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Page 1 of 74 of Publication 505 11:22 - 30-MAR-2009
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Publication 505
(Rev. March 2009) Contents
Department Introduction . . . . . . . . . . . . . . . . . . . . . 1
Cat. No. 15008E
of the What’s New for 2009 . . . . . . . . . . . . . . . 2
Tax
Treasury
Reminders . . . . . . . . . . . . . . . . . . . . . . 3
Internal
Revenue Chapter
Withholding
Service
1. Tax Withholding for 2009 . . . . . . . . 4
Salaries and Wages . . . . . . . . . . . . . .4
and Estimated
Tips . . . . . . . . . . . . . . . . . . . . . . . . 15
Taxable Fringe Benefits . . . . . . . . . . 15
Sick Pay . . . . . . . . . . . . . . . . . . . . . 15
Tax
Pensions and Annuities . . . . . . . . . . . 16
Gambling Winnings . . . . . . . . . . . . . 17
Unemployment Compensation . . . . . . 17
Federal Payments . . . . . . . . . . . . . . 17
Backup Withholding . . . . . . . . . . . . . 17
2. Estimated Tax for 2009 . . . . . . . . . . 19
Who Does Not Have To Pay
Estimated Tax . . . . . . . . . . . . . . 19
Who Must Pay Estimated Tax . . . . . . 19
How To Figure Estimated Tax . . . . . . 21
When To Pay Estimated Tax . . . . . . . 24
How To Figure Each Payment . . . . . . 25
How To Pay Estimated Tax . . . . . . . . 28
Illustrated Examples . . . . . . . . . . . . . 29
Worksheets for Chapter 2 . . . . . . . . . 34
2009 Tax Rate Schedules . . . . . . . . . 40
3. Credit for Withholding and
Estimated Tax for 2008 . . . . . . . . . . 50
Withholding . . . . . . . . . . . . . . . . . . . 50
Estimated Tax . . . . . . . . . . . . . . . . . 51
Excess Social Security or
Railroad Retirement Tax
Withholding . . . . . . . . . . . . . . . . 52
4. Underpayment Penalty for
2008 . . . . . . . . . . . . . . . . . . . . . . . 54
General Rule . . . . . . . . . . . . . . . . . . 54
Exceptions . . . . . . . . . . . . . . . . . . . 55
Figuring Your Required Annual
Payment (Part I) . . . . . . . . . . . . . 56
Short Method for Figuring the
Penalty (Part III) . . . . . . . . . . . . . 56
Regular Method for Figuring the
Penalty (Part IV) . . . . . . . . . . . . . 57
Farmers and Fishermen . . . . . . . . . . 60
Waiver of Penalty . . . . . . . . . . . . . . . 60
Worksheets for Chapter 4 . . . . . . . . . 68
5. How To Get Tax Help . . . . . . . . . . . 70
Index . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Introduction
The federal income tax is a pay-as-you-go tax.
You must pay the tax as you earn or receive
income during the year. There are two ways to
pay as you go.
• Withholding. If you are an employee,
your employer probably withholds income
Get forms and other information tax from your pay. In addition, tax may be
faster and easier by: withheld from certain other income, includ-
ing pensions, bonuses, commissions, and
gambling winnings. In each case, the
Internet www.irs.gov amount withheld is paid to the Internal
Revenue Service (IRS) in your name.
Mar 30, 2009

• Estimated tax. If you do not pay your tax Retirement savings plans. The following
through withholding, or do not pay enough
tax that way, you might have to pay esti-
What’s New for 2009 paragraphs highlight changes that affect individ-
ual retirement arrangements (IRAs) and pen-
mated tax. People who are in business for sion plans. For more information, see
You should consider the items in this section
themselves generally will have to pay their Publication 590, Individual Retirement Arrange-
when figuring the amount of your tax withholding ments (IRAs).
tax this way. You may have to pay esti- (see chapter 1) or estimated tax payments (see
mated tax if you receive income such as IRA deduction expanded. You may be
chapter 2) for 2009. Unless otherwise stated,
dividends, interest, capital gains, rents, able to take an IRA deduction if you were cov-
see Publication 553, Highlights of 2008 Tax ered by a retirement plan at work and your 2009
and royalties. Estimated tax is used to pay Changes, for more information. modified AGI is less than $65,000 ($109,000 if
not only income tax, but self-employment married filing jointly or a qualifying widow(er)). If
tax and alternative minimum tax as well. Definition of a qualifying child revised. The
your spouse was covered by a retirement plan
following changes to the definition of a qualifying
This publication explains both of these methods. but you were not, you may be able to take an
child have been made.
It also explains how to take credit on your return IRA deduction if your modified AGI is less than
for the tax that was withheld and for your esti- • Your qualifying child must be younger than $176,000.
mated tax payments. you. Elective salary deferrals. The maximum
amount you can defer under all plans generally
If you did not pay enough tax during the year, • A child cannot be your qualifying child if he
is limited to $16,500 ($11,500 if you have only
either through withholding or by making esti- or she files a joint return, unless the return
SIMPLE plans; $19,500 for section 403(b) plans
mated tax payments, you may have to pay a was filed only as a claim for refund.
if you qualify for the 15-year rule). The catch-up
penalty. Generally, the IRS can figure this pen- • If the parents of a child can claim the child contribution limit for individuals age 50 or older
alty for you. This underpayment penalty, and the as a qualifying child but no parent so at the end of the year is increased to $5,500
exceptions to it, are discussed in chapter 4. claims the child, no one else can claim the (except for section 401(k)(11) plans and
child as a qualifying child unless that per- SIMPLE plans, for which this limit remains un-
Nonresident aliens. If you are a nonresi- changed).
son’s adjusted gross income (AGI) is
dent alien, see chapter 8 in Publication 519, U.S. Retirement savings contributions credit
higher than the highest AGI of any parent
Tax Guide for Aliens, for a discussion of Form (saver’s credit). For 2009, the income limits
of the child.
1040-ES (NR) and withholding. have increased and you may be able to claim
• Your child is a qualifying child for pur- this credit if your modified AGI is not more than
poses of the child tax credit only if you can $27,750 ($55,500 if married filing jointly,
What’s new for 2008 and 2009. See What’s
and do claim an exemption for him or her. $41,625 if head of household).
New for 2009 that begins below, and What’s
New for 2008 in chapters 3 and 4. Temporary waiver of certain required
Divorced or separated parents. A noncus- minimum distribution rules. No minimum dis-
todial parent claiming an exemption for a child tribution is required from your IRA or em-
Comments and suggestions. We welcome can no longer attach certain pages from a di- ployer-provided qualified retirement plan for
your comments about this publication and your vorce decree or separation agreement executed 2009. For more information, see Publication
suggestions for future editions. after 2008. The noncustodial parent will have to 575, Pension and Annuity Income, or Publica-
You can write to us at the following address: attach Form 8332 or a similar statement signed tion 590.
by the custodial parent whose only purpose is to Increased standard deduction. You may be
Internal Revenue Service
release a claim for exemption. able to increase your standard deduction by the
Individual Forms and Publications Branch
SE:W:CAR:MP:T:I Differential wage payments subject to with- following amounts.
1111 Constitution Ave. NW, IR-6526 holding. Beginning in 2009, differential wage • Certain state or local real estate taxes you
Washington, DC 20224 payments made to active members of the uni- pay.
formed services are treated as wages and in- • A net disaster loss attributable to a feder-
come tax must be withheld. For more details, ally declared disaster.
We respond to many letters by telephone. see Publication 15, Employer’s Tax Guide.
Therefore, it would be helpful if you would in- • Sales or excise taxes you pay on the
clude your daytime phone number, including the Certain unemployment compensation ex- purchase of certain new cars, trucks,
area code, in your correspondence. cluded from income. You can exclude from motorcycles, or motor homes.
You can email us at *taxforms@irs.gov. (The income the first $2,400 of unemployment com-
pensation you receive. Standard mileage rates. The standard mile-
asterisk must be included in the address.)
Please put “Publications Comment” on the sub- age rate for the cost of operating your car is:
Economic recovery payment to recipients of
ject line. Although we cannot respond individu- social security, supplemental social secur- • 55 cents a mile for all business miles
ally to each email, we do appreciate your ity, railroad retirement benefits, and veter- driven,
feedback and will consider your comments as ans disability compensation or pension • 24 cents a mile for the use of your car for
we revise our tax products. benefits. If you receive any of the above ben- medical reasons,
Ordering forms and publications. Visit efits, you will receive an economic recovery pay-
ment of $250. This is not included in your
• 24 cents a mile for the use of your car for
www.irs.gov/formspubs to download forms and a deductible move,
publications, call 1-800-829-3676, or write to the income.
address below and receive a response within 10
• 14 cents a mile for the use of your car for
Qualified small business stock. The exclu- charitable reasons.
days after your request is received. sion of gain from the sale of qualifying small
business stock is increased to 75% for stock Personal casualty and theft loss. A personal
Internal Revenue Service acquired after February 17, 2009, and before casualty or theft loss must exceed $500 to be
1201 N. Mitsubishi Motorway January 1, 2011. allowed. This is in addition to the 10%-of-AGI
Bloomington, IL 61705-6613 limit that generally applies to the net loss.
Limit on exclusion of gain on sale of main
home. Generally, gain from the sale of your Alternative minimum tax (AMT) exemption
Tax questions. If you have a tax question, main home is no longer excludable from income amount increases. The AMT exemption
check the information available on www.irs.gov if the gain is allocable to periods after 2008 when amount is increased to $46,700 ($70,950 if mar-
or call 1-800-829-1040. We cannot answer tax neither you nor your spouse (or your former ried filing jointly or a qualifying widow(er);
questions sent to either of the above addresses. spouse) used the property as a main home. $35,475 if married filing separately).
Page 2 Publication 505 (March 2009)

