Publication 505 (01/2011), Tax Withholding and Estimated Tax

IRS Resources

2. Estimated Tax for 2011

Table of Contents

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 on page 22), 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 2010 tax return and an estimate of your 2011 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 Table 2-2 on page 32 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 2011 if you meet all three of the following conditions.

You had no tax liability for 2010.
You were a U.S. citizen or resident alien for the whole year.
Your 2010 tax year covered a 12-month period.

You had no tax liability for 2010 if your total tax (defined on page 21 under Total tax for 2010—line 14b ) was zero or you did not have to file an income tax return.

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 2010, you may have to pay estimated tax for 2011.

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 2011 if both of the following apply.

You expect to owe at least $1,000 in tax for 2011, after subtracting your withholding and refundable credits.
You expect your withholding and refundable credits to be less than the smaller of:
1. 90% of the tax to be shown on your 2011 tax return, or
2. 100% of the tax shown on your 2010 tax return. Your 2010 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 beginning on page 18.

If the result from using the general rule above suggests that you will not have enough withholding, complete the 2011 Estimated Tax Worksheet on page 20 for a more accurate calculation.

Figure 2-A (see page 18) 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.

To figure whether she should pay estimated tax for 2011, Jane uses Figure 2-A and the following information. She files as head of household and expects no refundable credits in 2011.

Expected adjusted gross income (AGI) for 2011	$82,800
AGI for 2010	$73,700
Total tax on 2010 return (Form 1040, line 60)	$ 9,354
Total 2011 estimated tax (line 13c of the 2011 Estimated Tax Worksheet)	$11,493
Tax expected to be withheld in 2011	$10,450

Jane's answer to Figure 2-A, box 1, is YES; she expects to owe at least $1,000 for 2011 after subtracting her withholding from her expected total tax ($11,493 − $10,450 = $1,043). Her answer to box 2a is YES; she expects her income tax withholding ($10,450) to be at least 90% of the tax to be shown on her 2011 return ($11,493 × 90% = $10,344). Jane does not need to pay estimated tax.

Example 2.

The facts are the same as in Example 1, except that Jane expects only $9,200 tax to be withheld in 2011. Because that is less than $10,450, her answer to box 2a is NO.

Jane's answer to box 2b is also NO; she does not expect her income tax withholding ($9,200) to be at least 100% of the total tax shown on her 2010 return ($9,354). Jane must increase her withholding or pay estimated tax for 2011.

Example 3.

The facts are the same as in Example 2, except that the total tax shown on Jane's 2010 return was $9,000. Because she expects to have more than $9,000 withheld in 2011 ($9,200), her answer to box 2b is YES. Jane does not need to pay estimated tax for 2011.

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 qualify to 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, or
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.

If you do not qualify to 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 2011.

2010 separate returns and 2011 joint return. If you plan to file a joint return with your spouse for 2011, but you filed separate returns for 2010, your 2010 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.

2010 joint return and 2011 separate returns. If you plan to file a separate return for 2011, but you filed a joint return for 2010, your 2010 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 2010 using the same filing status as for 2011. 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 2010 showing taxable income of $48,500 and a tax of $6,441. Of the $48,500 taxable income, $40,100 was Joe's and the rest was Heather's. For 2011, they plan to file married filing separately. Joe figures his share of the tax on the 2010 joint return as follows:

Tax on $40,100 based on separate return		$6,213
Tax on $8,400 based on separate return		845
Total		$7,058
Joe's percentage of total ($6,213 ÷ $7,058)		88%
Joe's share of tax on joint return ($6,441 × 88%)		$5,668

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 2010 or 2011 is from farming or fishing, substitute 66²/₃% for 90% in (2a) under General Rule on the previous page.

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 2010 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 2010, gross income from farming is the total of the following amounts.

Schedule F (Form 1040), Profit or Loss From Farming, line 11.
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), Box 14, code B; Schedule K-1 (Form 1120S), Box 17, code U; or Schedule K-1 (Form 1041), Box 14, code F.
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, line 7.
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), Box 14, code B; Schedule K-1 (Form 1120S), Box 17, code U; or Schedule K-1 (Form 1041), Box 14, code F.
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 2010 was more than $150,000 ($75,000 if your filing status for 2011 is married filing a separate return), substitute 110% for 100% in (2b) under General Rule on page 17.

For 2010, 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.

See Publication 519 for more information about Form 1040-ES (NR) and withholding (chapter 8) and the substantial presence test (chapter 1).

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 2011 estimated tax, it may be helpful to use your income, deductions, and credits for 2010 as a starting point. Use your 2010 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. For 2011, there are several changes in the law. Some of these changes are discussed under What's New for 2011 beginning on page 2. 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.

2011 Estimated Tax Worksheet

Use the worksheet Figure 2-B on page 20 to help guide you through the information about completing the 2011 Estimated Tax Worksheet. You also will find a blank worksheet on page 33.

This image is too large to be displayed in the current screen. Please click the link to view the image.

Figure 2-B, 2011 Estimated Tax Worksheet

Expected AGI—Line 1

Your expected AGI for 2011 (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 2011 that, if you had received it in 2010, would have been included on your 2010 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 2011, use Worksheet 2-1 on page 35 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 2011 tax return. If you are using your 2010 return as a guide and filed Form 1040, your adjustments for 2010 were on lines 23 through 35, plus any write-in adjustments on line 36. If you filed Form 1040A, your 2010 adjustments were on lines 16 through 19.

Self-employed. If you expect to have income from self-employment, use Worksheet 2-2 on page 36 to figure your expected self-employment tax and your allowable deduction for self-employment tax. Include the amount from line 11 of Worksheet 2-2 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 2011 (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 2011 tax return, enter the estimated amount on line 2.

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

Standard deduction—line 2. If you expect to claim the standard deduction on your 2011 tax return, enter the amount on line 2. Use Worksheet 2-3 on page 37 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 $3,700 for each exemption you expect to take on your 2011 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.

Expected Taxes and Credits—Lines 6–13c

After you have figured your expected taxable income (line 5), follow the steps below to figure your expected taxes, credits, and total tax for 2011. 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 2011 Tax Rate Schedules, found on page 34 or in the instructions to Form 1040-ES, to figure your expected income tax.

Example.

If line 5 is $35,000 and your filing status is single, you would use Schedule X of the 2011 Tax Rate Schedules. Your income is over $34,500 but less than $83,600. Subtract $34,500 from $35,000. Multiply $500 ($35,000 – 34,500) by 25% (500 × .25 = $125). Add $125 to $4,750. Enter $4,875 on line 6.

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 $1,900 of investment income.

Children under age 18 at the end of 2011.
The following children if their earned income is not more than half their support.
1. Children age 18 at the end of 2011.
2. Children who are full-time students over age 18 and under age 24 at the end of 2011.

See Publication 929, Tax Rules for Children and Dependents. Although the ages and dollar amounts in the publication may be different in the 2011 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 qualified dividends. Generally, the maximum tax rate for qualified dividends is 15% (0% for people whose other income is taxed at the 10% or 15% rate).

Tax on capital gain and qualified dividends. If the amount on line 1 includes a net capital gain or qualified dividends, use Worksheet 2-4 on page 38 to figure your tax.

