as other taxes and amounts reported on your tax return. If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. If you do not pay enough by the due date of each payment period (see When To Pay Estimated Tax , later), you may be charged a penalty even if you are due a refund when you file your tax return. For information on when the penalty applies, see chapter 4.

It would be helpful for you to have a copy of your 2013 tax return and an estimate of your 2014 income nearby while reading this chapter.

Topics - This chapter discusses:

  • Who must pay estimated tax,

  • How to figure estimated tax (including illustrated examples),

  • When to pay estimated tax,

  • How to figure each payment, and

  • How to pay estimated tax.

Useful Items - You may want to see:

Form (and Instructions)

  • 1040-ES Estimated Tax for Individuals

See chapter 5 for information about how to get this publication and form.

Worksheets.   You may need to use several of the blank worksheets included in this chapter. See Worksheets for Chapter 2, later, to locate what you need.

Who Does Not Have To Pay Estimated Tax

If you receive salaries and wages, you may be able to avoid paying estimated tax by asking your employer to take more tax out of your earnings. To do this, file a new Form W-4 with your employer. See chapter 1.

Estimated tax not required.   You do not have to pay estimated tax for 2014 if you meet all three of the following conditions.
  • You had no tax liability for 2013.

  • You were a U.S. citizen or resident alien for the whole year.

  • Your 2013 tax year covered a 12-month period.

  You had no tax liability for 2013 if your total tax (defined later under Total tax for 2013—line 14b ) was zero or you did not have to file an income tax return.

Figure 2-A. Do You Have To Pay Estimated Tax?
Please click here for the text description of the image.

Figure 2-A: Do You Have To Pay Estimated Tax?

Who Must Pay Estimated Tax

If you owed additional tax for 2013, you may have to pay estimated tax for 2014.

You can use the following general rule as a guide during the year to see if you will have enough withholding, or should increase your withholding or make estimated tax payments.

General Rule

In most cases, you must pay estimated tax for 2014 if both of the following apply.

  1. You expect to owe at least $1,000 in tax for 2014, after subtracting your withholding and refundable credits.

  2. You expect your withholding and refundable credits to be less than the smaller of:

    1. 90% of the tax to be shown on your 2014 tax return, or

    2. 100% of the tax shown on your 2013 tax return. Your 2013 tax return must cover all 12 months.

Note. The percentages in (2a) or (2b) above may be different if you are a farmer, fisherman, or higher income taxpayer. See Special Rules , later.

If the result from using the general rule above suggests that you will not have enough withholding, complete the 2014 Estimated Tax Worksheet for a more accurate calculation.

Figure 2-A takes you through the general rule. You may find this helpful in determining if you must pay estimated tax.

If all your income will be subject to income tax withholding, you probably do not need to pay estimated tax.

Example 1.

Jane Smart uses Figure 2-A and the following information to figure whether she should pay estimated tax for 2014. She files as head of household claiming her dependent son, takes the standard deduction, and expects no refundable credits for 2014.

Expected adjusted gross income (AGI) for 2014 $82,800
AGI for 2013 $73,700
Total tax on 2013 return (Form 1040,  
line 61)
$  8,746
Total 2014 estimated tax (line 13c of the 2014 Estimated Tax Worksheet) $11,015
Tax expected to be withheld in 2014 $10,000

Jane's answer to Figure 2-A, box 1, is YES; she expects to owe at least $1,000 for 2014 after subtracting her withholding from her expected total tax ($11,015 − $10,000 = $1,015). Her answer to box 2a is YES; she expects her income tax withholding ($10,000) to be at least 90% of the tax to be shown on her 2014 return ($11,015 × 90% = $9,913.50). Jane does not need to pay estimated tax.

Example 2.

The facts are the same as in Example 1, except that Jane expects only $8,700 tax to be withheld in 2014. Because that is less than $9,913.50, her answer to box 2a is NO.

Jane's answer to box 2b is also NO; she does not expect her income tax withholding ($8,700) to be at least 100% of the total tax shown on her 2013 return ($8,746). Jane must increase her withholding or pay estimated tax for 2014.

Example 3.

The facts are the same as in Example 2, except that the total tax shown on Jane's 2013 return was $8,600. Because she expects to have more than $8,600 withheld in 2014 ($8,700), her answer to box 2b is YES. Jane does not need to pay estimated tax for 2014.

Married Taxpayers

If you qualify to make joint estimated tax payments, apply the rules discussed here to your joint estimated income.

You and your spouse can make joint estimated tax payments even if you are not living together.

However, you and your spouse cannot make joint estimated tax payments if:

  • You are legally separated under a decree of divorce or separate maintenance,

  • You and your spouse have different tax years,

  • Either spouse is a nonresident alien (unless that spouse elected to be treated as a resident alien for tax purposes). See Choosing Resident Alien Status in Publication 519, or

  • Individuals of the same sex and opposite sex who are in registered domestic partnerships, civil unions, or other similar formal relationships that are not marriages under state law cannot make joint estimated tax payments. These individuals can take credit only for the estimated tax payments that he or she made.

If you and your spouse cannot make joint estimated tax payments, apply these rules to your separate estimated income.

Making joint or separate estimated tax payments will not affect your choice of filing a joint tax return or separate returns for 2014.

2013 separate returns and 2014 joint return.   If you plan to file a joint return with your spouse for 2014, but you filed separate returns for 2013, your 2013 tax is the total of the tax shown on your separate returns. You filed a separate return if you filed as single, head of household, or married filing separately.

2013 joint return and 2014 separate returns.   If you plan to file a separate return for 2014, but you filed a joint return for 2013, your 2013 tax is your share of the tax on the joint return. You file a separate return if you file as single, head of household, or married filing separately.

  To figure your share of the tax on a joint return, first figure the tax both you and your spouse would have paid had you filed separate returns for 2013 using the same filing status for 2014. Then multiply the tax on the joint return by the following fraction.

  
  The tax you would have paid had you filed a separate return  
The total tax you and your spouse would have paid had you filed separate returns

Example.

Joe and Heather filed a joint return for 2013 showing taxable income of $48,500 and a tax of $6,386. Of the $48,500 taxable income, $40,100 was Joe's and the rest was Heather's. For 2014, they plan to file married filing separately. Joe figures his share of the tax on the 2013 joint return as follows:

Tax on $40,100 based on separate return $5,960
Tax on $8,400 based on separate return 843
Total $6,803
Joe's percentage of total ($5,960 ÷ $6,803) 87.6%
Joe's share of tax on joint return  
($6,386 × 87.6%)
$5,594

Special Rules

There are special rules for farmers, fishermen, and certain higher income taxpayers.

Farmers and Fishermen

If at least two-thirds of your gross income for 2013 or 2014 is from farming or fishing, substitute 662/3% for 90% in (2a) under General Rule , earlier.

Gross income.   Your gross income is all income you receive in the form of money, goods, property, and services that is not exempt from tax. To determine whether two-thirds of your gross income for 2013 was from farming or fishing, use as your gross income the total of the income (not loss) amounts.

Joint returns.   On a joint return, you must add your spouse's gross income to your gross income to determine if at least two-thirds of your total gross income is from farming or fishing.

Gross income from farming.   This is income from cultivating the soil or raising agricultural commodities. It includes the following amounts.
  • Income from operating a stock, dairy, poultry, bee, fruit, or truck farm.

  • Income from a plantation, ranch, nursery, range, orchard, or oyster bed.

  • Crop shares for the use of your land.

  • Gains from sales of draft, breeding, dairy, or sporting livestock.

  For 2013, gross income from farming is the total of the following amounts.
  • Schedule F (Form 1040), Profit or Loss From Farming, line 9.

  • Form 4835, Farm Rental Income and Expenses, line 7.

  • Your share of the gross farming income from a partnership, S corporation, estate or trust, from: Schedule K-1 (Form 1065), Schedule K-1 (Form 1120S), or Schedule K-1 (Form 1041).

  • Your gains from sales of draft, breeding, dairy, or sporting livestock shown on Form 4797, Sales of Business Property.

  Wages you receive as a farm employee and wages you receive from a farm corporation are not gross income from farming.