Tax on child’s investment income. Gener- The maximum investment income you can must be included in income as interest. Any
ally, Form 8615 will be required to figure the tax have and still get the credit has increased to unused credit is refundable.
for children with investment income of more than $3,100.
$1,900. First-time homebuyer credit. You may be
For more information, see Publication 596,
able to claim a refundable credit of up to $8,000
Making work pay credit. You can claim a Earned Income Credit (EIC). if you are a first-time homebuyer and buy a
refundable credit of up to $400 ($800 if married Additional child tax credit. The earned in- principal residence after December 31, 2008,
filing jointly) if you work. You can claim the credit come threshold generally needed to qualify for and before December 1, 2009.
if you are an employee or self-employed. The the additional child tax credit is reduced to
credit is 6.2% of your earned income, which Increased health coverage tax credit. For
$3,000. individuals who are eligible trade adjustment
includes nontaxable combat pay, up to the $400
(or $800) limit. The credit is phased out if your assistance (TAA) recipients, alternative TAA re-
Credit to certain government retirees. If you
modified AGI is more than $75,000 ($150,000 if cipients, or eligible Pension Benefit Guaranty
are a government retiree and you did not receive
married filing jointly). For more details, see Corporation pension recipients, the credit for the
an economic recovery payment as a recipient of cost of health insurance increases. This credit
Worksheet 2-9 in chapter 2. social security, supplemental social security, also is available to eligible TAA recipients who
Hope education credit expanded. For 2009 railroad retirement, and veterans disability com- are not currently enrolled in a training program.
and 2010, the maximum credit is $2,500, the pensation or pension benefits, you are allowed a
credit is available for the first 4 years of credit of $250 ($500 if both you and your spouse Decreased estimated tax payment for certain
post-secondary education, and 40% of the credit are government retirees and you file jointly). The small businesses. For certain small busi-
is refundable. The increased benefits will be credit is refundable. See Worksheet 2-9 in chap- nesses, your required estimated tax payment for
phased out if your modified AGI is above ter 2. the year is the lesser of 90% of your 2008 tax or
$80,000 ($160,000 if married filing jointly). 90% of your estimated 2009 tax. This rule ap-
Nonbusiness energy property credit. This plies to individuals who satisfy all of the follow-
Qualified education expenses under a quali- credit, which expired after 2007, has been rein- ing:
fied tuition program (QTP). During 2009 and stated. The amount of the credit has increased
2010, qualified education expenses will include
• Your business had an average of fewer
from 10% to 30%, limited to a $1,500 total than 500 employees in 2008.
the purchase of computer technology, equip- amount for 2009 and 2010 installations. It also
ment, or Internet access and related services if it has been expanded to include certain asphalt • More than 50% of your gross income from
is to be used by the beneficiary and the benefi- roofs and stoves that burn biomass fuel. 2008 was income from your small busi-
ciary’s family during any of the years the benefi- ness.
ciary is enrolled at an eligible educational Residential energy efficient property credit.
The 30% credit for qualified solar hot water prop-
• Your AGI for 2008 was less than $500,000
institution. (This does not include expenses for
($250,000 if married filing separate returns
computer software designed for sports, games, erty, geothermal heat pumps, and wind energy
in 2009).
or hobbies unless the software is predominantly property is no longer limited to $2,000 per year.
educational in nature.) However, there is a $500 credit limit on qualified
fuel cell property expenditures.
Earned income credit (EIC). You may be
able to take the EIC if: Increased alternative fuel vehicle refueling Reminders
• Three or more children lived with you and property credit. The credit for alternative fuel
you earned less than $43,279 ($48,279 if vehicle fueling property increases to 50%. For Social security (FICA) tax. Generally, each
married filing jointly), property placed in service during 2009 and 2010 employer for whom you work during the tax year
at your main home, the credit limit increases to must withhold social security tax up to the an-
• Two children lived with you and you $2,000.
earned less than $40,295 ($45,295 if mar- nual limit.
ried filing jointly), Credit for qualified plug-in electric vehicles. Photographs of missing children. The Inter-
• One child lived with you and you earned The electric vehicle credit is now limited to nal Revenue Service is a proud partner with the
less than $35,463 ($40,463 if married filing plug-in electric vehicles. The maximum credit for National Center for Missing and Exploited Chil-
jointly), or a qualified vehicle acquired after February 17, dren. Photographs of missing children selected
2009, is $2,500. by the Center may appear in this publication on
• No children lived with you and you earned pages that otherwise would be blank. You can
less than $13,440 ($18,440 if married filing Plug-in conversion credit. A new credit is help bring these children home by looking at the
jointly). available for converting a motor vehicle to a photographs and calling 1-800-THE-LOST
qualified plug-in electric drive motor vehicle. The (1-800-843-5678) if you recognize a child.
New for 2009 is an increase in the amount of maximum credit is $4,000, and will be claimed
earned income credit for taxpayers with three or as part of the alternative motor vehicle credit.
more qualifying children.
You can elect to include combat pay as Build America tax credit bonds. The credit
earned income for purposes of claiming the EIC. available to taxpayers from Build America bonds
Publication 505 (March 2009) Page 3

Military retirees. Military retirement pay is New Job

treated in the same manner as regular pay for
1. income tax withholding purposes, even though it When you start a new job, you must fill out a
is treated as a pension or annuity for other tax Form W-4 and give it to your employer. Your
purposes. employer should have copies of the form. If you
need to change the information later, you must
Tax Withholding
fill out a new form.
Household workers. If you are a household If you work only part of the year (for example,
worker, you can ask your employer to withhold you start working after the beginning of the
for 2009 income tax from your pay. A household worker is
an employee who performs household work in a
year), too much tax may be withheld. You may
be able to avoid overwithholding if your em-
private home, local college club, or local frater- ployer agrees to use the part-year method, ex-
nity or sorority chapter. plained on page 12.
Introduction Tax is withheld only if you want it withheld
and your employer agrees to withhold it. If you Employee also receiving pension income.
This chapter discusses income tax withholding do not have enough income tax withheld, you If you receive pension or annuity income and
on: may have to pay estimated tax, as discussed in begin a new job, you will need to file Form W-4
with your new employer. However, you can
• Salaries and wages, chapter 2.
choose to split your withholding allowances be-
• Tips, tween your pension and job in any manner. See
Farmworkers. Generally, income tax is with- Publication 919 for more information.
• Taxable fringe benefits, held from your cash wages for work on a farm
• Sick pay, unless your employer both:
• Pensions and annuities, • Pays you cash wages of less than $150 Changing Your Withholding
during the year, and Events during the year may change your marital
• Gambling winnings,
• Has expenditures for agricultural labor to- status or the exemptions, adjustments, deduc-
• Unemployment compensation, and taling less than $2,500 during the year. tions, or credits you expect to claim on your tax
• Certain federal payments. return. When this happens, you may need to
give your employer a new Form W-4 to change
This chapter explains in detail the rules for with- Differential wage payments. When employ-
your withholding status or number of al-
holding tax from each of these types of income. ees are on leave from employment for military lowances.
The discussion of salaries and wages includes duty, some employers make up the difference If the event changes your withholding status
an explanation of how to complete Form W-4. between the military pay and civilian pay. Pay- or the number of allowances you are claiming,
ments made after December 31, 2008, to an you must give your employer a new Form W-4
This chapter also covers backup withholding
employee who is on active duty for a period of within 10 days after either of the following.
on interest, dividends, and other payments.
more than 30 days, will be subject to income tax
withholding. The wages and withholding will be • Any event that requires you to change to
Useful Items reported on Form W-2. single status.
You may want to see: You can ask your employer to withhold in- • Any event that decreases the number of
come tax from noncash wages and other wages withholding allowances you can claim.
Publication
not subject to withholding. If your employer does
❏ 919 How Do I Adjust My Tax not agree to withhold tax, or if not enough is Events that will decrease the number of with-
Withholding? withheld, you may have to pay estimated tax, as holding allowances you can claim include the
discussed in chapter 2. following.
Form (and Instructions) • You have been claiming an allowance for
❏ W-4 Employee’s Withholding Allowance Determining Amount of Tax your spouse, but you get divorced or your
Certificate Withheld Using Form W-4 spouse begins claiming his or her own al-
lowance on a separate Form W-4.
❏ W-4P Withholding Certificate for Pension
The amount of income tax your employer with- • You have been claiming an allowance for
or Annuity Payments
holds from your regular pay depends on two a dependent who is a qualifying relative,
❏ W-4S Request for Federal Income Tax things. but you no longer expect to provide more
Withholding From Sick Pay
• The amount you earn. than half the dependent’s support for the
❏ W-4V Voluntary Withholding Request year.
• The information you give your employer
See chapter 5 of this publication for informa- on Form W-4. • You have been claiming an allowance for
tion about getting these publications and forms. your qualifying child, but you now find that
Form W-4 includes three types of information he or she will provide more than half of his
that your employer will use to figure your with- or her own support during the year.
holding. • You have been claiming allowances for
Salaries and Wages • Whether to withhold at the single rate or at your expected deductions, but you now
the lower married rate. find they will be less than expected.
Income tax is withheld from the pay of most
• How many withholding allowances you • You filed for bankruptcy under chapter 11
employees. Your pay includes your regular pay, of the U.S. Bankruptcy Code and you may
bonuses, commissions, and vacation al- claim (each allowance reduces the
not be entitled to the same number of al-
lowances. It also includes reimbursements and amount withheld).
lowances or the bankruptcy estate may be
other expense allowances paid under a nonac- • Whether you want an additional amount taxed at a higher rate.
countable plan. See Supplemental Wages on withheld.
page 13 for definitions of accountable and Generally, you can submit a new Form W-4
nonaccountable plans. whenever you wish to change the number of
If your income is low enough that you will not Note. You must specify a filing status and a your withholding allowances for any other rea-
have to pay income tax for the year, you may be number of withholding allowances on Form W-4. son.
exempt from withholding. This is explained You cannot specify only a dollar amount of with- If you change the number of your withholding
under Exemption From Withholding on page 13. holding. allowances, you can request that your employer
Page 4 Chapter 1 Tax Withholding for 2009