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 2-5 on page 39 to figure your estimated tax.

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

Your tax on line 6.
Your expected alternative minimum tax (AMT) on line 7 from Form 6251, line 35, or included on Form 1040A, line 28.
Your expected additional taxes from Form 8814, Parents' Election To Report Child's Interest and Dividends, and Form 4972, Tax on Lump-Sum Distributions.
Any recapture of education credits.

Step 3. Subtract your expected credits (line 9). If you are using your 2010 return as a guide and filed Form 1040, your total credits for 2010 were shown on line 54. If you filed Form 1040A, your total credits for 2010 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 on page 19).

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

Other taxes include the following.

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.
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.
Amounts written in on Form 1040 on the line for “total tax” (line 60 on the 2010 Form 1040). But, do not include recapture of a federal mortgage subsidy; tax on excess golden parachute payments; look-back interest due under section 167(g) or 460(b) of the Internal Revenue Code; excise tax on insider stock compensation from an expatriated corporation; uncollected social security 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.
Repayment of the first-time homebuyer credit. See Form 5405.

Step 6. Subtract your refundable credits (line 13b). These include your expected earned income credit, Form 8812 additional child tax credit, Form 8863 refundable American opportunity credit, Form 4136 fuel tax credit, Form 5405 first-time homebuyer credit, Form 8839 adoption credit, Form 8801 refundable credit for prior year minimum tax, and Form 8885 health coverage tax credit. These are shown on the 2010 Form 1040, lines 64a, 65, 66, 67, 70, and 71 (boxes b, c, and d).

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.

If you filed Form 1040A in 2010, the credits (earned income credit, additional child tax credit, and refundable American opportunity credit) were shown on lines 41a, 42, and 43.

The result of steps 1 through 6 is your total estimated tax for 2011 (line 13c).

Required Annual Payment— Line 14c

On lines 14a through 14c, figure the total amount you must pay for 2011, through withholding and estimated tax payments, to avoid paying a penalty.

General rule. The total amount you must pay is the smaller of:

90% of your total expected tax for 2011, or
100% of the total tax shown on your 2010 return. Your 2010 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 2010 was more than $150,000 ($75,000 if your filing status for 2011 is married filing separately), substitute 110% for 100% in (2) above. This rule does not apply to farmers and fishermen.

For 2010, 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 2010 return was $42,581, and his expected tax for 2011 is $71,253. His 2010 AGI was $180,000. Because Jeremy had more than $150,000 of AGI in 2010, he figures his required annual payment as follows. He determines that 90% of his expected tax for 2011 is $64,128 (.90 × $71,253). Next, he determines that 110% of the tax shown on his 2010 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 2010 or 2011 is from farming or fishing, your required annual payment is the smaller of:

66²/₃% (.6667) of your total tax for 2011, or
100% of the total tax shown on your 2010 return. (Your 2010 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 on page 18.

Total tax for 2010—line 14b. Your 2010 total tax, if you filed Form 1040, is the amount on line 60 reduced by the following.

Unreported social security and Medicare tax or RRTA tax from Forms 4137 or 8919 (line 57).
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.
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”).
Any refundable credit amounts listed on lines 63, 64a, 65, 66, 67, 70, and 71 (boxes b, c, and d).

If you filed Form 1040A, your 2010 total tax is the amount on line 37 reduced by any refundable credits on lines 40, 41a, 42, and 43.

If you filed Form 1040EZ, your 2010 total tax is the amount on line 11 reduced by the amount on lines 8 and 9a.

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 2011. 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 on this page.

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 2011 (line 15) includes the income tax you expect to be withheld from all sources (wages, pensions and annuities, etc.). It also includes excess social security and railroad retirement tax you expect to be withheld from your wages.

For this purpose, you will have excess social security or tier 1 railroad retirement tax withholding for 2011 only if your wages from two or more employers are more than $106,800. See Excess Social Security or Railroad Retirement Tax Withholding in chapter 3.

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 15
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 on this page.

²See January payment below.

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 Saturday, Sunday, or a holiday.

In 2011, April 15 is Friday and a holiday in the District of Columbia; therefore the payment is due Monday, April 18. In 2012, January 15 is a Sunday and Monday is a holiday. The January 15 payment is due by January 17, 2012.

January payment. If you file your 2011 Form 1040 or Form 1040A by January 31, 2012, and pay the rest of the tax you owe, you do not need to make the payment due on January 17, 2012.

Example.

Janet Adams does not pay any estimated tax for 2011. She files her 2011 income tax return and pays the balance due shown on her return on January 26, 2012.

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, 2012.

Fiscal year taxpayers. If your tax year does not start on January 1, your payment due dates are:

The 15th day of the 4th month of your fiscal year,
The 15th day of the 6th month of your fiscal year,
The 15th day of the 9th month of your fiscal year, and
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 can pay all your estimated tax at that time, or you can 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.

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 15
		Sept. 15
		Jan. 15 next year
April 1–May 31	June 15	Sept. 15
		Jan. 15 next year
June 1–Aug. 31	Sept. 15	Jan. 15 next year
After Aug. 31	Jan. 15 next year	(None)

*See January payment and Saturday, Sunday, holiday rule on this page.

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 below.

Farmers and Fishermen

If at least two-thirds of your gross income for 2010 or 2011 is from farming or fishing, you have only one payment due date for your 2011 estimated tax, January 17, 2012. The due dates for the first three payment periods, discussed under When To Pay Estimated Tax on this page, do not apply to you.

If you file your 2011 Form 1040 by March 1, 2012, 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.

2010 rollovers or conversions to a Roth IRA or account. If you did not elect to include the taxable amount of your 2010 rollover or conversion to a Roth IRA or account in your 2010 income, you must report half the income in 2011 and half in 2012. For estimated tax purposes, the income from the 2010 rollover or conversion that you must report in 2011 and 2012 will be treated as having been received in an equal amount for each quarter of 2011 and 2012.

Regular Installment Method

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

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 on this page.

Amended estimated tax. If you refigure your estimated tax during the year, or if your first estimated tax payment is due after April 18, 2011, figure your required payment for each remaining payment period using Worksheet 2-9 on page 43.

Example.

Early in 2011, Mira Roberts figures that her estimated tax due is $1,800. She makes estimated tax payments on April 18 and June 15 of $450 each ($1,800 ÷ 4).

On July 10, she sells investment property at a gain. Her refigured estimated tax is $4,100. Her required estimated tax payment for the third payment period is $2,175, as shown in her filled-in Worksheet 2-9 below.

If Mira's estimated tax does not change again, her required estimated tax payment for the fourth payment period will be $1,025.

Worksheet 2-9.Amended Estimated Tax Worksheet—Illustrated


1.	Amended total estimated tax due			1.	$4,100
2.	Multiply line 1 by:
	50% (.50) if next payment is due June 15, 2011
	75% (.75) if next payment is due September 15, 2011
	100% (1.00) if next payment is due January 17, 2012	2.	3,075
3.	Estimated tax payments for all previous 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 17, 2012, stop here.* Otherwise, go to line 5.*
5.	Add lines 3 and 4			5.	3,075
6.	Subtract line 5 from line 1 and enter the result (but not less than zero)			6.	1,025
7.	Each following required payment: If the payment on line 4 is due June 15, 2011, enter one-half of the amount on line 6 here and on the payment vouchers for your payments due September 15, 2011, and January 17, 2012. If the amount on line 4 is due September 15, 2011, enter the full amount on line 6 here and on the payment voucher for your payment due January 17, 2012			7.	$1,025

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 2011 Annualized Estimated Tax Worksheet (Worksheet 2-6) beginning on page 40.