Gross income from fishing.   This is income from catching, taking, harvesting, cultivating, or farming any kind of fish, shellfish (for example, clams and mussels), crustaceans (for example, lobsters, crabs, and shrimp), sponges, seaweeds, or other aquatic forms of animal and vegetable life.

  Gross income from fishing includes the following amounts.
  • Schedule C (Form 1040), Profit or Loss From Business.

  • Income for services as an officer or crew member of a vessel while the vessel is engaged in fishing.

  • Your share of the gross fishing income from a partnership, S corporation, estate or trust, from: Schedule K-1 (Form 1065), Schedule K-1 (Form 1120S), or Schedule K-1 (Form 1041).

  • Certain taxable interest and punitive damage awards received in connection with the Exxon Valdez litigation.

  • Income for services normally performed in connection with fishing.

Services normally performed in connection with fishing include:
  • Shore service as an officer or crew member of a vessel engaged in fishing, and

  • Services that are necessary for the immediate preservation of the catch, such as cleaning, icing, and packing the catch.

Higher Income Taxpayers

If your AGI for 2013 was more than $150,000 ($75,000 if your filing status for 2014 is married filing a separate return), substitute 110% for 100% in (2b) under General Rule , earlier.

For 2013, AGI is the amount shown on Form 1040, line 37; Form 1040A, line 21; and Form 1040EZ, line 4.

Note.

This rule does not apply to farmers and fishermen.

Aliens

Resident and nonresident aliens also may have to pay estimated tax. Resident aliens should follow the rules in this publication, unless noted otherwise. Nonresident aliens should get Form 1040-ES (NR), U.S. Estimated Tax for Nonresident Alien Individuals.

You are an alien if you are not a citizen or national of the United States. You are a resident alien if you either have a green card or meet the substantial presence test.

For more information about withholding, the substantial presence test, and Form 1040-ES (NR), see Publication 519.

Estates and Trusts

Estates and trusts also must pay estimated tax. However, estates (and certain grantor trusts that receive the residue of the decedent's estate under the decedent's will) are exempt from paying estimated tax for the first 2 years after the decedent's death.

Estates and trusts must use Form 1041-ES, Estimated Income Tax for Estates and Trusts, to figure and pay estimated tax.

How To Figure Estimated Tax

To figure your estimated tax, you must figure your expected AGI, taxable income, taxes, deductions, and credits for the year.

When figuring your 2014 estimated tax, it may be helpful to use your income, deductions, and credits for 2013 as a starting point. Use your 2013 federal tax return as a guide. You can use Form 1040-ES to figure your estimated tax. Nonresident aliens use Form 1040-ES (NR) to figure estimated tax.

You must make adjustments both for changes in your own situation and for recent changes in the tax law. Some of these changes are discussed under What's New for 2014 , earlier. For information about these and other changes in the law, visit the IRS website at IRS.gov.

The instructions for Form 1040-ES include a worksheet to help you figure your estimated tax. Keep the worksheet for your records.

2014 Estimated Tax Worksheet

Use Worksheet 2-1 to help guide you through the information about completing the 2014 Estimated Tax Worksheet. You can also find a copy of the worksheet in the Instructions for Form 1040-ES.

Expected AGI—Line 1

Your expected AGI for 2014 (line 1) is your expected total income minus your expected adjustments to income.

Total income.   Include in your total income all the income you expect to receive during the year, even income that is subject to withholding. However, do not include income that is tax exempt.

  Total income includes all income and loss for 2014 that, if you had received it in 2013, would have been included on your 2013 tax return in the total on line 22 of Form 1040, line 15 of Form 1040A, or line 4 of Form 1040EZ.

Social security and railroad retirement benefits. If you expect to receive social security or tier 1 railroad retirement benefits during 2014, use Worksheet 2-2 to figure the amount of expected taxable benefits you should include on line 1.

Adjustments to income.   Be sure to subtract from your expected total income all of the adjustments you expect to take on your 2014 tax return.

Self-employed. If you expect to have income from self-employment, use Worksheet 2-3 to figure your expected self-employment tax and your allowable deduction for self-employment tax. Include the amount from Worksheet 2-3 in your expected adjustments to income. If you file a joint return and both you and your spouse have net earnings from self-employment, each of you must complete a separate worksheet.

Expected Taxable Income— Lines 2–5

Reduce your expected AGI for 2014 (line 1) by either your expected itemized deductions or your standard deduction and by your exemptions (lines 2 through 5).

Itemized deductions—line 2.   If you expect to claim itemized deductions on your 2014 tax return, enter the estimated amount on line 2.

  Itemized deductions are the deductions that can be claimed on Schedule A (Form 1040).

  
For 2014, your total itemized deductions may be reduced if your AGI is more than the amount shown next for your filing status.
Single $254,200
Married filing jointly or qualifying widow(er) $305,050
Married filing separately $152,525
Head of household $279,650

  If you expect your AGI to be more than this amount, use Worksheet 2-5 to figure the amount to enter on line 2.

Standard deduction—line 2.   If you expect to claim the standard deduction on your 2014 tax return, enter the amount on line 2. Use Worksheet 2-4 to figure your standard deduction.

No standard deduction.   The standard deduction for some individuals is zero. Your standard deduction will be zero if you:
  • File a separate return and your spouse itemizes deductions,

  • Are a dual-status alien, or

  • File a return for a period of less than 12 months because you change your accounting period.

Exemptions—line 4.   After you have subtracted either your expected itemized deductions or your standard deduction from your expected AGI, reduce the amount remaining by $3,950 for each exemption you expect to take on your 2014 tax return. If another person (such as your parent) can claim an exemption for you on his or her tax return, you cannot claim your own personal exemption. This is true even if the other person will not claim your exemption or the exemption will be reduced or eliminated under the phaseout rule.

  
For 2014, your deduction for personal exemption is reduced if your AGI is more than the amount shown next for your filing status.
Single $254,200
Married filing jointly or qualifying widow(er) $305,050
Married filing separately $152,525
Head of household $279,650

  If you expect your AGI to be more than this amount, use Worksheet 2-6 to figure the amount to enter on line 4.

Expected Taxes and Credits— Lines 6–13c

After you have figured your expected taxable income (line 5), follow the steps next to figure your expected taxes, credits, and total tax for 2014. Most people will have entries for only a few of these steps. However, you should check every step to be sure you do not overlook anything.

Step 1.   Figure your expected income tax (line 6). Generally, you will use the 2014 Tax Rate Schedules, later, to figure your expected income tax.

  However, see below for situations where you must use a different method to compute your estimated tax.

Tax on child's investment income.   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, Tax Rules for Children and Dependents. Although the ages and dollar amounts in the publication may be different in the 2014 revision, this reference will give you basic information for figuring the tax.

Tax on net capital gain.   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.

Tax on capital gain and qualified dividends. If the amount on line 1 includes a net capital gain or qualified dividends, use Worksheet 2-7 to figure your tax.

Note.

For 2014, your capital gains and dividends rate will depend on your income.

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 to figure your estimated tax.

Step 2.   Total your expected taxes (line 8). Include on line 8 the sum of the following.
  1. Your tax on line 6.

  2. Your expected alternative minimum tax (AMT) from Form 6251, or included on Form 1040A.

  3. Your expected additional taxes from Form 8814, Parents' Election To Report Child's Interest and Dividends, and Form 4972, Tax on Lump-Sum Distributions.

  4. Any recapture of education credits.

Step 3.   Subtract your expected credits (line 9). If you are using your 2013 return as a guide and filed Form 1040, your total credits for 2013 were shown on line 54. If you filed Form 1040A, your total credits for 2013 were on line 34.

  If your credits on line 9 are more than your taxes on line 8, enter “-0-” on line 10 and go to Step 4.

Step 4.   Add your expected self-employment tax (line 11). You already should have figured your self-employment tax (see Self-employed under Expected AGI—Line 1, earlier).

Step 5.   Add your expected other taxes (line 12).

  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 written on Form 1040 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 and Medicare tax 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. See Form 5405.