withhold using the cumulative wage method, • You are married, either you or your If you are married, it also depends on whether
explained on page 12. spouse is a nonresident alien, and you your spouse also works and claims any al-
have not chosen to have that person lowances on his or her own Form W-4.
Changing your withholding for 2010. If treated as a resident alien for tax pur-
events in 2009 will decrease the number of your poses. For more information, see Nonresi- Form W-4 worksheets. Form W-4 has work-
withholding allowances for 2010, you must give dent Spouse Treated as a Resident in sheets to help you figure how many withholding
your employer a new Form W-4 by December 1, allowances you can claim. The worksheets are
chapter 1 of Publication 519.
2009. If an event occurs in December 2009, for your own records. Do not give them to your
submit a new Form W-4 within 10 days. The employer.
Married. You qualify to check the “Married” Complete only one set of Form W-4 work-
following are examples of events that will de-
box if any of the following applies. sheets, no matter how many jobs you have. If
crease the number of your allowances.
• You are married and neither you nor your you are married and will file a joint return, com-
• You claimed allowances for 2009 based plete only one set of worksheets for you and
spouse is a nonresident alien. You are
on child care expenses, moving expenses, your spouse, even if you both earn wages and
or large medical expenses, but you will not considered married for the whole year
each must give a Form W-4 to your employers.
have these expenses in 2010. even if your spouse died during the year.
Complete separate sets of worksheets only if
• You have been claiming an allowance for • You are married, either you or your you and your spouse will file separate returns.
your spouse, but he or she died in 2009. spouse is a nonresident alien, and you If you are not exempt from withholding (see
have chosen to have that person treated Exemption From Withholding on page 13), com-
as a resident alien for tax purposes. For plete the Personal Allowances Worksheet on
Note. Because you can file a joint return for more information, see Nonresident page 1 of the form. Also, use the worksheets on
2009, your spouse’s death will not affect the Spouse Treated as a Resident in chapter page 2 of the form to adjust the number of your
number of your withholding allowances until 1 of Publication 519. withholding allowances for itemized deductions
2010. You will have to change from married to and adjustments to income, and for two-earner
• You expect to be able to file your return as or multiple-job situations. If you want to adjust
single status for 2010, unless you can file as a
a qualifying widow or widower. You usu- the number of your withholding allowances for
qualifying widow or widower because you have
ally can use this filing status if your spouse certain tax credits, use the Deductions and Ad-
a dependent child, or you remarry.
died within the previous 2 years and you justments Worksheet on page 2 of Form W-4,
You must file a new Form W-4 showing sin- even if you do not have any deductions or ad-
provide more than half the cost of keeping
gle status by December 1 of the last year you justments.
up a home for the entire year that was the
are eligible to file as qualifying widow or wid- Complete all worksheets that apply to your
ower. main home for you and your child whom
you can claim as a dependent. However, situation. The worksheets will help you figure the
you must file a new Form W-4 showing maximum number of withholding allowances
you are entitled to claim so that the amount of
Checking Your Withholding your filing status as single by December 1
income tax withheld from your wages will match,
of the last year you are eligible to file as a
After you have given your employer a Form W-4, as closely as possible, the amount of income tax
qualifying widow or widower. For more in-
you can check to see whether the amount of tax you will owe at the end of the year.
formation on this filing status, see Qualify-
withheld from your pay is too little or too much. ing Widow(er) With Dependent Child Multiple jobs. If you have income from
See Publication 919 beginning on page 12. If too under Filing Status in Publication 501, Ex- more than one job at the same time, complete
much or too little tax is being withheld, you emptions, Standard Deduction, and Filing only one set of Form W-4 worksheets. Then split
should give your employer a new Form W-4 to Information. your allowances between the Forms W-4 for
change your withholding. each job. You cannot claim the same al-
lowances with more than one employer at the
Note. You cannot give your employer a pay- Married, but withhold at higher single rate. same time. You can claim all your allowances
ment to cover federal income tax withholding on Some married people find that they do not have with one employer and none with the other(s), or
salaries and wages for past pay periods or a enough tax withheld at the married rate. This divide them any other way.
payment for estimated tax. can happen, for example, when both spouses
Married individuals. If both you and your
work. To avoid this, you can check the “Married,
spouse are employed and expect to file a joint
Completing Form W-4 but withhold at higher Single rate” box (even if
return, figure your withholding allowances using
you qualify for the married rate). Also, you may
and Worksheets find that more tax is withheld if you fill out the
your combined income, adjustments, deduc-
tions, exemptions, and credits. Use only one set
When reading the following discussion, you may Two-Earners/Multiple Jobs Worksheet, ex- of worksheets. You can divide your total al-
find it helpful to refer to the filled-in Form W-4 on plained on page 9. lowances any way, but you cannot claim an
pages 10 and 11. allowance that your spouse also claims.
If you and your spouse expect to file sepa-
Withholding Allowances rate returns, figure your allowances using sepa-
Marital Status (Line 5 of Form W-4) rate worksheets based on your own individual
(Line 3 of Form W-4) income, adjustments, deductions, exemptions,
The more allowances you claim on Form W-4,
and credits.
There is a lower withholding rate for people who the less income tax your employer will withhold.
qualify to check the “Married” box on line 3 of You will have the most tax withheld if you claim Alternative method of figuring withholding
Form W-4. Everyone else must have tax with- “0” allowances. The number of allowances you allowances. You do not have to use the Form
held at the higher single rate. can claim depends on the following factors. W-4 worksheets if you use a more accurate
• How many exemptions you can take on method of figuring the number of withholding
Single. You must check the “Single” box if any allowances.
your tax return.
of the following applies. The method you use must be based on with-
• Whether you have income from more than holding schedules, the tax rate schedules, and
• You are single. If you are divorced, or sep- one job. the 2009 Estimated Tax Worksheet in chapter 2.
arated from your spouse under a court de-
• What deductions, adjustments to income, It must take into account only the items of in-
cree of separate maintenance, you are
come, adjustments to income, deductions, and
considered single. and credits you expect to have for the
tax credits that are taken into account on Form
year.
• You are married, but neither you nor your W-4.
spouse is a citizen or resident of the • Whether you will file as head of house- You can use the number of withholding al-
United States. hold. lowances determined under an alternative
Chapter 1 Tax Withholding for 2009 Page 5