You first must complete the 2011 Estimated Tax Worksheet through line 16b. (See page 33 for a blank worksheet.)

Use the result you figure on line 32 of the 2011 Annualized Estimated Tax Worksheet to make your estimated tax payments and complete your payment vouchers.

See Example 2, beginning on page 28 to see how the worksheet is completed.

Note.

If you use the annualized income installment method to figure your estimated tax payments, you must file Form 2210 with your 2011 tax return. See Annualized Income Installment Method (Schedule AI) in chapter 4 for more information.

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

Use Figure 2-C, beginning on page 25, to help you follow these instructions. Another worksheet is available for your use on pages 40 and 41.

The purpose of this worksheet is to determine your estimated tax liability as your income accumulates throughout the year, rather than dividing your entire year's estimated tax liability by four as if your income was earned equally throughout the year. The top of the worksheet (see page 25) shows the dates for each payment period. The periods build; that is, each period includes all previous periods. After the end of each payment period, complete the corresponding worksheet column to figure the payment due for that period.

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 on page 19.

2010 rollovers or conversions to Roth IRA or account. If you elected to report half the income in 2011 and half in 2012, treat that income as received in an equal amount for each quarter.

Self-employment income. If you had self-employment income, first complete Section B of this worksheet. Use the amounts on line 46 when figuring your expected AGI to enter in each column of Section A, line 1.

Line 4. Be sure to consider all deduction limits figured on Schedule A (Form 1040), such as reducing your medical expenses by 7.5% of your AGI, or reducing certain miscellaneous deductions by 2% of your AGI. Figure your deduction limits using your expected AGI in the corresponding column of line 1 (2011 Annualized Estimated Tax Worksheet (Worksheet 2-6)).

Line 6. Multiply line 4 by line 5 and enter the result on line 6.

Line 7. If you will not itemize your deductions, use Worksheet 2-3 (see page 37) to figure your standard deduction.

Line 10. Multiply $3,700 by your total expected exemptions and enter the result on line 10.

Line 12. Generally, you will use the 2011 Tax Rate Schedules on page 34 or in the instructions to Form 1040-ES to figure the tax on your annualized income. However, see below for situations where you must use a different method to compute your estimated tax.

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 $1,900 of investment income.

Children under age 18 at the end of 2011.
The following children if their earned income is not more than half their support.
1. Children age 18 at the end of 2011.
2. Children who are full-time students over age 18 and under age 24 at the end of 2011.

See Publication 929.

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. Generally, the maximum tax rate for qualified dividends is 15% (0% for people whose other income is taxed at the 10% or 15% rate).

Tax on capital gain or qualified dividends. If the amount on line 1 includes a net capital gain or qualified dividends, use Worksheet 2-7 on page 42 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 2010 return.

Use the 2010 forms or worksheets to see if you will owe any of the taxes discussed above. Figure the tax based on your income and deductions during the period shown in the column headings. Multiply this amount by the annualization amounts shown for each column on line 2 of the 2011 Annualized Estimated Tax Worksheet (Worksheet 2-6). Enter the result on line 13 of this worksheet.

Line 15. Include all the nonrefundable credits you expect to claim because of events that will occur during the period. If you are using your 2010 return as a guide and filed Form 1040, your 2010 credits were entered on lines 47 through 53. If you filed Form 1040A, your credits were on lines 29 through 33.

Note.

When figuring your credits for each period, annualize any item of income or deduction to figure each credit. For example, if you need to use your AGI to figure a credit, use line 3 of Worksheet 2-6 to figure the credit for each column.

Line 17. Enter your self-employment tax for the period from Section B, line 41.

Line 18. Add your expected other taxes.

Other taxes include the following.

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.
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.
Amounts on Form 1040 written in on the line for “total tax” (line 60 on the 2010 Form 1040). But do not include recapture of a federal mortgage subsidy; tax on excess golden parachute payments; look-back interest due under section 167(g) or 460(b) of the Internal Revenue Code; excise tax on insider stock compensation from an expatriated corporation; uncollected social security, Medicare, or RRTA tax on tips or group-term life insurance; or additional tax on advance payments of health coverage tax credit when not eligible.
Repayment of the first-time homebuyer credit if the home will cease to be your main home in 2011. See Form 5405 for exceptions.

Line 20. Include all the refundable credits (other than withholding credits) you can claim because of events that occurred during the period. If you are using your 2010 return as a guide and filed Form 1040, include the credits on lines 64a, 65, 66, 67, 70 (boxes b, c, and d), and 71. If you filed Form 1040A, include the credits on lines 41a, 42, and 43. If you filed Form 1040EZ, include line 9a.

Note.

When figuring your refundable credits for each period, annualize any item of income or deduction used to figure each credit.

Line 29. If line 28 is smaller than line 25 and you are not certain of the estimate of your 2011 tax, you can avoid a penalty by entering the amount from line 25 on line 29.

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 2011 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 on page 22.

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.

Skip column (a).
On line 1, enter your income for the period that is effectively connected with a U.S. trade or business.
On line 21, increase your entry by the amount determined by multiplying your income for the period that is not effectively connected with a U.S. trade or business by the following.
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.
On line 26, enter one-half of the amount from line 16c of the Form 1040-ES (NR) 2011 Estimated Tax Worksheet in column (b), and one-fourth in columns (c) and (d).
On lines 24 and 27, skip column (b).
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.

Figure 2-C. Annualized Income Installment Method

Worksheet 2-6.2011 Annualized Estimated Tax Worksheet
Note.For instructions, see Annualized Income Installment Method beginning on page 23.

Section A (For Figuring Your Annualized Estimated Tax Payments)—Complete each column after end of period shown.
Estates and trusts: Use the following ending dates in columns (a) through (d): 2/28/2011, 4/30/2011, 7/31/2011, 11/30/2011.			(a) 1/1/11-3/31/11	(b) 1/1/11-5/31/11	(c) 1/1/11-8/31/11	(d) 1/1/11-12/31/11
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 (see instructions)	6
7	Standard deduction from Worksheet 2-3	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 $3,700 by your total expected number of exemptions (see instructions). (Estates and trusts, see instructions)	10
11	Subtract line 10 from line 9. If zero or less, enter -0-	11
12	Figure your tax on the amount on line 11 (see instructions)	12
13	For each period, enter any tax from Forms 8814, 4972, and 6251. Also include any recapture of education credits (see instructions)	13
14	Add lines 12 and 13	14
15	Enter nonrefundable credits for each period (see instructions)	15
16	Subtract line 15 from line 14	16
17	Self-employment tax from line 41 of Section B	17
18	Enter other taxes for each period (see instructions)	18
19	Total tax. Add lines 16, 17, and 18	19
20	Enter refundable credits for each period (see instructions for type of credits allowed). Do not include any income tax withholding on this line	20
21	Subtract line 20 from line 19. If zero or less, enter -0-	21
22	Applicable percentage	22	22.5%	45%	67.5%	90%
23	Multiply line 21 by line 22	23
	Complete lines 24 through 29 of one column before going to line 24 of the next column.
24	Enter the total of the amounts in all previous columns of line 29	24
25	Annualized income installment. Subtract line 24 from line 23. If zero or less, enter -0-	25
26	Enter 25% (.25) of line 14c of the Form 1040-ES Estimated Tax Worksheet in each column	26
27	Subtract line 29 of the previous column from line 28 of that column	27
28	Add lines 26 and 27	28
29	Enter the smaller of line 25 or line 28 (see instructions)	29
30	Total required payments for the period. Add lines 24 and 29	30
31	Estimated tax payments made (line 32 of all previous columns) plus tax withholding through the due date for the period (see instructions)	31
32	Estimated tax payment required by the next due date. Subtract line 31 from line 30 and enter the result (but not less than zero) here and on your payment voucher	32