  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 to 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 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) $250,000

    For more information on Net Investment Income Tax, go to IRS.gov and enter “Net Investment Income Tax” in the search box.

Step 6.   Subtract your refundable credit (line 13b).

  To figure your expected fuel tax credit, do not include fuel tax for the first three quarters of the year that you expect to have refunded to you.

  The result of steps 1 through 6 is your total estimated tax for 2014 (line 13c).

Required Annual Payment— Line 14c

On lines 14a through 14c, figure the total amount you must pay for 2014, through withholding and estimated tax payments, to avoid paying a penalty.

General rule.   The total amount you must pay is the smaller of:
  1. 90% of your total expected tax for 2014, or

  2. 100% of the total tax shown on your 2013 return. Your 2013 tax return must cover all 12 months.

Special rules.   There are special rules for higher income taxpayers and for farmers and fishermen.

Higher income taxpayers.   If your AGI for 2013 was more than $150,000 ($75,000 if your filing status for 2014 is married filing separately), substitute 110% for 100% in (2) above. This rule does not apply to farmers and fishermen.

For 2013, AGI is the amount shown on Form 1040, line 37; Form 1040A, line 21; and Form 1040EZ, line 4.

Example.   Jeremy Martin's total tax on his 2013 return was $42,581, and his expected tax for 2014 is $71,253. His 2013 AGI was $180,000. Because Jeremy had more than $150,000 of AGI in 2013, he figures his required annual payment as follows. He determines that 90% of his expected tax for 2014 is $64,128 (.90 × $71,253). Next, he determines that 110% of the tax shown on his 2013 return is $46,839 (1.10 x $42,581). Finally, he determines that his required annual payment is $46,839, the smaller of the two.

Farmers and fishermen.   If at least two-thirds of your gross income for 2013 or 2014 is from farming or fishing, your required annual payment is the smaller of:
  1. 662/3% (.6667) of your total tax for 2014, or

  2. 100% of the total tax shown on your 2013 return. (Your 2013 tax return must cover all 12 months.)

  For definitions of “gross income from farming” and “gross income from fishing,” see Farmers and Fishermen , under Special Rules discussed earlier.

Total tax for 2013—line 14b.   Your 2013 total tax, if you filed Form 1040, is the amount on line 61 reduced by the following.
  1. Unreported social security and Medicare tax or RRTA tax from Forms 4137 or 8919 (line 57).

  2. The following amounts from Form 5329 included on line 58.

    1. Any tax on excess contributions to IRAs, Archer MSAs, Coverdell education savings accounts, and health savings accounts.

    2. Any tax on excess accumulations in qualified retirement plans.

  3. The following write-ins on line 60.

    1. Excise tax on excess golden parachute payments (identified as “EPP”).

    2. Excise tax on insider stock compensation from an expatriated corporation (identified as “ISC”).

    3. Look-back interest due under section 167(g) (identified as “From Form 8866”).

    4. Look-back interest due under section 460(b) (identified as “From Form 8697”).

    5. Recapture of federal mortgage subsidy (identified as “FMSR”).

    6. Additional tax on advance payments of health coverage tax credit when not eligible (identified as “HCTC”).

    7. Uncollected social security and Medicare tax or RRTA tax on tips or group-term life insurance (identified as “UT”).

  4. Any refundable credit amounts.

  If you filed Form 1040A, your 2013 total tax is the amount on line 35 reduced by any refundable credits.

  If you filed Form 1040EZ, your 2013 total tax is the amount on line 10 reduced by the amount on line 8a.

Total Estimated Tax Payments Needed—Line 16a

Use lines 15 and 16a to figure the total estimated tax you may be required to pay for 2014. Subtract your expected withholding from your required annual payment (line 14c). You usually must pay this difference in four equal installments. See When To Pay Estimated Tax and How To Figure Each Payment .

You do not have to pay estimated tax if:

  • Line 14c minus line 15 is zero or less, or

  • Line 13c minus line 15 is less than $1,000.

Withholding—line 15.   Your expected withholding for 2014 (line 15) includes the income tax you expect to be withheld from all sources (wages, pensions and annuities, etc.). It includes excess social security, and tier 1 railroad retirement tax you expect to be withheld from your wages and compensation. For this purpose, you will have excess social security or tier 1 railroad retirement tax withholding for 2014 only if your wages and compensation from two or more employers are more than $117,000. See Excess Social Security or Railroad Retirement Tax Withholding in chapter 3.

  It also includes Additional Medicare Tax you expect to be withheld from your wages or compensation. Your employer is responsible for withholding the 0.9% Additional Medicare Tax on Medicare wages or RRTA compensation it pays to you in excess of $200,000.

When To Pay Estimated Tax

For estimated tax purposes, the year is divided into four payment periods. Each period has a specific payment due date. If you do not pay enough tax by the due date of each of the payment periods, you may be charged a penalty even if you are due a refund when you file your income tax return.

If a payment is mailed, the date of the U.S. postmark is considered the date of payment. The payment periods and due dates for estimated tax payments are shown next. For exceptions to the dates listed, see Saturday, Sunday, holiday rule below.

For the period: Due date:
Jan. 11 – March 31 April 15
April 1 – May 31 June 16
June 1 – August 31 September 15
Sept. 1 – Dec. 31 January 15  
next year2

1If your tax year does not begin on January 1,  
see Fiscal year taxpayers .
2See January payment .

Saturday, Sunday, holiday rule.   If the due date for an estimated tax payment falls on a Saturday, Sunday, or legal holiday, the payment will be on time if you make it on the next day that is not a Saturday, Sunday, or a holiday.

January payment.   If you file your 2014 Form 1040 or Form 1040A by February 2, 2015, and pay the rest of the tax you owe, you do not need to make the payment due on January 15, 2015.

Example.

Janet Adams does not pay any estimated tax for 2014. She files her 2014 income tax return and pays the balance due shown on her return on January 26, 2015.

Janet's estimated tax for the fourth payment period is considered to have been paid on time. However, she may owe a penalty for not making the first three estimated tax payments, if required. Any penalty for not making those payments will be figured up to January 26, 2015.

Fiscal year taxpayers.   If your tax year does not start on January 1, your payment due dates are:
  1. The 15th day of the 4th month of your fiscal year,

  2. The 15th day of the 6th month of your fiscal year,

  3. The 15th day of the 9th month of your fiscal year, and

  4. The 15th day of the 1st month after the end of your fiscal year.

  You do not have to make the last payment listed above if you file your income tax return by the last day of the first month after the end of your fiscal year and pay all the tax you owe with your return.

When To Start

You do not have to make estimated tax payments until you have income on which you will owe income tax. If you have income subject to estimated tax during the first payment period, you must make your first payment by the due date for the first payment period.

You have several options when paying estimated taxes. You can:

  • apply an overpayment from the previous tax year,

  • pay all your estimated tax by the due date of your first payment, or

  • pay it in installments.

If you choose to pay in installments, make your first payment by the due date for the first payment period. Make your remaining installment payments by the due dates for the later periods.

To avoid any estimated tax penalties, all installments must be paid by their due date and for the required amount.

No income subject to estimated tax during first period.   If you do not have income subject to estimated tax until a later payment period, you must make your first payment by the due date for that period. You can pay your entire estimated tax by the due date for that period or you can pay it in installments by the due date for that period and the due dates for the remaining periods. Table 2-1 shows the dates for making installment payments.

  

Table 2-1.Due Dates for Estimated Tax Installment Payments

If you first have income on which you must pay estimated tax: Make a 
payment  
by:*
Make later  
installments  
by:*
Before April 1 April 15 June 16
    Sept. 15
    Jan. 15 next year
April 1–May 31 June 16 Sept. 15
    Jan. 15 next year
June 1–Aug. 31 Sept. 15 Jan. 15 next year
After Aug. 31 Jan. 15 
next year
(None)

How much to pay to avoid penalty.   To determine how much you should pay by each payment due date, see How To Figure Each Payment , later.

Farmers and Fishermen

If at least two-thirds of your gross income for 2013 or 2014 is from farming or fishing, you have only one payment due date for your 2014 estimated tax, January 15, 2015. The due dates for the first three payment periods, discussed under When To Pay Estimated Tax , earlier, do not apply to you.