method rather than the number determined us- Spouse. You can claim an allowance for household if you are unmarried and pay more
ing the Form W-4 worksheets. You still must your spouse’s exemption on line C unless your than half the cost of keeping up a home that:
give your employer a Form W-4 claiming your spouse is claiming his or her own exemption or
withholding allowances.
• Was the main home for all of 2009 of your
another person can claim an exemption for your
parent whom you can claim as a depen-
spouse. Do not claim this allowance if you and dent, or
Employees who are not citizens or residents. your spouse expect to file separate returns.
If you are neither a citizen nor a resident of the • You lived in for more than half the year
United States, you usually can claim only one Dependents. You can claim one allowance with your qualifying child or any other per-
withholding allowance. However, this rule does on line D for each exemption you will claim for a son you can claim as a dependent.
not apply if you are a resident of Canada or dependent on your tax return.
Mexico, or if you are a U.S. national. It also does For more information, see Publication 501.
Reduction of personal allowances.
not apply if your spouse is a U.S. citizen or For 2009, your deduction for personal If you expect to file as head of household on
resident and you have chosen to be treated as a exemptions on your tax return is re- your 2009 tax return, enter “1” on line E of the
resident of the United States. Special rules ap- duced if your adjusted gross income (AGI) is worksheet.
ply to residents of Korea and India. For more more than the AGI shown below for your filing
information, see Withholding From Compensa- status. Child and dependent care credit (worksheet
tion in chapter 8 of Publication 519. line F). Enter “1” on line F if you expect to
Single . . . . . . . . . . . . . . . . . . . . . $166,800 claim a credit for at least $1,800 of qualifying
Married filing jointly or qualifying child or dependent care expenses on your 2009
Personal Allowances Worksheet widow(er) . . . . . . . . . . . . . . . . . . $250,200 return. Generally, qualifying expenses are those
Married filing separately . . . . . . . . . . $125,100 you pay for the care of your dependent who is
Use the Personal Allowances Worksheet on Head of household . . . . . . . . . . . . . $208,500 your qualifying child under age 13 or for your
page 1 of Form W-4 to figure your withholding spouse or dependent who is not able to care for
allowances based on all of the following that If you expect your AGI to be more than that himself or herself so that you can work or look
apply. amount, use Worksheet 1-1 below to figure your for work. For more information, see Publication
reduced number of personal allowances on lines
• Exemptions. 503, Child and Dependent Care Expenses.
A, C, and D of the Personal Allowances Work- Instead of using line F, you can choose to
• Only one job. sheet. take the credit into account on line 5 of the
• Head of household filing status. Deductions and Adjustments Worksheet, as ex-
Only one job (worksheet line B). You can plained under Tax credits on page 8.
• Child and dependent care credit. claim an additional withholding allowance if any
• Child tax credit. of the following apply for 2009. Child tax credit (worksheet line G). If your
total income will be less than $61,000 ($90,000 if
• You are single, and you have only one job married), enter “2” on line G for each eligible
Exemptions (worksheet lines A, C, and D). at a time.
child. Subtract “1” from that amount if you have
You can claim one withholding allowance for
each exemption you expect to claim on your tax
• You are married, you have only one job at three or more eligible children.
a time, and your spouse does not work. If your total income will be between $61,000
return.
and $84,000 ($90,000 and $119,000 if married),
Self. You can claim an allowance for your
• Your wages from a second job or your
enter “1” on line G for each eligible child plus “1”
spouse’s wages (or the total of both) are
exemption on line A unless another person can additional if you have six or more eligible chil-
$1,500 or less.
claim an exemption for you on his or her tax dren.
return. If another person is entitled to claim an If you qualify for this allowance, enter “1” on line An eligible child is any child:
exemption for you, you cannot claim an allow- B of the worksheet.
ance for your exemption even if the other person • Who is your son, daughter, stepchild, fos-
will not claim your exemption or the exemption Head of household filing status (worksheet ter child, brother, sister, stepbrother, step-
will be reduced. line E). Generally, you can file as head of sister, or a descendant of any of them (for
example, your grandchild),
Worksheet 1-1. Personal Allowances Worksheet (Form W-4) • Who will be under age 17 at the end of
Reduction of Personal Allowances if AGI Above 2009,
Phaseout Threshold • Who will not provide over half of his or her
own support for 2009,
1. Enter the total number of allowances on lines A, C, and D of the • Who will live with you for more than half of
Personal Allowances Worksheet without regard to the phaseout rule 1. 2009,
• Who is a U.S. citizen, U.S. national, or a
2. Enter your expected AGI . . . . . . . . . . . . . . . . . . 2.
resident of the United States,
3. Enter:
• For whom you will claim a personal ex-
$166,800 if single
emption,
$250,200 if married filing jointly or qualifying
widow(er) • Who will not file a joint return, unless the
$125,100 if married filing separately return is filed only as a claim for refund,
$208,500 if head of household . . . . . . . . . . . . . 3. and
4. Subtract line 3 from line 2 . . . . . . . . . . . . . . . . . . 4. • Who is younger than you.
5. Divide line 4 by $125,000 ($62,500 if married filing separately). Enter Also, if the parents of a child can claim the child
the result as a decimal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. . as an eligible child, no one else can claim the
child as an eligible child unless that person’s
6. Multiply line 1 by line 5. If the result is not a whole number, increase it AGI is higher than the highest AGI of any parent
to the next higher whole number . . . . . . . . . . . . . . . . . . . . . . . . . 6.
of the child.
7. Divide line 6 by 3.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
For more information about the child tax
8. Subtract line 7 from line 1. The total of the numbers you enter on lines credit, see the instructions in your Form 1040 or
A, C, and D of the Personal Allowances Worksheet cannot be more Form 1040A tax package.
than this amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8. Instead of using line G, you can choose to
take the credit into account on line 5 of the

Deductions and Adjustments Worksheet, as ex- 2. State and local income or sales taxes and total income for 2009 minus any estimated ad-
plained under Tax credits on page 8. property taxes. justments to income (discussed below) that you
include on line 4 of the Deductions and Adjust-
3. Sales and excise taxes paid on the
Total personal allowances (worksheet line ments Worksheet.
purchase of certain new cars, trucks,
H). Add lines A through G and enter the total
motorcycles, and motor homes. Phaseout of itemized deductions.
on line H. If you do not use either of the work-
sheets on the back of Form W-4, enter the num- For 2009, your total itemized deduc-
4. Deductible home mortgage interest.
ber from line H on line 5 of Form W-4. tions may be phased out (reduced) if
5. Investment interest up to net investment your AGI is more than $166,800 ($83,400 if
income. married filing separately). If you expect your AGI
Deductions and 6. Charitable contributions. to be more than that amount, use Worksheet 1-2
Adjustments Worksheet on page 8 to figure the amount to enter on line 1
7. Casualty and theft losses that are more of the Deductions and Adjustments Worksheet.
Use the Deductions and Adjustments Work- than $500 and 10% of your AGI. However,
sheet on page 2 of Form W-4 in the following the 10%-of-AGI limitation does not apply to
situations. a casualty loss occuring in a federally de- Adjustments to income (worksheet line 4).
clared disaster area. In addition, the $500 Enter your estimated total adjustments to in-
• You plan to itemize your deductions, claim limit for each separate casualty and the come and any additions to your standard deduc-
certain credits, or claim adjustments to the 10%-of-AGI limitation do not apply to the tion on line 4 of the Deductions and Adjustments
income on your 2009 tax return and you following disasters. Worksheet.
want to reduce your withholding.
a. The storms and tornadoes in the Kan- You can take the following adjustments to
• You are increasing your standard deduc- income into account when figuring additional
tion by certain items allowed for 2009 (see sas disaster area that began May 4,
2007. See Publication 4492-A, Informa- withholding allowances for 2009. These adjust-
Adjustments to income beginning on this
tion for Taxpayers Affected by the May ments appear on page 1 of your Form 1040 or
page).
4, 2007, Kansas Storms and Torna- 1040A.
• You have changes to any of the above does.
items and need to see if you should
• Net losses from Schedules C, D, E, and F
b. The storms, tornadoes, or flooding in of Form 1040 and from Part II of Form
change your withholding.
the Midwestern disaster area. See Pub- 4797, line 18b.
lication 4492-B, Information for Affected
Use the amount of each item you reasonably
Taxpayers in the Midwestern Disaster
• Net operating loss carryovers.
can expect to show on your return. However, do
not use more than: Areas. • Educator expenses.
8. Fully deductible miscellaneous itemized
• Certain business expenses of reservists,
1. The amount shown for that item on your
performing artists, and fee-based govern-
2008 return (or your 2007 return if you deductions, including:
ment officials.
have not yet filed your 2008 return), plus
a. Impairment-related work expenses of • Health savings account or medical savings
2. Any additional amount related to a transac- persons with disabilities, account deduction.
tion or occurrence (such as payments al-
ready made, the signing of an agreement, b. Federal estate tax on income in respect • Certain moving expenses.
or the sale of property) that you can prove of a decedent,
has happened or will happen during 2008
• Deduction for one-half of self-employment
c. Repayment of more than $3,000 of in- tax.
or 2009. come held under a claim of right that
Do not include any amount shown on your last you included in income in an earlier • Deduction for contributions to
tax return that has been disallowed by the IRS. year because at the time you thought self-employed SEP, and qualified SIMPLE
you had an unrestricted right to it, plans.
Example. On June 30, 2008, you bought d. Unrecovered investments in an annuity • Self-employed health insurance deduction.
your first home. On your 2008 tax return, you contract under which payments have
claimed itemized deductions of $6,600, the total • Penalty on early withdrawal of savings.
ceased because of the annuitant’s
mortgage interest and real estate tax you paid death, • Alimony paid.
during the 6 months you owned your home.
Based on your mortgage payment schedule and e. Gambling losses up to the amount of • IRA deduction.
your real estate tax assessment, you reasonably gambling winnings reported on your re- • Student loan interest deduction.
can expect to claim deductions of $13,200 for turn, and
those items on your 2009 return. You can use • Tuition and fees deduction.
f. Casualty and theft losses from in-
$13,200 to figure the number of your withholding come-producing property. • Jury duty pay given to your employer.
allowances for itemized deductions.
• Reforestation amortization and expenses.
9. Other miscellaneous itemized deductions
Not itemizing deductions. If you expect to that are more than 2% of your AGI, includ- • Deductible expenses related to income re-
claim the standard deduction on your tax return, ing: ported on line 21 from the rental of per-
skip lines 1 and 2, and enter “0” on line 3 of the sonal property engaged in for profit.
worksheet. a. Unreimbursed employee business ex-
penses, such as education expenses, • Repayment of certain supplemental unem-
Itemized deductions (worksheet line 1). work clothes and uniforms, union dues ployment benefits.
Enter your estimated total itemized deductions and fees, and the cost of work-related • Contributions to IRC 501(c)(18)(D) pen-
on line 1 of the worksheet. small tools and supplies, sion plans.
Listed below are some of the deductions you b. Safe deposit box rental,
can take into account when figuring additional • Attorney fees and court costs for certain
withholding allowances for 2009. You normally c. Tax counsel and assistance, and unlawful discrimination claims.
claim these deductions on Schedule A of Form d. Certain fees paid to an IRA trustee or • Attorney fees and court costs for certain
1040. custodian. whistleblower awards.
1. Medical and dental expenses that are • Estimated amount of decrease in tax at-
more than 7.5% of your 2009 AGI (defined AGI. For the purpose of estimating your tributable to income averaging using
under AGI on this page). itemized deductions, your AGI is your estimated Schedule J (Form 1040).