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

Worksheet 2-6.2011 Annualized Estimated Tax Worksheet(Continued)

Section B (For Figuring Your Annualized Estimated Self-Employment Tax)—Complete each column after end of period shown.
(Form 1040 filers only)			(a) 1/1/11-3/31/11	(b) 1/1/11-5/31/11	(c) 1/1/11-8/31/11	(d) 1/1/11-12/31/11
33	Net earnings from self-employment for the period (see instructions)	33
34	Prorated social security tax limit	34	$26,700	$44,500	$71,200	$106,800
35	Enter actual wages for the period subject to social security tax or the 4.2% portion of tier 1 railroad retirement tax. Exception: If you file Form 4137 or Form 8919, see instructions	35
36	Subtract line 35 from line 34. If zero or less, enter -0-	36
37	Annualization amounts	37	0.416	0.2496	0.156	0.104
38	Multiply line 37 by the smaller of line 33 or line 36	38
39	Annualization amounts	39	0.116	0.0696	0.0435	0.029
40	Multiply line 33 by line 39	40
41	Add lines 38 and 40. Enter the result here and on line 17 of Section A	41
42	Multiply line 38 by 59.6% (.596)	42
43	Multiply line 40 by 50% (.50)	43
44	Add lines 42 and 43	44
45	Annualization amounts	45	4	2.4	1.5	1
46	Deduction for self-employment tax. Divide line 44 by line 45. Enter the result here. Use this result to figure your AGI on line 1	46

How To Pay Estimated Tax

There are five ways to pay estimated tax.

Credit an overpayment on your 2010 return to your 2011 estimated tax.
Send in your payment (check or money order) with a payment voucher from Form 1040-ES.
Pay electronically using the Electronic Federal Tax Payment System (EFTPS).
Pay by electronic funds withdrawal (EFW) if you are filing Form 1040 electronically.
Pay by credit or debit card using a pay-by-phone system or the Internet.

Credit an Overpayment

If you show an overpayment of tax after completing your Form 1040 or Form 1040A for 2010, you can apply part or all of it to your estimated tax for 2011. On line 75 of Form 1040, or line 47 of 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 2010 return, treat the credit as a payment made on April 15, 2011.

If you are a beneficiary of an estate or trust, and the trustee elects to credit 2011 trust payments of estimated tax to you, you can treat the amount credited as paid by you on January 15, 2012.

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 2010 tax return, she saw that she had overpaid her taxes by $750. Kathleen knew she would owe additional tax in 2011. She credited $600 of the overpayment to her 2011 estimated tax and had the remaining $150 refunded to her.

In September, she amended her 2010 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 2010 overpayment from $750 to $500. Because the $750 had already been applied to her 2011 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 2011 estimated tax to pay this bill.

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 made estimated tax payments last year and did not use a paid preparer to file your return, you should receive a copy of the 2011 Form 1040-ES in the mail. It will have payment vouchers preprinted with your name, address, and social security number. Using the preprinted vouchers will speed processing, reduce the chance of error, and help save processing costs.

Use the window envelopes that came with your Form 1040-ES package. If you use your own envelopes, 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 in the package 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. Send a clear and concise written statement to the Internal Revenue Service Center where you filed your last return and provide all of the following information.

Your full name (and your spouse's full name).
Your signature (and spouse's signature).
Your old address (and spouse's old address if different).
Your new address.
Your social security number (and spouse's social security number).

You can use Form 8822, Change of Address, for this purpose.

Pay Electronically

For information on paying your estimated taxes electronically, including by credit or debit card, go to www.irs.gov/e-pay.

Illustrated Examples

The following examples show how to figure estimated tax payments under the regular installment method and under the annualized income installment method.

Example 1—Regular Installment Method

Early in 2011, Anne and Larry Jones figure their estimated tax payments for the year. They expect to receive the following income during 2011.

Larry's salary	$39,900
State tax refund (they itemized deductions in 2010)	600
Anne's net profit from self-employment	40,100
Net rental income	6,205
Interest income	2,784
Total	$89,589

They also use the following expected items to figure their 2011 estimated tax.

Adjustment to income for IRA contributions	$ 1,000
Itemized deductions	17,825
Deduction for exemptions ($3,700 × 2)	7,400
Withholding	3,972

The Joneses plan to file a joint return. They use the 2011 Estimated Tax Worksheet included in Form 1040-ES to figure their estimated tax payments. See their filled-in worksheet
(Figure 2-D) on page 29.

Expected AGI. Anne can claim an income tax deduction for part of her self-employment tax as an adjustment to income. So before the Joneses figure their expected AGI, they figure Anne's expected self-employment tax. See their filled-in Worksheet 2-2 on this page.

Worksheet 2-2. 2011 Estimated Tax Worksheet—Lines 1 and 11 Expected Self-Employment Tax and Deduction —Illustrated (Anne Jones)

1.	a.	Enter your expected income and profits subject to self-employment tax*	1a.	$40,100
	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.	40,100
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.	37,032
4.		Multiply line 3 by 2.9% (.029)			4.	1,074
5.		Maximum income subject to social security tax	5.	$106,800
6.		Enter your expected wages (if subject to social security tax or the 4.2% portion of tier 1 railroad retirement tax)	6.	-0-
7.		Subtract line 6 from line 5	7.	106,800
		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.	37,032
9.		Multiply line 8 by 10.4% (.104)			9.	3,851
10.		Add line 4 and line 9. Enter the result here and on line 11 of your 2011 Estimated Tax Worksheet (or line 17 of the Annualized Estimated Tax Worksheet (Worksheet 2-6))			10.	$4,925
11.		Multiply line 4 by 50% (.50)	11.	537
12.		Multiply line 9 by 59.6% (.596)	12.	2,295
13.		Add lines 11 and 12. 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 2011 Estimated Tax Worksheet (or Annualized Estimated Tax Worksheet (Worksheet 2-6))	13.	$2,832

*Your net profit from self-employment is found on Schedule C, line 31; Schedule C-EZ, line 3; Schedule F, line 36; Schedule K-1 (Form 1065), box 14, code A; and Schedule K-1 (Form 1065-B), box 9, code J1.

On line 11 of their 2011 Estimated Tax Worksheet, the Joneses enter $4,925 self-employment tax. They subtract their allowable deduction, $2,832, and their $1,000 adjustment for IRA contributions from their $89,589 total income to find their expected AGI, $85,757. They enter that amount on line 1 of the worksheet.