If you file your 2014 Form 1040 by March 2, 2015, and pay all the tax you owe at that time, you do not need to make an estimated tax payment.

Fiscal year farmers and fishermen.   If you are a farmer or fisherman, but your tax year does not start on January 1, you can either:
  • Pay all your estimated tax by the 15th day after the end of your tax year, or

  • File your return and pay all the tax you owe by the 1st day of the 3rd month after the end of your tax year.

How To Figure Each Payment

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.

Regular Installment Method

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.

Change in estimated tax.   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 .

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.

Example.

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.

Worksheet 2-14.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 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 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, 2015, 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 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

Worksheet 2-14.Amended Estimated Tax Worksheet—Blank

             
1. Amended total estimated tax due 1.  
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 periods 3.      
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 4 5.  
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.  

Underpayment penalty.   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.

Annualized Income Installment Method

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).

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.

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

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.

Line 1.   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.

Self-employment income.   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.

Line 4.   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)).

Line 6.   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.

Line 7.   If you will not itemize your deductions, use Worksheet 2-4 to figure your standard deduction.

Line 10.   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.

Line 12.   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.

Tax on child's investment income.   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.

Tax on net capital gain.   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.

Tax on qualified dividends and capital gains.   For 2014, your capital gain and dividends rate will depend on your income.

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.

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.

Line 13.   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.

Line 15.   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.

Line 18.   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.

Line 20.   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.

Line 29.   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.

Line 31.   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:
  • 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.

Nonresident aliens.   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.

Estimated Tax Payments Not Required

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

  • One-fourth 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.

How To Pay Estimated Tax

There are several ways to pay estimated tax.

  • Credit an overpayment on your 2013 return to your 2014 estimated tax.

  • Pay by direct transfer from your bank account, or pay by credit or debit card using a pay-by-phone system or the Internet.

  • Send in your payment (check or money order) with a payment voucher from Form 1040-ES.

Credit an Overpayment

If you show an overpayment of tax after completing your Form 1040 or Form 1040A for 2013, you can apply part or all of it to your estimated tax for 2014. On Form 1040, or Form 1040A, enter the amount you want credited to your estimated tax rather than refunded. Take the amount you have credited into account when figuring your estimated tax payments. If you timely file your 2013 return, treat the credit as a payment made on April 15, 2014.

If you are a beneficiary of an estate or trust, and the trustee elects to credit 2014 trust payments of estimated tax to you, you can treat the amount credited as paid by you on January 15, 2015.

If you choose to have an overpayment of tax credited to your estimated tax, you cannot have any of that amount refunded to you until you file your tax return for the following year. You also cannot use that overpayment in any other way.

Example.

When Kathleen finished filling out her 2013 tax return, she saw that she had overpaid her taxes by $750. Kathleen knew she would owe additional tax in 2014. She credited $600 of the overpayment to her 2014 estimated tax and had the remaining $150 refunded to her.

In September, she amended her 2013 return by filing Form 1040X, Amended U.S. Individual Income Tax Return. It turned out that she owed $250 more in tax than she had thought. This reduced her 2013 overpayment from $750 to $500. Because the $750 had already been applied to her 2014 estimated tax or refunded to her, the IRS billed her for the additional $250 she owed, plus penalties and interest. Kathleen could not use any of the $600 she had credited to her 2014 estimated tax to pay this bill.

Pay Online

Paying online is convenient and secure and helps make sure we get your payments on time. You can make your estimated tax payments online when you e-file or at any time during the year. You can pay using either of the following electronic payment methods.

  • Direct transfer from your bank account.

  • Credit or debit card.

To pay your taxes online or for more information, go to www.irs.gov/e-pay.

Pay by Phone

Paying by phone is another safe and secure method of paying electronically. Use one of the following methods.

  • Direct transfer from your bank account.

  • Credit or debit card.

To pay by direct transfer from your bank account, call EFTPS Customer Service at 1-800-555-4477 (English), 1-800-244-4829 (Espanol), or TTY/TDD 1-800-733-4829.

To pay using a credit or debit card, you can call one of the following service providers. There is a convenience fee charged by these providers that varies by provider, card type, and payment amount.

WorldPay 
1-888-9-PAY-TAXTM (1-888-972-9829) 
www.payUSAtax.com

Official Payments Corporation 
1-888-UPAY-TAXTM (1-888-872-9829) 
www.officialpayments.com

Link2GOV Corporation 
1-888-PAY-1040TM (1-888-729-1040) 
www.PAY1040.com

For the latest details on how to pay by phone, go to www.irs.gov/e-pay.

Pay by Check or Money Order Using the Estimated Tax Payment Voucher

Each payment of estimated tax by check or money order must be accompanied by a payment voucher from Form 1040-ES. If you use your own envelopes (and not the window envelope that comes with the 1040-ES package), make sure you mail your payment vouchers to the address shown in the Form 1040-ES instructions for the place where you live.

Do not use the address shown in the Form 1040 or Form 1040A instructions.

If you did not pay estimated tax last year, get a copy of Form 1040-ES from the IRS (see chapter 5). Follow the instructions to make sure you use the vouchers correctly.

Joint estimated tax payments.    If you file a joint return and are making joint estimated tax payments, enter the names and social security numbers on the payment voucher in the same order as they will appear on the joint return.

Change of address.    You must notify the IRS if you are making estimated tax payments and you changed your address during the year. Complete Form 8822, Change of Address, and mail it to the address shown in the instructions for that form.

Worksheets for Chapter 2

Use the following worksheets and tables to figure your correct estimated tax.

IF you need... THEN use...
2014 Tax Rate Schedules  
the 2014 Estimated Tax Worksheet Worksheet 2-1
to estimate your taxable social security and railroad retirement benefits—line 1 of ES Worksheet (or Annualized ES Worksheet (Worksheet 2-9)) Worksheet 2-2
to estimate your self-employment (SE) tax and your deduction for SE tax—lines 1 and 11 of ES Worksheet (lines 1 and 17 of Annualized ES Worksheet (Worksheet 2-9)) Worksheet 2-3
to estimate your standard deduction—line 2 of ES Worksheet (line 7 of Annualized ES Worksheet (Worksheet 2-9)) Worksheet 2-4
to reduce your itemized deductions because your estimated AGI is more than $152,525—line 2 of ES Worksheet Worksheet 2-5
to reduce your exemption amount because your estimated AGI is more than $152,525—line 4 of ES Worksheet Worksheet 2-6
to estimate your income tax if line 1 of your ES Worksheet includes a net capital gain or qualified dividends—line 6 of ES Worksheet Worksheet 2-7
to estimate your income tax if you expect to claim a foreign earned income exclusion or foreign housing exclusion or deduction on Form 2555 or Form 2555-EZ—line 6 of ES Worksheet Worksheet 2-8
the 2014 Annualized Estimated Tax Worksheet (Annualized ES Worksheet) Worksheet 2-9
to reduce your itemized deductions because your estimated annualized AGI is more than $152,525—line 6 of Annualized ES Worksheet Worksheet 2-10
to reduce your exemption amount because your estimated annualized AGI is more than $152,525—line 10 of Annualized ES Worksheet Worksheet 2-11
to estimate your income tax if line 1 of your Annualized ES Worksheet includes a net capital gain or qualified dividends—line 12 of Annualized ES Worksheet Worksheet 2-12
to estimate your income tax if you expect to claim a foreign earned income exclusion or foreign housing exclusion or deduction on Form 2555 or Form 2555-EZ—line 12 of Annualized ES Worksheet Worksheet 2-13
to refigure (amend) your estimated tax during the year Worksheet 2-14

2014 Tax Rate Schedules

Caution
Do not use these Tax Rate Schedules to figure your 2013 taxes. Use them only to figure your 2014 estimated taxes.