You also can take into account the following • Health coverage tax credit. See Form $90,000) is 6.7. Multiply your total estimated tax
special additions to the standard deduction. 8885 and instructions. credits of $2,660 by 6.7. Add the result, $17,822,
• Certain state and local real estate taxes • Residential energy credits. See Form to the amount you otherwise would show on line
you paid. 5695 and instructions. 5 of the Deductions and Adjustments Worksheet
and enter the total on line 5. Because you
• Net disaster loss attributable to a federally • District of Columbia first-time homebuyer choose to account for your child and dependent
declared disaster. credit. See Form 8859 and instructions.
care credit this way, do not make an entry on line
• Sales and excise taxes you paid on the • First-time homebuyer credit. See Form F of the Personal Allowances Worksheet.
purchase of certain vehicles. 5405.
• Making work pay credit (including special Nonwage income (worksheet line 6). Enter
Tax credits (worksheet line 5). Although you credit for government retirees). See Work- on line 6 your estimated total nonwage income
can take most tax credits into account when sheet 2-9 on page 43. (other than tax-exempt income). Nonwage in-
figuring withholding allowances, the Personal
Allowances Worksheet uses only the child and
• Carryforward from prior years of a quali- come includes interest, dividends, net rental in-
fied electric vehicle passive activity credit. come, unemployment compensation, alimony,
dependent care credit (line F) and the child tax
See Form 8834 and instructions. gambling winnings, prizes and awards, hobby
credit (line G). But you can take these credits
and others into account by adding an extra income, capital gains, royalties, and partnership
Figuring line 5 entry. To figure the amount income.
amount on line 5 of the Deductions and Adjust-
to add on line 5 for tax credits, multiply your
ments Worksheet. If line 6 is more than line 5, you may not have
estimated total credits by the appropriate num-
If you take the child and dependent care enough income tax withheld from your wages.
ber from Table 1-1 on page 9.
credit into account on line 5, do not use line F. If
See Getting the Right Amount of Tax Withheld
you take the child tax credit into account on line
Example. You are married and expect to file on page 9.
5, do not use line G.
a joint return for 2009. Your combined estimated
In addition to the child and dependent care
wages are $68,000. Your estimated tax credits
credit and the child tax credit, you can take into Net deductions and adjustments (worksheet
include a child and dependent care credit of
account the following credits. line 8). If line 7 is less than $3,500, enter “0”
$960 and a mortgage interest credit of $1,700
• Foreign tax credit, except any credit that (total credits = $2,660). on line 8. If line 7 is $3,500 or more, divide it by
applies to wages not subject to U.S. in- In Table 1-1a, the number corresponding to $3,500, drop any fraction, and enter the result on
come tax withholding because they are your combined estimated wages ($38,001 – line 8.
subject to income tax withholding by a for-
eign country. See Publication 514, Foreign Example. If line 7 is $5,200, $5,200 ÷
Tax Credit for Individuals. $3,500 = 1.49. Drop the fraction (.49) and enter
“1” on line 8.
• Credit for the elderly or the disabled. See
Publication 524, Credit for the Elderly or
the Disabled. Worksheet 1-2. Deductions and Adjustments Worksheet
(Form W-4)—Line 1
• Hope credit. See Publication 970, Tax Phaseout of Itemized Deductions
Benefits for Education.
• Lifetime learning credit. See Publication
970. 1. Enter the estimated total of your itemized deductions . . . . . . . . . . . . . 1.
• Retirement savings contributions credit 2. Enter the amount included in line 1 for medical and dental expenses,
(saver’s credit). See Publication 590. investment interest, casualty or theft losses, and gambling losses. Also
include in the total any amount included as a carryover of charitable
• Mortgage interest credit. See Publication contributions that you elected to treat as a qualified contribution for relief
530, Tax Information for Homeowners. efforts in a Midwestern disaster area . . . . . . . . . . . . . . . . . . . . . . . . 2.
• Adoption credit. See the Instructions for 3. Is the amount on line 2 less than the amount on line 1?
Form 8839. M No. Stop here. Your deduction is not limited. Enter the amount from
line 1 above on line 1 of the Deductions and Adjustments Worksheet.
• Credit for prior year minimum tax (both M Yes. Subtract line 2 from line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
refundable and nonrefundable) if you paid
alternative minimum tax in an earlier year. 4. Multiply line 3 by 80% (.80) . . . . . . . . . . . . . . . . . . 4.
See the Instructions for Form 8801.
5. Enter your expected AGI . . . . . . . . . . . . . . . . . . . 5.
• General business credit. See the Instruc- 6. Enter $166,800 ($83,400 if married filing separately) 6.
tions for Form 3800.
7. Is the amount on line 6 less than the amount on line 5?
• Earned income credit, unless you re-
quested advance payment of the credit. M No. Stop here. Your deduction is not limited. Enter
See Publication 596. the amount from line 1 above on line 1 of the
Deductions and Adjustments Worksheet.
• Alternative motor vehicle credit (including
the plug-in conversion credit). See Form M Yes. Subtract line 6 from line 5 . . . . . . . . . . . . . 7.
8910, Part III, and the instructions. 8. Multiply line 7 by 3% (.03) . . . . . . . . . . . . . . . . . . 8.
• Alternative fuel vehicle refueling property 9. Enter the smaller of line 4 or line 8 . . . . . . . . . . . . . . . . . . . . . . . . . 9.
credit. See Form 8911, Part III, and the
instructions. 10. Divide line 9 by 1.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.
• Plug-in electric drive motor vehicle credit. 11. Subtract line 10 from line 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.
See Form 8834.
12. Subtract line 11 from line 1. Enter the result here and on line 1 of the
• Credit to holders of tax credit bonds. See Deductions and Adjustments Worksheet . . . . . . . . . . . . . . . . . . . . . . 12.
Form 8912 and instructions.