Expected taxable income. The Joneses use Worksheet 2-3 (see page 37) to figure their standard deduction, $11,600. This is smaller than their expected itemized deductions, so they enter $17,825 on line 2 of the worksheet. They subtract the amount on line 2 from the amount on line 1 and enter the result, $67,932, on line 3. They enter their deduction for exemptions, $7,400, on line 4. After subtracting this amount, their expected taxable income on line 5 is $60,532.

Expected taxes and credits. The Joneses use the 2011 Tax Rate Schedule Y-1 on page 34 to figure their expected income tax, and enter $8,230 on line 6 of the worksheet. They do not expect to owe any other taxes that would be entered on lines 7 or 12. They do not have any other credits that would be entered on lines 9 or 13b.

The Joneses' total estimated tax on line 13c, after adding Anne's self-employment tax from line 11, is $13,155.

Estimated tax. The Joneses multiply their total estimated tax by 90% and enter $11,840 on line 14a of the worksheet. They enter their 2010 tax, $13,123, on line 14b. Their required annual payment on line 14c is the smaller amount, $11,840.

They enter Larry's expected withholding, $3,972, on line 15 and subtract it from their required annual payment. Their estimated tax on line 16a is $7,868.

After completing lines 16a and 16b, the Joneses find they are required to pay estimated tax. This is because their estimated withholding (line 15) is:

Less than their “required annual payment to avoid a penalty” (line 14c), and
Not within $1,000 of their “total 2011 estimated tax” (line 13c).

Required estimated tax payment. The Joneses must pay their first estimated tax payment by April 18, 2011. They enter one-fourth of their estimated tax (line 16a), $2,296, on line 17 of the worksheet and on their Form 1040-ES payment voucher that shows “Due April 18, 2011.” They mail the voucher with their payment to the address shown for their area in the Form 1040-ES instructions and record the payment on the Record of Estimated Tax Payments in the instructions.

If their estimated tax does not change during the year, the Joneses also will pay $2,296 estimated tax by June 15 and September 15, 2011, and January 17, 2012.

Example 2—Annualized Income Installment Method

The facts are the same as in Example 1—Regular Installment Method on the previous page, except that the Joneses do not expect to receive their income evenly throughout the year. Anne expects to receive the largest portion of her self-employment income during the last few months of the year, and the Joneses' rental income is from a vacation home rented only from May to mid-October.

After completing their 2011 Estimated Tax Worksheet, the Joneses decide to use the annualized income installment method to see if they can pay less than $2,296 estimated tax for one or more payment periods. They complete the 2011 Annualized Estimated Tax Worksheet (Worksheet 2-6) in this chapter. See their filled-in worksheet (Figure 2-E) on pages 30 and 31.

First Period

On April 1, 2011, the Joneses complete the first column of the worksheet for the period January 1 through March 31. They had the following income for the period.

Larry's salary	$9,975
State tax refund	600
Anne's net profit from self-employment	3,000
Net rental income	-0-
Interest income	696
Total	$14,271

They also take into account the following items for the period.

Adjustment to income for IRA contributions	$ 150
Itemized deductions	2,375
Withholding	993

Annualized AGI. Before the Joneses figure their AGI for the period, they first figure Anne's self-employment tax in Section B, and then her adjustment to income for self-employment tax.

On line 33 of Section B, they enter $2,771, which is Anne's net profit from self-employment for the period ($3,000 x .9235). The prorated social security tax limit is preprinted on line 34. She has no social security wages, so they enter zero on line 35, and $26,700 on line 36. Anne's annualized social security tax on line 38 is $1,153 ($2,771 × .416). Her annualized Medicare tax on line 40 is $321 ($2,771 × .116). Her total annualized self-employment tax on line 41 is $1,474. They enter that amount on line 17 of Section A.

The Joneses figure their adjustment to income for Anne's self-employment tax on lines 42 through 46 (Section B). That amount is $212 ($848 ÷ 4). They subtract that amount and their $150 IRA contributions from their $14,271 total income and enter their AGI for the period, $13,909, on line 1 of Section A. They multiply that amount by 4 and enter their annualized AGI, $55,636, on line 3.

Annualized taxable income. The Joneses figure their annualized itemized deductions ($2,375 × 4) on lines 4 through 6 of Section A. Because the result is smaller than their standard deduction, they enter their $11,600 standard deduction on line 8. After subtracting that amount and their $7,400 deduction for exemptions, the Joneses' annualized taxable income on line 11 is $36,636.

Annualized taxes and credits. The Joneses use the 2011 Tax Rate Schedule Y-1 on page 34 to figure their annualized income tax, $4,645, which they enter on line 12 of Section A.

They use their 2010 tax return to see what credits may be included on line 15. These are nonrefundable credits on lines 47 through 53 of Form 1040 or lines 29 through 33 if you filed Form 1040A. They have no credits listed in this section of their tax return and do not think they will have any in 2011, so they leave line 15 blank.

They have no other taxes for the period that would be entered on line 18, so they leave that line blank and enter $6,119 ($4,645 + $1,474) on line 19.

Next, the Joneses look at refundable credits on line 20. The credits on the 2010 Form 1040 that will be available in 2011 are those on lines 64a, 65, 66, 67, and 70, and on Forms 8801, 8839, and 8885. They do not anticipate any refundable credits, so they leave that line blank and enter $6,119 on line 21.

Required estimated tax payment. The Joneses' annualized income installment on lines 23 and 25 of Section A is $1,377 ($6,119 × 22.5%). On lines 26 and 28 they enter $2,960, one-fourth of their $11,840 required annual payment (line 14c of their 2011 Estimated Tax Worksheet). Because their annualized income installment ($1,377) is smaller, they enter that amount on lines 29 and 30.

Larry's total expected withholding for the year is $3,972. The Joneses can treat 3 months of that amount ($3,972 ÷ 12 = $331 × 3 months = $993) as paid on April 18, or they can use Larry's actual withholding for the period. The Joneses enter $993 on line 30.

On line 31, the Joneses' required estimated tax payment for the period under the annualized income installment method is $384 ($1,377 − $993). They will send in an estimated tax payment of $384 for the first period.

Second, Third, and Fourth Periods

After the end of each remaining payment period, the Joneses complete the column of the worksheet for that period (from the beginning of the year through the end of that payment period) in the same way they did for the first period. They had the following income for each period.

	Second Period	Third Period	Fourth Period
	Jan. 1- May 31	Jan. 1- Aug. 31	Jan. 1- Dec. 31
Larry's salary	$16,625	$26,600	$39,900
State tax refund	600	600	600
Anne's net profit from self-employment	6,000	16,000	40,100
Net rental income	365	4,745	6,205
Interest income	1,160	1,856	2,784
Total	$24,750	$49,801	$89,589

They also take into account the following items for each period.

	Second Period	Third Period	Fourth Period
	Jan. 1- May 31	Jan. 1- Aug. 31	Jan. 1- Dec. 31
Adjustment to income for IRA contributions	$ 250	$ 400	$1,000
Itemized deductions	4,750	9,250	17,825
Withholding	1,655	2,648	3,972

For the second period, as for the first, the annualized income installment method allows the Joneses to pay less than their required payment under the regular installment method. They make up the difference in the third and fourth periods when their income is higher.