Schedule X—Use if your 2014 filing status is  
Single
Schedule Z—Use if your 2014 filing status is 
Head of household
If line 5 is: The tax is:     If line 5 is: The tax is:    
Over— But not 
over—
        of the  
amount  
over—
Over— But not 
over—
        of the  
amount  
over—
$0 $9,075     10.0%   $0 $0 $12,950     10.0%   $0
9,075 36,900 $907.50 + 15.0%   9,075 12,950 49,400 $1,295.00 + 15.0%   12,950
36,900 89,350 5,081.25 + 25.0%   36,900 49,400 127,550 6,762.50 + 25.0%   49,400
89,350 186,350 18,193.75 + 28.0%   89,350 127,550 206,600 26,300.00 + 28.0%   127,550
186,350 405,100 45,353.75 + 33.0%   186,350 206,600 405,100 48,434.00 + 33.0%   206,600
405,100 406,750 117,541.25 + 35.0%   405,100 405,100 432,200 113,939.00 + 35.0%   405,100
406,750 - - - - - - 118,118.75 + 39.6%   406,750 432,200 - - - - - - 123,424.00 + 39.6%   432,200
Schedule Y-1—Use if your 2014 filing status is 
Married filing jointly or Qualifying widow(er)
Schedule Y-2—Use if your 2014 filing status is  
Married filing separately
If line 5 is: The tax is:     If line 5 is: The tax is:    
Over— But not 
over—
        of the  
amount  
over—
Over— But not 
over—
        of the  
amount  
over—
$0 $18,150     10.0%   $0 $0 $9,075     10.0%   $0
18,150 73,800 $1,815.00 + 15.0%   18,150 9,075 36,900 $907.50 + 15.0%   9,075
73,800 148,850 10,162.50 + 25.0%   73,800 36,900 74,425 5,081.25 + 25.0%   36,900
148,850 226,850 28,925.00 + 28.0%   148,850 74,425 113,425 14,462.50 + 28.0%   74,425
226,850 405,100 50,765.00 + 33.0%   226,850 113,425 202,550 25,382.50 + 33.0%   113,425
405,100 457,600 109,587.50 + 35.0%   405,100 202,550 228,800 54,793.75 + 35.0%   202,550
457,600 - - - - - - 127,962.50 + 39.6%   457,600 228,800 - - - - - - 63,981.25 + 39.6%   228,800
                           

Worksheet 2-1.2014 Estimated Tax Worksheet

Caution
When this worksheet refers you to instructions, you can find those instructions in the Instructions for 2014 Form 1040-ES.

1 Adjusted gross income you expect in 2014 (see instructions) 1    
2
  • If you plan to itemize deductions, enter the estimated total of your itemized deductions. 
    Caution: If line 1 is over $152,525, your deduction may be reduced. See Worksheet 2-5.

  • If you do not plan to itemize deductions, enter your standard deduction.

2    
3 Subtract line 2 from line 1 3    
4 Exemptions. Multiply $3,950 by the number of personal exemptions. 
Caution: If line 1 is over $152,525, the amount of your personal exemptions may be limited. See Worksheet 2-6.
4    
5 Subtract line 4 from line 3 5    
6 Tax. Figure your tax on the amount on line 5 by using the 2014 Tax Rate Schedules 
Caution: If you will have qualified dividends or a net capital gain, or expect to exclude or deduct foreign earned income or housing, see Worksheets 2-7 and 2-8 to figure the tax
6    
7 Alternative minimum tax from Form 6251 or included on Form 1040A, line 28 7    
8 Add lines 6 and 7. Add to this amount any other taxes you expect to include in the total on Form 1040, line 44 8    
9 Credits (see instructions). Do not include any income tax withholding on this line 9    
10 Subtract line 9 from line 8. If zero or less, enter -0- 10    
11 Self-employment tax (see instructions) 11    
12 Other taxes including, if applicable, Additional Medicare Tax and/or NIIT (see instructions) 12    
13a Add lines 10 through 12 13a    
b Earned income credit, additional child tax credit, fuel tax credit, and refundable American opportunity credit 13b    
c Total 2014 estimated tax. Subtract line 13b from line 13a. If zero or less, enter -0- 13c    
14a Multiply line 13c by 90% (662/3% for farmers and fishermen) 14a          
b Required annual payment based on prior year's tax (see instructions) 14b          
c Required annual payment to avoid a penalty. Enter the smaller of line 14a or 14b 14c    
   
Caution: Generally, if you do not prepay (through income tax withholding and estimated tax payments) at least the amount on line 14c, you may owe a penalty for not paying enough estimated tax. To avoid a penalty, make sure your estimate on line 13c is as accurate as possible. Even if you pay the required annual payment, you may still owe tax when you file your return. If you prefer, you can pay the amount shown on line 13c. 
     
               
15 Income tax withheld and estimated to be withheld during 2014 (including income tax withholding on pensions, annuities, certain deferred income, etc.) 15    
16a Subtract line 15 from line 14c 16a          
  Is the result zero or less? 
Yes. Stop here. You are not required to make estimated tax payments. 
No. Go to line 16b.
           
b Subtract line 15 from line 13c 16b          
  Is the result less than $1,000? 
Yes. Stop here. You are not required to make estimated tax payments. 
No. Go to line 17 to figure your required payment. 
     
               
17 If the first payment you are required to make is due April 15, 2014, enter ¼ of line 16a (minus any 2013 overpayment that you are applying to this installment) here, and on your estimated tax payment voucher(s) if you are paying by check or money order 17    

Worksheet 2-2.2014 Estimated Tax Worksheet—Line 1 Estimated Taxable Social Security and Railroad Retirement Benefits

Note. If you are using this worksheet to estimate your taxable social security or railroad retirement benefits for Worksheet 2-9, 2014 Annualized Estimated Tax Worksheet, multiply the expected amount of benefits for each period by the annualization amount shown on Worksheet 2-9, line 2, for the same period before entering it on line 1 below.
   
1. Enter your expected social security and railroad retirement benefits 1.  
2. Enter one-half of line 1 2.  
3. Enter your expected total income. Do not include any social security and railroad retirement benefits, nontaxable interest income, nontaxable IRA distributions, or nontaxable pension distributions 3.  
4. Enter your expected nontaxable interest income 4.  
5. Enter (as a positive amount) the total of any expected exclusions or deductions for:
  • U.S. savings bond interest used for higher education expenses (Form 8815)

  • Employer-provided adoption benefits (Form 8839)

  • Foreign earned income or housing (Form 2555 or 2555-EZ)

  • Income by bona fide residents of American Samoa (Form 4563) or Puerto Rico

5.  
6. Add lines 2, 3, 4, and 5 6.  
7. Enter your expected adjustments to income. Do not include any student loan interest deduction 7.  
8. Subtract line 7 from line 6. If zero or less, stop here.  
Note. Do not include any social security or railroad retirement benefits in the amount on line 1 of your 2014 Estimated Tax Worksheet (Worksheet 2-1) (or Annualized Estimated Tax Worksheet (Worksheet 2-9))
8.  
9. Enter $25,000 ($32,000 if you expect to file married filing jointly; $0 if you expect to file married filing separately and expect to live with your spouse at any time during the year) 9.  
10. Subtract line 9 from line 8. If zero or less, stop here.  
Note. Do not include any social security or railroad retirement benefits in the amount on line 1 of your Worksheet 2-1 (or Annualized Estimated Tax Worksheet (Worksheet 2-9))
10.  
11. Enter $9,000 ($12,000 if you expect to file married filing jointly; $0 if you expect to file married filing separately and expect to live with your spouse at any time during the year) 11.  
12. Subtract line 11 from line 10. If zero or less, enter -0- 12.  
13. Enter the smaller of line 10 or line 11 13.  
14. Enter one-half of line 13 14.  
15. Enter the smaller of line 2 or line 14 15.  
16. Multiply line 12 by 85% (.85). If line 12 is zero, enter -0- 16.  
17. Add lines 15 and 16 17.  
18. Multiply line 1 by 85% (.85) 18.  
19. Enter the smaller of line 17 or line 18 19.  
20. Expected taxable social security and railroad retirement benefits for the period. Divide line 19 by the annualization amount shown on Worksheet 2-9, line 2, for the same period and enter here. Include this amount in the total on line 1 of your 2014 Estimated Tax Worksheet (Worksheet 2-1) (or Annualized Estimated Tax Worksheet (Worksheet 2-9)) 20.  