If you use Worksheet 1-2 and your Worksheet (or line 10 of the Deductions and Joyce and John expect to receive $600 in
! earnings are more than $130,000
($180,000 if you are married), see Pub-
Adjustments Worksheet, if used). Using Table 1
in the Two-Earners/Multiple Jobs Worksheet,
interest and dividend income during the year.
CAUTION
They enter $600 on line 6 and subtract line 6
lication 919 to check that you are having enough find the number listed beside the amount of your from line 5. They enter the result, $3,800, on line
tax withheld. estimated wages for the year from your lowest 7. They divide line 7 by $3,500, and drop the
paying job (or if lower and you are filing jointly, fraction to determine one additional allowance.
Table 1-1. Deductions and your spouse’s job). Enter that number on line 2. They enter “1” on line 8.
Adjustments However, if you are married filing jointly and
The Greens enter “9” (the number from line H
Worksheet (Form W-4) estimated wages from the highest paying job are
of the Personal Allowances Worksheet) on line 9
—Line 5 $50,000 or less, do not enter more than “3.”
Subtract line 2 from line 1 and enter the and add it to line 8. They enter “10” on line 10.
result (but not less than zero) on line 3 and on
a. Married Filing Jointly or Form W-4, line 5. If line 1 is more than or equal Two-Earners/Multiple Jobs Worksheet. The
Qualifying Widow(er) to line 2, do not use the rest of the worksheet. Greens use this worksheet because they both
If line 1 is less than line 2, enter “0” on Form work and together earn over $25,000. They
If combined income Multiply
from all sources is: credits by: W-4, line 5. Then complete lines 4 through 9 of enter “10” (the number from line 10 of the De-
the worksheet to figure the additional withhold- ductions and Adjustments Worksheet) on line 1.
$0 – 38,000 . . . . . . . . . . . . . . . . . . . 10.0 ing needed to avoid underwithholding. Next, they use Table 1 of the worksheet to
$38,001 – 90,000 . . . . . . . . . . . . . . . 6.7 find the number to enter on line 2. Because they
$90,001 – 160,000 . . . . . . . . . . . . . . 4.0 Other amounts owed. If you expect to owe will file a joint return and their expected wages
$160,001 – 250,000 . . . . . . . . . . . . . 3.6 amounts other than income tax, such as from their lowest paying job are $13,300, they
$250,001 – 410,000 . . . . . . . . . . . . . 3.0 self-employment tax, include them on line 8. The enter “2” on line 2. They subtract line 2 from line
$410,001 and over . . . . . . . . . . . . . . . 2.8 total is the additional withholding needed for the
1 and enter “8” on line 3 of the worksheet and on
year.
Form W-4, line 5.
b. Single
John and Joyce Green can take a total of 8
If combined income Multiply Illustrated Example—Form W-4 withholding allowances between them. They de-
from all sources is: credits by: cide that John will take all 8 allowances on his
Joyce Green works in a bookstore and expects Form W-4. Joyce, therefore, cannot claim any
$0 – 18,000 . . . . . . . . . . . . . . . . . . . 10.0 to earn about $13,300. Her husband, John, allowances on hers. She will enter “0” on line 5
$18,001 – 43,000 . . . . . . . . . . . . . . . 6.7 works full time at the Acme Corporation, where of the Form W-4 she gives to her employer.
$43,001 – 95,000 . . . . . . . . . . . . . . . 4.0 his expected pay is $48,500. They file a joint
$95,001 – 190,000 . . . . . . . . . . . . . . 3.6 income tax return and claim exemptions for their
$190,001 – 410,000 . . . . . . . . . . . . . 3.0 two children. Because they file jointly, they use Getting the Right Amount
$410,001 and over . . . . . . . . . . . . . . . 2.8 only one set of Form W-4 worksheets to figure of Tax Withheld
the number of withholding allowances. The
c. Head of Household Greens’ worksheets and John’s Form W-4 are In most situations, the tax withheld from your
If combined income Multiply shown in Figure 1-A, beginning on page 10. pay will be close to the tax you figure on your
from all sources is: credits by: return if you follow these two rules.
Personal Allowances Worksheet. On this
$0 – 27,000 . . . . . . . . . . . . . . . . . . . 10.0 worksheet, John and Joyce claim allowances for • You accurately complete all the Form W-4
$27,001 – 61,000 . . . . . . . . . . . . . . . 6.7 themselves and their children by entering “1” on worksheets that apply to you.
$61,001 – 135,000 . . . . . . . . . . . . . . 4.0 line A, “1” on line C, and “2” on line D. Because • You give your employer a new Form W-4
$135,001 – 220,000 . . . . . . . . . . . . . 3.6 both John and Joyce will receive wages of more when changes occur.
$220,001 – 410,000 . . . . . . . . . . . . . 3.0 than $1,500, they are not entitled to the addi-
$410,001 and over . . . . . . . . . . . . . . . 2.8 tional withholding allowance on line B. The But because the worksheets and withholding
Greens expect to have child and dependent methods do not account for all possible situa-
d. Married Filing Separately care expenses of $2,400. They enter “1” on line tions, you may not be getting the right amount
F of the worksheet. Because they are married, withheld. This is most likely to happen in the
If combined income Multiply their total income will be less than $90,000, and
from all sources is: credits by: following situations.
they have two eligible children, they enter “4” on
$0 – 19,000 . . . . . . . . . . . . . . . . . . . 10.0 line G. • You are married and both you and your
They enter their total personal allowances, spouse work.
$19,001 – 45,000 . . . . . . . . . . . . . . . 6.7
$45,001 – 80,000 . . . . . . . . . . . . . . . 4.0 “9,” on line H. • You have more than one job at a time.
$80,001 – 125,000 . . . . . . . . . . . . . . 3.6 Deductions and Adjustments Worksheet. • You have nonwage income, such as inter-
$125,001 – 205,000 . . . . . . . . . . . . . 3.0 Because they plan to itemize deductions and est, dividends, alimony, unemployment
$205,001 and over . . . . . . . . . . . . . . . 2.8 claim adjustments to income, the Greens use compensation, or self-employment in-
this worksheet to see whether they are entitled come.
to additional allowances.
The Greens’ estimated itemized deductions • You will owe additional amounts with your
Two-Earners/Multiple Jobs total $11,800, which they enter on line 1 of the return, such as self-employment tax.
Worksheet worksheet. Because they will file a joint return, • Your withholding is based on obsolete
they enter $11,400 on line 2. They subtract Form W-4 information for a substantial
Complete the Two-Earners/Multiple Jobs Work- $11,400 from $11,800 and enter the result,
sheet on page 2 of Form W-4 if you have more part of the year.
$400, on line 3.
than one job or are married and you and your The Greens expect to have an adjustment to • Your earnings are more than $130,000 if
spouse both work and the combined earnings income of $4,000 for their deductible IRA contri- you are single or $180,000 if you are mar-
from all jobs are more than $40,000 ($25,000 if butions. They do not expect to have any other ried.
married). adjustments to income. They enter $4,000 on • You work only part of the year.
Reducing your allowances (worksheet lines line 4.
1 – 3). On line 1 of the worksheet, enter the They add line 3 and line 4 and enter the total, • You change the number of your withhold-
number from line H of the Personal Allowances $4,400, on line 5. ing allowances during the year.

EPS File Name: 15008e09 Size: Width = 44.0 picas, Depth = page
Figure 1-A. Form W-4—Illustrated (John and Joyce Green)

Form W-4 (2009) Complete all worksheets that apply. However, you
may claim fewer (or zero) allowances. For regular
wages, withholding must be based on allowances
dividends, consider making estimated tax
payments using Form 1040-ES, Estimated Tax
for Individuals. Otherwise, you may owe
Purpose. Complete Form W-4 so that your you claimed and may not be a flat amount or additional tax. If you have pension or annuity
employer can withhold the correct federal income percentage of wages. income, see Pub. 919 to find out if you should
tax from your pay. Consider completing a new adjust your withholding on Form W-4 or W-4P.
Head of household. Generally, you may claim
Form W-4 each year and when your personal or head of household filing status on your tax Two earners or multiple jobs. If you have a
financial situation changes. return only if you are unmarried and pay more working spouse or more than one job, figure
Exemption from withholding. If you are than 50% of the costs of keeping up a home the total number of allowances you are entitled
exempt, complete only lines 1, 2, 3, 4, and 7 for yourself and your dependent(s) or other to claim on all jobs using worksheets from only
and sign the form to validate it. Your exemption qualifying individuals. See Pub. 501, one Form W-4. Your withholding usually will
for 2009 expires February 16, 2010. See Exemptions, Standard Deduction, and Filing be most accurate when all allowances are
Pub. 505, Tax Withholding and Estimated Tax. Information, for information. claimed on the Form W-4 for the highest
Note. You cannot claim exemption from Tax credits. You can take projected tax paying job and zero allowances are claimed on
withholding if (a) your income exceeds $950 credits into account in figuring your allowable the others. See Pub. 919 for details.
and includes more than $300 of unearned number of withholding allowances. Credits for Nonresident alien. If you are a nonresident
income (for example, interest and dividends) child or dependent care expenses and the alien, see the Instructions for Form 8233
and (b) another person can claim you as a child tax credit may be claimed using the before completing this Form W-4.
dependent on their tax return. Personal Allowances Worksheet below. See
Pub. 919, How Do I Adjust My Tax Check your withholding. After your Form W-4
Basic instructions. If you are not exempt, takes effect, use Pub. 919 to see how the
complete the Personal Allowances Worksheet Withholding, for information on converting
your other credits into withholding allowances. amount you are having withheld compares to
below. The worksheets on page 2 further adjust your projected total tax for 2009. See Pub.
your withholding allowances based on itemized Nonwage income. If you have a large amount 919, especially if your earnings exceed
deductions, certain credits, adjustments to of nonwage income, such as interest or $130,000 (Single) or $180,000 (Married).
income, or two-earner/multiple job situations.
Personal Allowances Worksheet (Keep for your records.)
A Enter “1” for yourself if no one else can claim you as a dependent A 1
兵其
● You are single and have only one job; or
B Enter “1” if: ● You are married, have only one job, and your spouse does not work; or B
● Your wages from a second job or your spouse’s wages (or the total of both) are $1,500 or less.
C Enter “1” for your spouse. But, you may choose to enter “-0-” if you are married and have either a working spouse or
more than one job. (Entering “-0-” may help you avoid having too little tax withheld.) C 1
D Enter number of dependents (other than your spouse or yourself) you will claim on your tax return D 2
E Enter “1” if you will file as head of household on your tax return (see conditions under Head of household above) E
F Enter “1” if you have at least $1,800 of child or dependent care expenses for which you plan to claim a credit F 1
(Note. Do not include child support payments. See Pub. 503, Child and Dependent Care Expenses, for details.)
G Child Tax Credit (including additional child tax credit). See Pub. 972, Child Tax Credit, for more information.
● If your total income will be less than $61,000 ($90,000 if married), enter “2” for each eligible child; then less “1” if you have three or more eligible children.
● If your total income will be between $61,000 and $84,000 ($90,000 and $119,000 if married), enter “1” for each eligible
child plus “1” additional if you have six or more eligible children. G 4
H Add lines A through G and enter total here. (Note. This may be different from the number of exemptions you claim on your tax return.) 䊳 H 9
兵
For accuracy, ● If you plan to itemize or claim adjustments to income and want to reduce your withholding, see the Deductions
complete all and Adjustments Worksheet on page 2.
worksheets ● If you have more than one job or are married and you and your spouse both work and the combined earnings from all jobs exceed
that apply. $40,000 ($25,000 if married), see the Two-Earners/Multiple Jobs Worksheet on page 2 to avoid having too little tax withheld.
● If neither of the above situations applies, stop here and enter the number from line H on line 5 of Form W-4 below.
Cut here and give Form W-4 to your employer. Keep the top part for your records.
Form W-4 Employee’s Withholding Allowance Certificate OMB No. 1545-0074
Department of the Treasury