Because the Joneses are using the annualized income installment method, they must file Form 2210 with their tax return for 2011.

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Figure 2-D. Illustrated Example 1--Regular Installment Method (Anne and Larry Jones)

Figure 2-E.Annualized Income Installment Method—Illustrated Example 2 (Anne and Larry Jones)

Worksheet 2-6.2011 Annualized Estimated Tax Worksheet
Note.For instructions, see Annualized Income Installment Method beginning on page 23.

Section A (For Figuring Your Annualized Estimated Tax Payments)—Complete each column after end of period shown.
Estates and trusts: Use the following ending dates in columns (a) through (d): 2/28/2011, 4/30/2011, 7/31/2011, 11/30/2011.			(a) 1/1/11-3/31/11	(b) 1/1/11-5/31/11	(c) 1/1/11-8/31/11	(d) 1/1/11-12/31/11
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	13,909	24,076	48,271	85,756
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	55,636	57,782	72,407	85,756
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	2,375	4,750	9,250	17,825
5	Annualization amounts	5	4	2.4	1.5	1
6	Multiply line 4 by line 5 (see instructions)	6	9,500	11,400	13,875	17,825
7	Standard deduction from Worksheet 2-3	7	11,600	11,600	11,600	11,600
8	Enter the larger of line 6 or line 7	8	11,600	11,600	13,875	17,825
9	Subtract line 8 from line 3	9	44,036	46,182	58,532	67,931
10	In each column, multiply $3,700 by your total expected number of exemptions (see instructions). (Estates and trusts, see instructions)	10	7,400	7,400	7,400	7,400
11	Subtract line 10 from line 9. If zero or less, enter -0-	11	36,636	38,782	51,132	60,531
12	Figure your tax on the amount on line 11 (see instructions)	12	4,645	4,967	6,820	8,230
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	4,645	4,967	6,820	8,230
15	Enter nonrefundable credits for each period (see instructions)	15
16	Subtract line 15 from line 14	16	4,645	4,967	6,820	8,230
17	Self-employment tax from line 41 of Section B	17	1,474	1,796	2,948	4,925
18	Enter other taxes for each period (see instructions)	18
19	Total tax. Add lines 16, 17, and 18	19	6,119	6,736	9,768	13,155
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	6,119	6,736	9,768	13,155
22	Applicable percentage	22	22.5%	45%	67.5%	90%
23	Multiply line 21 by line 22	23	1,377	3,031	6,593	11,840
	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		1,377	3,031	6,593
25	Annualized income installment. Subtract line 24 from line 23. If zero or less, enter -0-	25	1,377	1,654	3,562	5,247
26	Enter 25% (.25) of line 14c of the Form 1040-ES Estimated Tax Worksheet in each column	26	2,960	2,960	2,960	2,960
27	Subtract line 29 of the previous column from line 28 of that column	27		1,583	2,889	2,287
28	Add lines 26 and 27	28	2,960	4,543	5,849	5,247
29	Enter the smaller of line 25 or line 28 (see instructions)	29	1,377	1,654	3,562	5,247
30	Total required payments for the period. Add lines 24 and 29	30	1,377	3,031	6,522	11,840
31	Estimated tax payments made (line 32 of all previous columns) plus tax withholding through the due date for the period (see instructions)	31	993	2,039	4,024	7,846
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	384	992	2,498	3,994

Figure 2-E. Annualized Income Installment Method—Illustrated Example 2 (Anne and Larry Jones) (Continued)

Worksheet 2-6.2011 Annualized Estimated Tax Worksheet(Continued)

Section B (For Figuring Your Annualized Estimated Self-Employment Tax)—Complete each column after end of period shown.
(Form 1040 filers only)			(a) 1/1/11-3/31/11	(b) 1/1/11-5/31/11	(c) 1/1/11-8/31/11	(d) 1/1/11-12/31/11
33	Net earnings from self-employment for the period (see instructions)	33	2,771	5,541	14,776	37,032
34	Prorated social security tax limit	34	$26,700	$44,500	$71,200	$106,800
35	Enter actual wages for the period subject to social security tax or the 4.2% portion of tier 1 railroad retirement tax. Exception: If you file Form 4137 or Form 8919, see instructions	35	0	0	0	0
36	Subtract line 35 from line 34. If zero or less, enter -0-	36	26,700	44,500	71,200	106,800
37	Annualization amounts	37	0.416	0.2496	0.156	0.104
38	Multiply line 37 by the smaller of line 33 or line 36	38	1,153	1,383	2,305	3,851
39	Annualization amounts	39	0.116	0.0696	0.0435	0.029
40	Multiply line 33 by line 39	40	321	386	643	1,074
41	Add lines 38 and 40. Enter the result here and on line 17 of Section A	41	1,474	1,769	2,948	4,925
42	Multiply line 38 by 59.6% (.596)	42	687	824	1,374	2,295
43	Multiply line 40 by 50% (.50)	43	161	193	322	537
44	Add lines 42 and 43	44	848	1,017	1,696	2,832
45	Annualization amounts	45	4	2.4	1.5	1
46	Deduction for self-employment tax. Divide line 44 by line 45. Enter the result here. Use this result to figure your AGI on line 1	46	212	424	1,131	2,832

Worksheets for Chapter 2

Table 2-2.Where To Find Worksheets

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

IF you need...	THEN use...	ON page...
the 2011 Estimated Tax Worksheet (ES Worksheet)		20, 33
2011 Tax Rate Schedules		34
to estimate your taxable social security and railroad retirement benefits—line 1 of ES Worksheet (or Annualized ES Worksheet (Worksheet 2-6))	Worksheet 2-1	35
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 2-6))	Worksheet 2-2	36
to determine your standard deduction—line 2 of ES Worksheet (line 7 of Annualized ES Worksheet (Worksheet 2-6))	Worksheet 2-3	37
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 2-4	38
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 2-5	39
the 2011 Annualized Estimated Tax Worksheet (Annualized ES Worksheet)	Worksheet 2-6	40–41
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 2-7	42
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 2-8	43
to refigure (amend) your estimated tax during the year	Worksheet 2-9	43

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2011 Estimated Tax Worksheet

2011 Tax Rate Schedules

Caution.Do not use these Tax Rate Schedules to figure your 2010 taxes. Use them only to figure your 2011 estimated taxes.