Worksheet 2-3.2014 Estimated Tax Worksheet—Lines 1 and 11 Estimated Self-Employment Tax and Deduction Worksheet

1 a. Enter your expected income and profits subject to self-employment tax* 1a.     .
  b. If you will have farm income and also receive social security retirement or disability benefits, enter your expected Conservation Reserve Program payments that will be included on Schedule F (Form 1040) or listed on Schedule K-1 (Form 1065) 1b.      
2.   Subtract line 1b from line 1a 2.      
3.   Multiply line 2 by 92.35% (.9235). If less than $400, do not complete this worksheet; you will not owe self-employment tax on your expected net earnings from self-employment 3.      
4.   Multiply line 3 by 2.9% (.029) 4.  
5.   Maximum income subject to social security tax 5. $117,000    
6.   Enter your expected wages (if subject to social security tax or the  
6.2% portion of tier 1 railroad retirement tax)
6.      
7.   Subtract line 6 from line 5 7.      
    Note. If line 7 is zero or less, enter -0- on line 9 and skip to line 10.        
8.   Enter the smaller of line 3 or line 7 8.      
9.   Multiply line 8 by 12.4% (.124) 9.  
10.   Add line 4 and line 9. Enter the result here and on line 11 of your 2014 Estimated Tax Worksheet (Worksheet 2-1) (or line 17 of the Annualized Estimated Tax Worksheet (Worksheet 2-9)) 10.  
11.   Multiply line 10 by 50% (.50). This is your expected deduction for self-employment tax on Form 1040, line 27. Subtract this amount when figuring your expected AGI on line 1 of your 2014 Estimated Tax Worksheet (Worksheet 2-1) (or Annualized Estimated Tax Worksheet (Worksheet 2-9)) 11.      
*Net profit from self-employment is found on Schedule C; Schedule F; Schedule K-1 (Form 1065); and Schedule K-1 (Form 1065-B).

Worksheet 2-4.2014 Estimated Tax Worksheet—Line 2 Standard Deduction Worksheet

Caution. Do not complete this worksheet if you expect your spouse to itemize on a separate return or you expect to be a dual-status alien. In either case, your standard deduction will be zero.
1. Enter the amount shown below for your filing status.        
  •Single or married filing separately—$6,200        
  •Married filing jointly or Qualifying widow(er)—$12,400        
  •Head of household—$9,100 1.      
2. Can you (or your spouse if filing jointly) be claimed as a dependent on someone else's return?        
 
Box
No. Skip line 3; enter the amount from line 1 on line 4.    
 
Box
Yes. Go to line 3.    
3. Is your earned income* more than $650?        
 
Box
Yes. Add $350 to your earned income. Enter the total.        
 
Box
No. Enter $1,000 3.      
4. Enter the smaller of line 1 or line 3 4.  
5. Were you (or your spouse if filing jointly) born before January 2, 1950, or blind?
 
Box
No. Go to line 6.
 
Box
Yes. Check if:
      a. You were
Box
Born before January 2, 1950
Box
Blind
      b. Your spouse was
Box
Born before January 2, 1950
Box
Blind
      c. Total boxes checked in 5a and 5b
box
    Multiply $1,200 ($1,550 if single or head of household) by the number in the box on line 5c 5.  
6. Standard deduction. Add lines 4 and 5. Enter the result here and on line 2 of your 2014 Estimated Tax Worksheet (Worksheet 2-1) (or line 7 of your 2014 Annualized Estimated Tax Worksheet (Worksheet 2-9)) 6.  
* Earned income includes wages, salaries, tips, professional fees, and other compensation received for personal services you performed. It also includes any amount received as a scholarship that you must include in your income. Reduce your earned income by your allowed deduction for self-employment tax (Worksheet 2-3, line 11).

Worksheet 2-5.2014 Estimated Tax Worksheet—Line 2 Phaseout of Itemized Deductions

1. Enter the estimated total of your itemized deductions 1.  
2. Enter the total amount included on line 1 above for medical and dental expenses, investment interest expense, casualty or theft losses of personal use property, casualty and theft losses from income-producing property, and gambling losses 2.  
3. Is the amount on line 2 less than the amount on line 1? 
No. Stop here. Your deduction is not limited. Enter the amount from line 1 above on line 2 of the 2014 Estimated Tax Worksheet (Worksheet 2-1) 
Yes. Subtract line 2 from line 1.
3.  
4. Multiply line 3 by 80% 4.  
5. Enter the amount from line 1 of the 2014 Estimated Tax Worksheet (Worksheet 2-1) 5.  
6. Enter $305,050 if married filing jointly or qualifying widow(er), $279,650 if head of household, $254,200 if single, $152,525 if married filing separately 6.  
7. Is the amount on line 6 less than the amount on line 5? 
No. Stop here. Your deduction is not limited. Enter the amount from line 1 above on line 2 of the Estimated Tax Worksheet (Worksheet 2-1). 
Yes. Subtract line 6 from line 5.
7.  
8. Multiply line 7 by 3% (.03) 8.  
9. Enter the smaller of line 4 or line 8 9.  
10. Total Itemized Deductions. Subtract line 9 from line 1. Enter the result here and on line 2 of your 2014 Estimated Tax Worksheet (Worksheet 2-1) 10.  
 

Worksheet 2-6.2014 Estimated Tax Worksheet—Line 4 Reduction of Exemption Amount

1. Multiply $3,950 by the number of exemptions you plan to claim 1.  
2. Enter the amount from line 1 of your 2014 Estimated Tax Worksheet (Worksheet 2-1) 2.  
3. Enter 
$254,200 if single, 
$305,050 if married filing jointly or qualifying widow(er), 
$152,525 if married filing separately, or 
$279,650 if head of household
3.  
4. Subtract line 3 from line 2 4.  
5. Is line 4 more than $122,500 (more than $61,250 if married filing separately)? 
Yes. You can not take a deduction for exemptions. 
No. Divide line 4 by $2,500 ($1,250 if married filing separately). If the result is not a whole number, increase it to the next highest whole number (for example, increase 0.0004 to 1)
5.  
6. Multiply line 5 by 2% (.02). Enter the result as a decimal 6.  
7. Multiply line 1 by line 6 7.  
8. Subtract line 7 from line 1. Enter the result here and on line 4 of your 2014 Estimated Tax Worksheet (Worksheet 2-1). 8.  
 

Worksheet 2-7.2014 Estimated Tax Worksheet—Line 6 Qualified Dividends and Capital Gain Tax Worksheet

                   
1. Enter the amount from the appropriate worksheet.
  • Line 5 of your 2014 Estimated Tax Worksheet

  • Line 3 of Worksheet 2-8 (use if you will exclude or deduct foreign earned income or housing)

1.          
2. Enter your qualified dividends expected for 2014 1 2.              
3. Enter your net capital gain expected for 2014 1 3.              
4. Add lines 2 and 3 4.          
5. Enter your 28% rate gain or loss expected for 2014 2 5.              
6. Enter your unrecaptured section 1250 gain expected for 2014 6.              
7. Add lines 5 and 6 7.              
8. Enter the smaller of line 3 or line 7 8.          
9. Subtract line 8 from line 4 9.          
10. Subtract line 9 from line 1. If zero or less, enter -0- 10.          
11. Enter the smaller of line 1 or $73,800 ($36,900 if single or married filing separately, or $49,400 if head of household) 11.              
12. Enter the smaller of line 10 or line 11 12.              
13. Subtract line 4 from line 1. If zero or less, enter -0- 13.              
14. Enter the larger of line 12 or line 13 14.      
  Note. If line 11 and line 12 are the same, skip line 15 and go to line 16.        
15. Subtract line 12 from line 11. This is the amount taxed at 0% 15.      
  Note. If lines 1 and 11 are the same, skip lines 16 through 36 and go to line 37.    
16. Enter the smaller of line 1 or line 9 16.          
17. Enter the amount from line 15. If line 15 is blank, enter -0- 17.          
18. Subtract line 17 from line 16. If zero or less, enter -0- 18.          
19. Enter 
  • $406,750 if single,