Internal Revenue Service
䊳 Whether you are entitled to claim a certain number of allowances or exemption from withholding is
subject to review by the IRS. Your employer may be required to send a copy of this form to the IRS. 2009
1 Type or print your first name and middle initial. Last name 2 Your social security number
John M. Green 444 00 4444
Home address (number and street or rural route) 3
Single Married Married, but withhold at higher Single rate.
28 Fairway Note. If married, but legally separated, or spouse is a nonresident alien, check the “Single” box.
City or town, state, and ZIP code 4 If your last name differs from that shown on your social security card,
Anytown, State 00000 check here. You must call 1-800-772-1213 for a replacement card. 䊳
5 Total number of allowances you are claiming (from line H above or from the applicable worksheet on page 2) 5 8
6 Additional amount, if any, you want withheld from each paycheck 6 $
7 I claim exemption from withholding for 2009, and I certify that I meet both of the following conditions for exemption.
● Last year I had a right to a refund of all federal income tax withheld because I had no tax liability and
● This year I expect a refund of all federal income tax withheld because I expect to have no tax liability.
If you meet both conditions, write “Exempt” here 䊳 7
Under penalties of perjury, I declare that I have examined this certificate and to the best of my knowledge and belief, it is true, correct, and complete.
Employee’s signature
(Form is not valid unless you sign it.) 䊳 John M. Green Date 䊳 January 5, 2009
8 Employer’s name and address (Employer: Complete lines 8 and 10 only if sending to the IRS.) 9 Office code (optional) 10 Employer identification number (EIN)
For Privacy Act and Paperwork Reduction Act Notice, see page 2. Cat. No. 10220Q Form W-4 (2009)

Figure 1-A. Form W-4—Illustrated (John and Joyce Green) (Continued)

Form W-4 (2009) Page 2
Deductions and Adjustments Worksheet
Note. Use this worksheet only if you plan to itemize deductions, claim certain credits, adjustments to income, or an additional standard deduction.
1 Enter an estimate of your 2009 itemized deductions. These include qualifying home mortgage interest,
charitable contributions, state and local taxes, medical expenses in excess of 7.5% of your income, and
miscellaneous deductions. (For 2009, you may have to reduce your itemized deductions if your income
is over $166,800 ($83,400 if married filing separately). See Worksheet 2 in Pub. 919 for details.) 1 $ 11,800
兵其
$11,400 if married filing jointly or qualifying widow(er)
2 Enter: $ 8,350 if head of household 2 $ 11,400
$ 5,700 if single or married filing separately
3 Subtract line 2 from line 1. If zero or less, enter “-0-” 3 $ 400
4 Enter an estimate of your 2009 adjustments to income and any additional standard deduction. (Pub. 919) 4 $ 4,000
5 Add lines 3 and 4 and enter the total. (Include any amount for credits from Worksheet 8 in Pub. 919.) 5 $ 4,400
6 Enter an estimate of your 2009 nonwage income (such as dividends or interest) 6 $ 600
7 Subtract line 6 from line 5. If zero or less, enter “-0-” 7 $ 3,800
8 Divide the amount on line 7 by $3,500 and enter the result here. Drop any fraction 8 1
9 Enter the number from the Personal Allowances Worksheet, line H, page 1 9 9
10 Add lines 8 and 9 and enter the total here. If you plan to use the Two-Earners/Multiple Jobs Worksheet,
also enter this total on line 1 below. Otherwise, stop here and enter this total on Form W-4, line 5, page 1 10 10
Two-Earners/Multiple Jobs Worksheet (See Two earners or multiple jobs on page 1.)
Note. Use this worksheet only if the instructions under line H on page 1 direct you here.
1 Enter the number from line H, page 1 (or from line 10 above if you used the Deductions and Adjustments Worksheet) 1 10
2 Find the number in Table 1 below that applies to the LOWEST paying job and enter it here. However, if
you are married filing jointly and wages from the highest paying job are $50,000 or less, do not enter more
than “3.” 2 2
3 If line 1 is more than or equal to line 2, subtract line 2 from line 1. Enter the result here (if zero, enter
“-0-”) and on Form W-4, line 5, page 1. Do not use the rest of this worksheet 3 8
Note. If line 1 is less than line 2, enter “-0-” on Form W-4, line 5, page 1. Complete lines 4–9 below to calculate the additional
withholding amount necessary to avoid a year-end tax bill.
4 Enter the number from line 2 of this worksheet 4
5 Enter the number from line 1 of this worksheet 5
6 Subtract line 5 from line 4 6
7 Find the amount in Table 2 below that applies to the HIGHEST paying job and enter it here 7 $
8 Multiply line 7 by line 6 and enter the result here. This is the additional annual withholding needed 8 $
9 Divide line 8 by the number of pay periods remaining in 2009. For example, divide by 26 if you are paid
every two weeks and you complete this form in December 2008. Enter the result here and on Form W-4,
line 6, page 1. This is the additional amount to be withheld from each paycheck 9 $
Table 1 Table 2
Married Filing Jointly All Others Married Filing Jointly All Others
If wages from LOWEST Enter on If wages from LOWEST Enter on If wages from HIGHEST Enter on If wages from HIGHEST Enter on
paying job are— line 2 above paying job are— line 2 above paying job are— line 7 above paying job are— line 7 above
$0 - $4,500 0 $0 - $6,000 0 $0 - $65,000 $550 $0 - $35,000 $550
4,501 - 9,000 1 6,001 - 12,000 1 65,001 - 120,000 910 35,001 - 90,000 910
9,001 - 18,000 2 12,001 - 19,000 2 120,001 - 185,000 1,020 90,001 - 165,000 1,020
18,001 - 22,000 3 19,001 - 26,000 3 185,001 - 330,000 1,200 165,001 - 370,000 1,200
22,001 - 26,000 4 26,001 - 35,000 4 330,001 and over 1,280 370,001 and over 1,280
26,001 - 32,000 5 35,001 - 50,000 5
32,001 - 38,000 6 50,001 - 65,000 6
38,001 - 46,000 7 65,001 - 80,000 7
46,001 - 55,000 8 80,001 - 90,000 8
55,001 - 60,000 9 90,001 - 120,000 9
60,001 - 65,000 10 120,001 and over 10
65,001 - 75,000 11
75,001 - 95,000 12
95,001 - 105,000 13
105,001 - 120,000 14
120,001 and over 15
Privacy Act and Paperwork Reduction Act Notice. We ask for the information on You are not required to provide the information requested on a form that is
this form to carry out the Internal Revenue laws of the United States. The Internal subject to the Paperwork Reduction Act unless the form displays a valid OMB
Revenue Code requires this information under sections 3402(f)(2)(A) and 6109 and control number. Books or records relating to a form or its instructions must be
their regulations. Failure to provide a properly completed form will result in your retained as long as their contents may become material in the administration of
being treated as a single person who claims no withholding allowances; providing any Internal Revenue law. Generally, tax returns and return information are
fraudulent information may also subject you to penalties. Routine uses of this confidential, as required by Code section 6103.
information include giving it to the Department of Justice for civil and criminal The average time and expenses required to complete and file this form will vary
litigation, to cities, states, the District of Columbia, and U.S. commonwealths and depending on individual circumstances. For estimated averages, see the
possessions for use in administering their tax laws, and using it in the National instructions for your income tax return.
Directory of New Hires. We may also disclose this information to other countries If you have suggestions for making this form simpler, we would be happy to hear
under a tax treaty, to federal and state agencies to enforce federal nontax criminal from you. See the instructions for your income tax return.
laws, or to federal law enforcement and intelligence agencies to combat terrorism.

Part-Year Method off for more than 30 days, do not count Cumulative Wage Method
those days. You will not meet this require-
If you work only part of the year and your em- ment if you begin working before May 1 If you change the number of your withholding
ployer agrees to use the part-year withholding and expect to work for the rest of the year. allowances during the year, too much or too little
method, less tax will be withheld from each tax may have been withheld for the period
wage payment than would be withheld if you before you made the change. You may be able
worked all year. To be eligible for the part-year How to apply for the part-year method. You to compensate for this if your employer agrees
method, you must meet both of the following must ask in writing that your employer use this to use the cumulative wage withholding method
requirements. method. The request must state all three of the
for the rest of the year. You must ask your
following.
• You must use the calendar year (the 12 employer in writing to use this method.
months from January 1 through December • The date of your last day of work for any To be eligible, you must have been paid for
31) as your tax year. You cannot use a prior employer during the current calendar the same kind of payroll period (weekly, bi-
fiscal year. year. weekly, etc.) since the beginning of the year.
• You must not expect to be employed for • That you do not expect to be employed
more than 245 days during the current cal-
more than 245 days during the year. To
endar year. Publication 919
figure this limit, count all calendar days
that you are employed (including week- • That you use the calendar year as your To make sure you are getting the right amount of
ends, vacations, and sick days) beginning tax year. tax withheld, get Publication 919. It will help you
with the first day you are on the job for pay compare the total tax to be withheld during the
and ending with your last day of work. If year with the tax you can expect to figure on
you are temporarily laid off for 30 days or your return. It also will help you determine how
less, count those days too. If you are laid much, if any, additional withholding is needed
Figure 1-B. Exemption From Withholding on Form W-4