Schedule X—Use if your 2011 filing status is Single						Schedule Z—Use if your 2011 filing status is Head of household
If line 5 is:		The tax is:			of the	If line 5 is:		The tax is:			of the
Over—	But not over—				amount over—	Over—	But not over—				amount over—

$0	$8,500			10%	$0	$0	$12,150			10%	$0
8,500	34,500	$850.00	+	15%	8,500	12,150	46,250	$1,215.00	+	15%	12,150
34,500	83,600	4,750.00	+	25%	34,500	46,250	119,400	6,330.00	+	25%	46,250
83,600	174,400	17,025.00	+	28%	83,600	119,400	193,350	24,617.50	+	28%	119,400
174,400	379,150	42,449.00	+	33%	174,400	193,350	379,150	45,323.50	+	33%	193,350
379,150	- - - - - -	110,016.50	+	35%	379,150	379,150	- - - - - -	106,637.50	+	35%	379,150
Schedule Y-1—Use if your 2011 filing status is Married filing jointly or Qualifying widow(er)						Schedule Y-2—Use if your 2011 filing status is Married filing separately
If line 5 is:		The tax is:			of the	If line 5 is:		The tax is:			of the
Over—	But not over—				amount over—	Over—	But not over—				amount over—

$0	$17,000			10%	$0	$0	$8,500			10%	$0
17,000	69,000	$1,700.00	+	15%	17,000	8,500	34,500	$850.00	+	15%	8,500
69,000	139,350	9,500.00	+	25%	69,000	34,500	69,675	4,750.00	+	25%	34,500
139,350	212,300	27,087.50	+	28%	139,350	69,675	106,150	13,543.75	+	28%	69,675
212,300	379,150	47,513.50	+	33%	212,300	106,150	189,575	23,756.75	+	33%	106,150
379,150	- - - - - -	102,574.00	+	35%	379,150	189,575	- - - - - -	51,287.00	+	35%	189,575

Worksheet 2-1.2011 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 2-6, 2011 Annualized Estimated Tax Worksheet, multiply the expected amount of benefits for each period by the annualization amount on 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, tuition and fees deduction, or domestic production activities deduction	7.
8.	Subtract line 7 from line 6. If zero or less, stop here. Do not include any social security or railroad retirement benefits in the amount on line 1 of your 2011 Estimated Tax Worksheet (or Annualized Estimated Tax Worksheet (Worksheet 2-6))	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. Do not include any social security or railroad retirement benefits in the amount on line 1 of your 2011 Estimated Tax Worksheet (or Annualized Estimated Tax Worksheet (Worksheet 2-6))	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 on line 2 for the same period and enter here. Include this amount in the total on line 1 of your 2011 Estimated Tax Worksheet (or Annualized Estimated Tax Worksheet (Worksheet 2-6))	20.

Worksheet 2-2.2011 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.	$106,800
6.		Enter your expected wages (if subject to social security tax or the 4.2% 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 10.4% (.104)			9.
10.		Add line 4 and line 9. Enter the result here and on line 11 of your 2011 Estimated Tax Worksheet (or line 17 of the Annualized Estimated Tax Worksheet (Worksheet 2-6))			10.
11.		Multiply line 4 by 50% (.50)	11.
12.		Multiply line 9 by 59.6% (.596)	12.
13.		Add lines 11 and 12. 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 2011 Estimated Tax Worksheet (or Annualized Estimated Tax Worksheet (Worksheet 2-6))	13.

*Your net profit from self-employment is found on Schedule C, line 31; Schedule F, line 36; Schedule K-1 (Form 1065), box 14, code A; and Schedule K-1 (Form 1065-B), box 9, code J1.

Worksheet 2-3. 2011 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—$5,800
	•Married filing jointly or Qualifying widow(er)—$11,600
	•Head of household—$8,500			1.
2.	Can you (or your spouse if filing jointly) be claimed as a dependent on someone else's return?
		No.	Skip line 3; enter the amount from line 1 on line 4.
		Yes.	Go to line 3.
3.	Is your earned income* more than $650?
		Yes.	Add $300 to your earned income. Enter the total.
		No.	Enter $950	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, 1947, or blind?
		No.	Go to line 6.
		Yes.	Check if:
			a. You were Born before January 2, 1947 Blind
			b. Your spouse was Born before January 2, 1947 Blind
			c. Total boxes checked in 5a and 5b
		▸	Multiply $1,150 ($1,450 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 2011 Estimated Tax Worksheet (or line 7 of your 2011 Annualized Estimated Tax Worksheet (Worksheet 2-6))				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 2-2, line 13).

Worksheet 2-4.2011 Estimated Tax Worksheet—Line 6 Qualified Dividends and Capital Gain Tax Worksheet


1.	Enter the amount from the appropriate worksheet. Line 5 of your 2010 Estimated Tax Worksheet Line 3 of Worksheet 2-5 (use if you will exclude or deduct foreign earned income or housing)			1.
2.	Enter your qualified dividends expected for 2011 ¹	2.
3.	Enter your net capital gain expected for 2011 ¹	3.
4.	Add lines 2 and 3		4.
5.	Enter your 28% rate gain or loss expected for 2011 ²	5.
6.	Enter your unrecaptured section 1250 gain expected for 2011	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 $69,000 ($34,500 if single or married filing separately, or $46,250 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			15.
	Note. If lines 1 and 11 are the same, skip lines 16 through 28 and go to line 29.
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.	Multiply line 18 by 15% (.15)				19.
	Note.If line 6 is zero or blank, skip lines 20 through 25 and go to line 26.
20.	Enter the smaller of line 3 or line 6		20.
21.	Add lines 4 and 14	21.
22.	Enter the amount from line 1 above	22.
23.	Subtract line 22 from line 21. If zero or less, enter -0-		23.
24.	Subtract line 23 from line 20. If zero or less, enter -0-			24.
25.	Multiply line 24 by 25% (.25)				25.
	Note.If line 5 is zero or blank, skip lines 26 through 28 and go to line 29.
26.	Add lines 14, 15, 18, and 24			26.
27.	Subtract line 26 from line 1			27.
28.	Multiply line 27 by 28% (.28)				28.
29.	Figure the tax on the amount on line 14 from the 2011 Tax Rate Schedules				29.
30.	Add lines 19, 25, 28, and 29				30.
31.	Figure the tax on the amount on line 1 from the 2011 Tax Rate Schedules				31.
32.	Tax on all taxable income (including capital gains and qualified dividends). Enter the smaller of line 30 or line 31 here and on line 6 of the 2011 Estimated Tax Worksheet (or line 4 of Worksheet 2-5)				32.

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 2-5.2011 Estimated Tax Worksheet—Line 6 Foreign Earned Income Tax Worksheet

Before you begin: If line 5 of your 2011 Estimated Tax Worksheet is zero, do not complete this worksheet.

1.	Enter the amount from line 5 of your 2011 Estimated Tax Worksheet	1.
2.	Enter the total foreign earned income and housing amount you (and your spouse if filing jointly) expect to exclude or deduct in 2011 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 2011 Tax Rate Schedules or Worksheet 2-4,* as appropriate	4.
5.	Tax on the amount on line 2. Use the 2011 Tax Rate Schedules	5.
6.	Subtract line 5 from line 4. Enter the result here and on line 6 of your 2011 Estimated Tax Worksheet. If zero or less, enter -0-	6.

*If using Worksheet 2-4 (Qualified Dividends and Capital Gain Tax Worksheet), enter the amount from line 3 above on line 1 of Worksheet 2-4. Complete Worksheet 2-4 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 2011 Estimated Tax Worksheet from line 9 of Worksheet 2-4. 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 2-4 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 2-4 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 2-5 above.
	a. Reduce (but not below zero) the amount you otherwise would enter on line 3 of Worksheet 2-4 by your capital gain excess.
	b. Reduce (but not below zero) the amount you otherwise would enter on line 2 of Worksheet 2-4 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 2-4 by your capital gain excess.
	d. Reduce (but not below zero) the amount you otherwise would enter on line 6 of Worksheet 2-4 by your capital gain excess.