  • $228,800 if married filing separately,

  • $457,600 if married filing jointly or qualifying widow(er), or

  • $432,200 if head of household

19.          
20. Enter the smaller of line 1 or line 19 20.          
21. Add lines 14 and 15 21.              
22. Subtract line 21 from line 20, if zero or less enter -0- 22.              
23. Enter the smaller of line 18 or line 22 23.      
24. Multiply line 23 by 15% 24.  
25. Add line 17 and line 23. If line 1 equals the sum of lines 21 and 23, then skip lines 26 through 36 and go to line 37. 25.          
26. Subtract line 25 from line 16 26.      
27. Multiply line 26 by 20% 27.  
28. Enter the smaller of line 3 or line 6 28.          
29. Add lines 4 and 14 29.              
30. Enter the amount from line 1 above 30.              
31. Subtract line 30 from line 29. If zero or less, enter -0- 31.          
32. Subtract line 31 from line 28. If zero or less, enter -0- 32.      
33. Multiply line 32 by 25% (.25) 33.  
  Note. If line 5 is zero or blank, skip lines 34 through 36 and go to line 37.    
34. Add lines 14, 15, 23, 26, and 32 34.      
35. Subtract line 34 from line 1 35.      

Worksheet 2-7. 2014 Estimated Tax Worksheet—Line 6 Qualified Dividends and Capital Gain Tax Worksheet(Continued)

36. Multiply line 35 by 28% (.28) 36.  
37. Figure the tax on the amount on line 14 from the 2014 Tax Rate Schedules 37.  
38. Add lines 24, 27, 33, 36, and 37 38.  
39. Figure the tax on the amount on line 1 from the 2014 Tax Rate Schedules 39.  
40. Tax on all taxable income (including capital gains and qualified dividends). Enter the smaller of line 38  
or line 39 here and on line 6 of the 2014 Estimated Tax Worksheet (Worksheet 2-1) (or line 4 of Worksheet 2-8)
40.  
1 If you expect to deduct investment interest expense, do not include on this line any qualified dividends or net capital gain that you will elect to treat as investment income.  
2 This includes a section 1202 exclusion from eligible gain on qualified small business stock and gain or loss from the sale or exchange of collectibles. See the Instructions for Schedule D (Form 1040) for more information.

Worksheet 2-8.2014 Estimated Tax Worksheet—Line 6 Foreign Earned Income Tax Worksheet

Before you begin: If line 5 of your 2014 Estimated Tax Worksheet (Worksheet 2-1) is zero, do not complete this worksheet.
1. Enter the amount from line 5 of your 2014 Estimated Tax Worksheet (Worksheet 2–1) 1.  
2. Enter the total foreign earned income and housing amount you (and your spouse if filing jointly) expect to exclude or deduct in 2014 on Form 2555 or Form 2555-EZ 2.  
3. Add lines 1 and 2 3.  
4. Tax on the amount on line 3. Use the 2014 Tax Rate Schedules or Worksheet 2-7*, as appropriate 4.  
5. Tax on the amount on line 2. Use the 2014 Tax Rate Schedules 5.  
6. Subtract line 5 from line 4. Enter the result here and on line 6 of your 2014 Estimated Tax Worksheet (Worksheet 2–1). If zero or less, enter -0- 6.  
                 
*If using Worksheet 2-7 (Qualified Dividends and Capital Gain Tax Worksheet), enter the amount from line 3 above on line 1 of Worksheet 2-7. Complete Worksheet 2-7 through line 9. Next, determine if you have a capital gain excess.
Figuring capital gain excess. To find out if you have a capital gain excess, subtract line 5 of your 2014 Estimated Tax Worksheet (Worksheet 2-1) from line 9 of Worksheet 2-7. If the result is more than zero, that amount is your capital gain excess.
No capital gain excess. If you do not have a capital gain excess, complete the rest of Worksheet 2-7 according to its instructions. Then complete lines 5 and 6 above.
Capital gain excess. If you have a capital gain excess, complete a second Worksheet 2-7 as instructed above but in its entirety and with the following additional modifications. Then complete lines 5 and 6 above.
  Make these modifications only for purposes of filling out Worksheet 2-8.
  a. Reduce (but not below zero) the amount you otherwise would enter on line 3 of Worksheet 2-7 by your capital  
gain excess.
  b. Reduce (but not below zero) the amount you otherwise would enter on line 2 of Worksheet 2-7 by any of your  
capital gain excess not used in (a) above.
  c. Reduce (but not below zero) the amount you otherwise would enter on line 5 of Worksheet 2-7 by your capital  
gain excess.
  d. Reduce (but not below zero) the amount you otherwise would enter on line 6 of Worksheet 2-7 by your capital  
gain excess.

Worksheet 2-9.2014 Annualized Estimated Tax Worksheet

Note. For instructions, see Annualized Income Installment Method.

Before you begin:Complete the 2014 Estimated Tax Worksheet — Worksheet 2-1 
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):  
2/28/2014, 4/30/2014, 7/31/2014, 11/30/2014.
(a)  
1/1/14-3/31/14
(b)  
1/1/14-5/31/14
(c)  
1/1/14-8/31/14
(d)  
1/1/14-12/31/14
1. Adjusted 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.        
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 (if line 3 is more than $152,525, see instructions and Worksheet 2-10) 6.        
7. Standard deduction from Worksheet 2-4 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 $3,950 by your total expected number of exemptions (if line 3 is more than $152,525, see instructions and Worksheet 2-11) (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. Self-employment tax from line 41 of Section B 17.        
18. Enter other taxes for each period, including, if applicable, Additional Medicare Tax and/or NIIT (see instructions) 18.        
19. Total tax. Add lines 16, 17, and 18 18.        
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 your 2014 Estimated Tax Worksheet (Worksheet 2-1) 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.        

Worksheet 2-9. 2014 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)  
1/1/14-3/31/14
(b)  
1/1/14-5/31/14
(c)  
1/1/14-8/31/14
(d)  
1/1/14-12/31/14
33 Net earnings from self-employment for the period (see instructions) 33        
34 Prorated social security tax limit 34 $29,250 $48,750 $78,000 $117,000
35 Enter actual wages for the period subject to social security tax or the 6.2% portion of the 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 0.496 0.2976 0.186 0.124
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 Annualization amounts 42 8 4.8 3 2
43 Deduction for self-employment tax. Divide line 41 by line 42. Enter the result here. Use this result to figure your AGI on line 1 43        
   
   

Worksheet 2-10. 2014 Annualized Estimated Tax Worksheet—Line 6 Phaseout of Itemized Deductions

1. Enter line 4 of the 2014 Annualized ES Worksheet, Section A (Worksheet 2-9) 1.  
2. Enter the total amount included on line 1 above for medical and dental expenses, investment interest, casualty or theft losses, and gambling losses (after applying the same limits used in line 1) 2.  
3. Subtract line 2 from line 1 3.  
4. Enter line 5 of the 2014 Annualized ES Worksheet, Section A (Worksheet 2-9) 4.  
5. Multiply line 1 by line 4 5.  
  Note. If line 3 is zero or less, your deduction is not limited. Stop here and enter the amount from line 5 above on line 6 of the 2014 Annualized ES Worksheet, Section A (Worksheet 2-9).    
6. Multiply line 3 by line 4 6.  
7. Multiply line 6 by 80% 7.      
8. Enter line 3 of the 2014 Annualized ES Worksheet, Section A (Worksheet 2-9) 8.      
9. Enter $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 9.      
10. Subtract line 9 from line 8. 10.      
  Note. If line 10 is zero or less, your deduction is not limited. Stop here and enter the amount from line 5 above on line 6 of the 2014 Annualized ES Worksheet, Section A (Worksheet 2-9).        
11. Multiply line 10 by 3% (.03) 11.      
12. Enter the smaller of line 7 or line 11 12.  
13. Total Itemized Deductions. Subtract line 12 from line 5. Enter the result here and in the appropriate column of the 2014 Annualized ES Worksheet, Section A, line 6 (Worksheet 2-9) 13.  
 

Worksheet 2-11. 2014 Annualized Estimated Tax Worksheet—Line 10 Reduction of Exemption Amount

1. Multiply $3,950 by the number of exemptions you plan to claim 1.  
2. Enter line 3 of the 2014 Annualized ES Worksheet, Section A (Worksheet 2-9) 2.  
3. Enter the amount shown below for your filing status: 
$254,200 if single, 
$305,050 if married filing jointly or qualifying widow(er), 
$152,525 if married filing separately, or 
$279,650 if head of household
3.      
4. Subtract line 3 from line 2 4.      
5. Is line 4 more than $122,500 (more than $61,250 if married filing separately)? 
Yes. You can not take a deduction for exemptions. 
No. Divide line 4 by $2,500 ($1,250 if married filing separately). If the result is not a whole number, increase it to the next highest whole number (for example, increase 0.0004 to 1)
5.      
6. Multiply line 5 by 2% (.02). Enter the result as a decimal 6.  
7. Multiply line 1 by line 6 7.  
8. Deduction for exemptions. Subtract line 7 from line 1. Enter the result here and in the appropriate column of the 2014 Annualized ES Worksheet, Section A, line 10 (Worksheet 2-9) 8.  
 

Worksheet 2-12. 2014 Annualized Estimated Tax Worksheet—Line 12 Qualified Dividends and Capital Gain Tax Worksheet

Note. To figure the annualized entries for lines 2, 3, 5, and 6 below, multiply the expected amount for the period by the annualization amount on line 2 of Worksheet 2-9 for the same period.
                   
1. Enter the amount from the appropriate worksheet.
  • Line 11 of your 2014 Annualized Estimated Tax Worksheet  
    (Worksheet 2-9)

  • Line 3 of Worksheet 2-13 (use if you will exclude or deduct foreign earned income or housing)

1.          
2. Enter your annualized qualified dividends expected for 2014 1 2.              
3. Enter your annualized net capital gain expected  
for 2014 1
3.              
4. Add lines 2 and 3 4.          
5. Enter your annualized 28% rate gain or loss expected for 2014 2 5.              
6. Enter your annualized unrecaptured section 1250 gain expected for 2014 6.              
7. Add lines 5 and 6 7.              
8. Enter the smaller of line 3 or line 7 8.          
9. Subtract line 8 from line 4 9.          
10. Subtract line 9 from line 1. If zero or less, enter -0- 10.          
11. Enter the smaller of line 1 or $73,800 ($36,900 if single or married filing separately, or $49,400 if head of household) 11.              
12. Enter the smaller of line 10 or line 11 12.              
13. Subtract line 4 from line 1. If zero or less,  
enter -0-
 
13.
 
           
14. Enter the larger of line 12 or line 13 14.      
  Note. If line 11 and line 12 are the same, skip line 15 and go to line 16.        
15. Subtract line 12 from line 11. This is the amount taxed at 0% 15.      
  Note. If lines 1 and 11 are the same, skip lines 16 through 36 and go to line 37.        
16. Enter the smaller of line 1 or line 9 16.          
17. Enter the amount from line 15. If line 15 is blank, enter -0- 17.          
18. Subtract line 17 from line 16. If zero or less, enter -0- 18.          
19. Enter 
  • $406,750 if single,

  • $228,800 if married filing separately,

  • $457,600 if married filing jointly or qualifying widow(er), or

  • $432,200 if head of household

19.          
20. Enter the smaller of line 1 or line 19 20.          
21. Add lines 14 and 15 21.              
22. Subtract line 21 from line 20, if zero or less enter -0- 22.              
23. Enter the smaller of line 18 or line 22 23.      
24. Multiply line 23 by 15% 24.  
25. Add line 17 and line 23. If line 1 equals the sum of lines 21 and 23, then skip lines 26 through 36 and go to line 37 25.          
26. Subtract line 25 from line 16 26.      
27. Multiply line 26 by 20% 27.  
28. Enter the smaller of line 3 or line 6 28.          
29. Add lines 4 and 14 29.              
30. Enter the amount from line 1 above 30.              
31. Subtract line 30 from line 29. If zero or less, enter -0- 31.          
32. Subtract line 31 from line 28. If zero or less, enter -0- 32.      
33. Multiply line 32 by 25% (.25) 33.  
  Note. If line 5 is zero or blank, skip lines 34 through 36 and go to line 37.    
34. Add lines 14, 15, 23, 26, and 32 34.      
35. Subtract line 34 from line 1 35.      

Worksheet 2-12. 2014 Annualized Estimated Tax Worksheet—Line 12 Qualified Dividends and Capital Gain Tax Worksheet (Continued)

36. Multiply line 35 by 28% (.28) 36.  
37. Figure the tax on the amount on line 14 from the 2014 Tax Rate Schedules 37.  
38. Add lines 24, 27, 33, 36, and 37 38.  
39. Figure the tax on the amount on line 1 from the 2014 Tax Rate Schedules 39.  
40. Tax on all taxable income (including capital gains and qualified dividends). Enter the smaller of line 38 or  
line 39 here and on line 12 of the appropriate column of the 2014 Annualized Estimated Tax Worksheet (or line 4 of  
Worksheet 2-13)
40.  
1 If you expect to deduct investment interest expense, do not include on this line any qualified dividends or net capital gain that you will elect to treat as investment income. 
2 This includes a section 1202 exclusion from eligible gain on qualified small business stock and gain or loss from the sale or exchange of collectibles. See the Instructions for Schedule D (Form 1040) for more information.

Worksheet 2-13.2014 Annualized Estimated Tax Worksheet—Line 12 Foreign Earned Income Tax Worksheet

Before you begin: If line 11 of Worksheet 2-9 (2014 Annualized Estimated Tax Worksheet) is zero for the period, do not complete this worksheet.
1. Enter the amount from line 11 of your 2014 Annualized Estimated Tax Worksheet for the period 1.  
2. Enter the annualized amount* of foreign earned income and housing amount you (and your spouse if filing jointly) expect to exclude or deduct for the period on Form 2555 or Form 2555-EZ 2.  
3. Add lines 1 and 2 3.  
4. Tax on the amount on line 3. Use the 2014 Tax Rate Schedules or Worksheet 2-12**, as appropriate 4.  
5. Tax on the amount on line 2. Use the 2014 Tax Rate Schedules 5.  
6. Subtract line 5 from line 4. Enter the result here and on line 12 of your 2014 Annualized Estimated Tax Worksheet (Worksheet 2-9). If zero or less, enter -0- 6.  
                 
* To figure the annualized amount for line 2, multiply the expected exclusion for the period by the annualization amount  
on line 2 of Worksheet 2-9 for the same period.
** If using Worksheet 2-12 (Qualified Dividends and Capital Gain Tax Worksheet), enter the amount from line 3 above on  
line 1 of Worksheet 2-12. Complete Worksheet 2-12 through line 9. Next, determine if you have a capital gain excess.
Figuring capital gain excess. To find out if you have a capital gain excess for the appropriate period, subtract line 11  
of Worksheet 2-9 from line 9 of Worksheet 2-12. If the result is more than zero, that amount is your capital gain excess.
No capital gain excess. If you do not have a capital gain excess, complete the rest of Worksheet 2-12 according to its instructions. Then complete lines 5 and 6 above.
Capital gain excess. If you have a capital gain excess, complete a second Worksheet 2-12 as instructed above but in its entirety and with the following additional modifications. Then complete lines 5 and 6 above.
  Make these modifications only for purposes of filling out Worksheet 2-13.
  a. Reduce (but not below zero) the amount you otherwise would enter on line 3 of Worksheet 2-12 by your capital gain excess.
  b. Reduce (but not below zero) the amount you otherwise would enter on line 2 of Worksheet 2-12 by any of your capital gain excess not used in (a) above.
  c. Reduce (but not below zero) the amount you otherwise would enter on line 5 of Worksheet 2-12 by your capital gain excess.
  d. Reduce (but not below zero) the amount you otherwise would enter on line 6 of Worksheet 2-12 by your capital gain excess.

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