Worksheet 2-62011 Annualized Estimated Tax Worksheet

Note.For instructions, see Annualized Income Installment Method beginning on page 23

Section A (For Figuring Your Annualized Estimated Tax Payments)—Complete each column after end of period shown.
Estates and trusts: Use the following ending dates in columns (a) through (d): 2/28/2011, 4/30/2011, 7/31/2011, 11/30/2011.			(a) 1/1/11-3/31/11	(b) 1/1/11-5/31/11	(c) 1/1/11-8/31/11	(d) 1/1/11-12/31/11
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 (see instructions)	6
7	Standard deduction from Worksheet 2-3	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 $3,700 by your total expected number of exemptions (see instructions). (Estates and trusts, see instructions)	10
11	Subtract line 10 from line 9. If zero or less, enter -0-	11
12	Figure your tax on the amount on line 11 (see instructions)	12
13	For each period, enter any tax from Forms 8814, 4972, and 6251. Also include any recapture of education credits (see instructions)	13
14	Add lines 12 and 13	14
15	Enter nonrefundable credits for each period (see instructions)	15
16	Subtract line 15 from line 14	16
17	Self-employment tax from line 41 of Section B	17
18	Enter other taxes for each period (see instructions)	18
19	Total tax. Add lines 16, 17, and 18	19
20	Enter refundable credits for each period (see instructions for type of credits allowed). Do not include any income tax withholding on this line	20
21	Subtract line 20 from line 19. If zero or less, enter -0-	21
22	Applicable percentage	22	22.5%	45%	67.5%	90%
23	Multiply line 21 by line 22	23
	Complete lines 24 through 29 of one column before going to line 24 of the next column.
24	Enter the total of the amounts in all previous columns of line 29	24
25	Annualized income installment. Subtract line 24 from line 23. If zero or less, enter -0-	25
26	Enter 25% (.25) of line 14c of the Form 1040-ES Estimated Tax Worksheet in each column	26
27	Subtract line 29 of the previous column from line 28 of that column	27
28	Add lines 26 and 27	28
29	Enter the smaller of line 25 or line 28 (see instructions)	29
30	Total required payments for the period. Add lines 24 and 29	30
31	Estimated tax payments made (line 32 of all previous columns) plus tax withholding through the due date for the period (see instructions)	31
32	Estimated tax payment required by the next due date. Subtract line 31 from line 30 and enter the result (but not less than zero) here and on your payment voucher	32

Worksheet 2-6.2011 Annualized Estimated Tax Worksheet(Continued)

Section B (For Figuring Your Annualized Estimated Self-Employment Tax)—Complete each column after end of period shown.
(Form 1040 filers only)			(a) 1/1/11-3/31/11	(b) 1/1/11-5/31/11	(c) 1/1/11-8/31/11	(d) 1/1/11-12/31/11
33	Net earnings from self-employment for the period (see instructions)	33
34	Prorated social security tax limit	34	$26,700	$44,500	$71,200	$106,800
35	Enter actual wages for the period subject to social security tax or the 4.2% 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	0.416	0.2496	0.156	0.104
38	Multiply line 37 by the smaller of line 33 or line 36	38
39	Annualization amounts	39	0.116	0.0696	0.0435	0.029
40	Multiply line 33 by line 39	40
41	Add lines 38 and 40. Enter the result here and on line 17 of Section A	41
42	Multiply line 38 by 59.6% (.596)	42
43	Multiply line 40 by 50% (.50)	43
44	Add lines 42 and 43	44
45	Annualization amounts	45	4	2.4	1.5	1
46	Deduction for self-employment tax. Divide line 44 by line 45. Enter the result here. Use this result to figure your AGI on line 1	46

Worksheet 2-7.2011 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 2-6 for the same period.

1.	Enter the amount from the appropriate worksheet. Line 11 of your 2011 Annualized Estimated Tax Worksheet (Worksheet 2-6) Line 3 of Worksheet 2-8 (use if you will exclude or deduct foreign earned income or housing)			1.
2.	Enter your annualized qualified dividends expected for 2011 ¹	2.
3.	Enter your annualized net capital gain expected for 2011 ¹	3.
4.	Add lines 2 and 3		4.
5.	Enter your annualized 28% rate gain or loss expected for 2011 ²	5.
6.	Enter your annualized unrecaptured section 1250 gain expected for 2011	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 $69,000 ($34,500 if single or married filing separately, or $46,250 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			15.
	Note.If lines 1 and 11 are the same, skip lines 16 through 28 and go to line 29.
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.	Multiply line 18 by 15% (.15)				19.
	Note.If line 6 is zero or blank, skip lines 20 through 25 and go to line 26.
20.	Enter the smaller of line 3 or line 6		20.
21.	Add lines 4 and 14	21.
22.	Enter the amount from line 1 above	22.
23.	Subtract line 22 from line 21. If zero or less, enter -0-		23.
24.	Subtract line 23 from line 20. If zero or less, enter -0-			24.
25.	Multiply line 24 by 25% (.25)				25.
	Note.If line 5 is zero or blank, skip lines 26 through 28 and go to line 29.
26.	Add lines 14, 15, 18, and 24			26.
27.	Subtract line 26 from line 1			27.
28.	Multiply line 27 by 28% (.28)				28.
29.	Figure the tax on the amount on line 14 from the 2011 Tax Rate Schedules				29.
30.	Add lines 19, 25, 28, and 29				30.
31.	Figure the tax on the amount on line 1 from the 2011 Tax Rate Schedules				31.
32.	Tax on all taxable income (including capital gains and qualified dividends). Enter the smaller of line 30 or line 31 here and on line 12 of the appropriate column of the 2011 Annualized Estimated Tax Worksheet (or line 4 of Worksheet 2-8)				32.

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.

Worksheet 2-8.2011 Annualized Estimated Tax Worksheet—Line 12 Foreign Earned Income Tax Worksheet

Before you begin:		If line 11 of Worksheet 2-6 (2011 Annualized Estimated Tax Worksheet) is zero for the period, do not complete this worksheet.
1.	Enter the amount from line 11 of your 2011 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 2011 Tax Rate Schedules or Worksheet 2-7,** as appropriate		4.
5.	Tax on the amount on line 2. Use the 2011 Tax Rate Schedules		5.
6.	Subtract line 5 from line 4. Enter the result here and on line 12 of your 2011 Annualized Estimated Tax Worksheet (Worksheet 2-6). 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 2-6 for the same period.
**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 for the appropriate period, subtract line 11 of Worksheet 2-6 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 above.
	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.Amended Estimated Tax Worksheet


1.	Amended total estimated tax due		1.
2.	Multiply line 1 by:
	50% (.50) if next payment is due June 15, 2011
	75% (.75) if next payment is due September 15, 2011
	100% (1.00) if next payment is due January 17, 2012	2.
3.	Estimated tax payments made 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 17, 2012, 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 15, 2011, enter one-half of the amount on line 6 here and on the payment vouchers for your payments due September 15, 2011, and January 17, 2012. If the amount on line 4 is due September 15, 2011, enter the full amount on line 6 here and on the payment voucher for your payment due January 17, 2012		7.

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