Note. Do not use this chart if you are 65 or older or blind, or if you will itemize your deductions, claim exemptions for dependents,
or claim tax credits. Instead, see the discussions in this chapter under Exemption From Withholding.
Start Here
For 2008, did you have a

right to a refund of ALL No You CANNOT claim
federal income tax withheld 䊳 exemption from
because you had NO tax withholding.
liability?
䊱
Yes Yes
Will your 2009 total income be more than the amount shown below for
your filing status?
䊲
Single $9,350
For 2009, will Head of household 12,000
someone (such as No Married filing separately for
your parent) be able 䊳 BOTH 2008 and 2009 9,350
to claim you as a
Other married status (include BOTH
dependent?
spouses’ income whether filing
separately or jointly) 18,700
Yes
Qualifying widow(er) 15,050
䊲 No
Will your 2009 income No

be more than $950?
Yes
䊲
䊲䊲
Will your 2009 income
include more than $300 Yes You CANNOT claim You CAN claim
of unearned income
䊳 exemption from exemption from
(interest, dividends, etc.)? withholding. withholding.
䊱䊱
No No
Will your 2009 total income be

䊳 $5,700 or less?
Yes

each payday to avoid owing tax when you file your employer will be required to withhold based $375 was refunded when you filed your 2008
your return. If you do not have enough tax with- on the original lock-in letter. return. Using Figure 1-B, you find that you can
held, you may have to pay estimated tax. See After the lock-in letter takes effect, your em- claim exemption from withholding.
chapter 2 for information about estimated tax. ployer must withhold tax on the basis of the
withholding rate (marital status) and maximum Example 2. The facts are the same as in
Rules Your Employer number of withholding allowances specified in Example 1, except that you also have a savings
that letter.
Must Follow If you later believe that you are entitled to
account and expect to have $350 interest in-
come during the year. Using Figure 1-B, you find
It may be helpful for you to know some of the claim exemption from withholding or more al- that you cannot claim exemption from withhold-
withholding rules your employer must follow. lowances than the IRS determined, you can ing because your unearned income will be more
These rules can affect how to fill out your Form complete a new Form W-4 and a written state- than $300 and your total income will be more
W-4 and how to handle problems that may arise. ment to support the claims made on the Form than $950.
W-4 and send them directly to the IRS address
New Form W-4. When you start a new job, shown on the lock-in letter. Your employer must You may have to file a tax return, even
your employer should give you a Form W-4 to fill continue to figure your withholding on the basis ! if you are exempt from withholding.
See Publication 501 to see whether
out. Beginning with your first payday, your em- of the number of allowances previously deter- CAUTION
ployer will use the information you give on the mined by the IRS until the IRS advises your you must file a return.
form to figure your withholding. employer otherwise.
Age 65 or older or blind. If you are 65
If you later fill out a new Form W-4, your At any time, either before or after the lock-in
or older or blind, use Worksheet 1-3 or
employer can put it into effect as soon as possi- letter becomes effective, you may give your em-
Worksheet 1-4 on page 14 to help you
ble. The deadline for putting it into effect is the ployer a new Form W-4 that does not claim
decide whether you can claim exemption from
start of the first payroll period ending 30 or more complete exemption from withholding and re-
withholding. Do not use either worksheet if you
days after you turn it in. sults in more income tax withheld than specified
will itemize deductions, claim exemptions for
in the lock-in letter. Your employer must then
No Form W-4. If you do not give your em- dependents, or claim tax credits on your 2009
withhold tax based on this new Form W-4.
ployer a completed Form W-4, your employer return. Instead, see Itemizing deductions or
Additional information is available on the IRS
must withhold at the highest rate, as if you were claiming exemptions or credits next.
website at www.irs.gov. Enter “withholding com-
single and claimed no withholding allowances. pliance questions” in the search box.
Itemizing deductions or claiming exemp-
Repaying withheld tax. If you find you are
tions or credits. If you had no tax liability for
having too much tax withheld because you did Exemption From Withholding 2008, and you will:
not claim all the withholding allowances you are
entitled to, you should give your employer a new If you claim exemption from withholding, your • Itemize deductions,
Form W-4. Your employer cannot repay any of employer will not withhold federal income tax
the tax previously withheld. Instead, claim the from your wages. The exemption applies only to • Claim an exemption for a dependent, or
full amount withheld when you file your tax re- income tax, not to social security or Medicare • Claim a tax credit,
turn. tax.
You can claim exemption from withholding use the 2009 Estimated Tax Worksheet in Form
However, if your employer has withheld
for 2009 only if both of the following situations 1040-ES (also see chapter 2), to figure your
more than the correct amount of tax for the Form
apply. 2009 expected tax liability. You can claim ex-
W-4 you have in effect, you do not have to fill out
emption from withholding only if your total ex-
a new Form W-4 to have your withholding low- • For 2008 you had a right to a refund of all pected tax liability (line 13c of the worksheet) is
ered to the correct amount. Your employer can federal income tax withheld because you zero.
repay the amount that was withheld incorrectly. had no tax liability.
If you are not repaid, your Form W-2, Wage and
• For 2009 you expect a refund of all federal Claiming exemption from withholding. To
Tax Statement, will reflect the full amount actu-
income tax withheld because you expect claim exemption, you must give your employer a
ally withheld, which you would claim when you
to have no tax liability. Form W-4. Do not complete lines 5 and 6. Enter
file your tax return.
“Exempt” on line 7.
IRS review of your withholding. Whether Use Figure 1-B on page 12 to help you decide If you claim exemption, but later your situa-
you are entitled to claim a certain number of whether you can claim exemption from withhold- tion changes so that you will have to pay income
allowances or a complete exemption from with- ing. Do not use Figure 1-B if you: tax after all, you must file a new Form W-4 within
holding is subject to review by the IRS. Your 10 days after the change. If you claim exemption
employer may be required to send a copy of the • Are 65 or older, in 2009 but you expect to owe income tax for
Form W-4 to the IRS. There is a penalty for • Are blind, 2010, you must file a new Form W-4 by Decem-
supplying false information on Form W-4. See ber 1, 2009.
Penalties on page 14. • Will itemize deductions on your 2009 re-
turn, Your claim of exempt status may be re-
If the IRS determines that you cannot claim viewed by the IRS. See IRS review of your
more than a specified number of withholding • Will claim an exemption for a dependent withholding on this page.
allowances or claim a complete exemption from on your 2009 return, or
withholding, the IRS will issue a notice of the An exemption is good for only one year.
maximum number of withholding allowances • Will claim any tax credits on your 2009 You must give your employer a new Form W-4
permitted (commonly referred to as a “lock-in return. by February 15 each year to continue your ex-
letter”) to both you and your employer. These situations are discussed later. emption.
The IRS will provide a period of time during
which you can dispute the determination before Students. If you are a student, you are not Supplemental Wages
your employer adjusts your withholding. If you automatically exempt. If you work only part time
believe that you are entitled to claim complete or during the summer, you may qualify for ex- Supplemental wages include bonuses, commis-
exemption from withholding or claim more with- emption from withholding. sions, overtime pay, vacation allowances, cer-
holding allowances than the maximum number tain sick pay, and expense allowances under
specified by the IRS in the lock-in letter, you Example 1. You are a high school student certain plans. The payer can figure withholding
must submit a new Form W-4 and a written and expect to earn $2,500 from a summer job. on supplemental wages using the same method
statement to support your claims to the IRS. You do not expect to have any other income used for your regular wages. However, if these
Contact information (a toll-free number and an during the year, and your parents will be able to payments are identified separately from regular
IRS office address) will be provided in the lock-in claim an exemption for you on their tax return. wages, your employer or other payer of supple-
letter. At the end of this period, if you have not You worked last summer and had $375 federal mental wages can withhold income tax from
responded or if your response is not adequate, income tax withheld from your pay. The entire these wages at a flat rate.

Expense allowances. Reimbursements or • You must return any excess reimburse- advances and you comply within 120 days
other expense allowances paid by your em- ment or allowance within a reasonable pe- of the statement.
ployer under a nonaccountable plan are treated riod of time.
as supplemental wages. A nonaccountable plan
Nonaccountable plan. Any plan that does not
is a reimbursement arrangement that does not An excess reimbursement or allowance is meet the definition of an accountable plan is
require you to account for, or prove, your busi- any amount you are paid that is more than the considered a nonaccountable plan.
ness expenses to your employer or does not business-related expenses that you adequately For more information about accountable and
require you to return your employer’s payments accounted for to your employer. nonaccountable plans, see chapter 6 of Publica-
that are more than your proven expenses. The definition of reasonable period of time tion 463, Travel, Entertainment, Gift, and Car
Reimbursements or other expense al- depends on the facts and circumstances of your Expenses.
lowances paid under an accountable plan that situation. However, regardless of those facts
are more than your proven expenses are treated
as paid under a nonaccountable plan if you do
and circumstances, actions that take place
within the times specified in the following list will
Penalties
not return the excess payments within a reason- be treated as taking place within a reasonable
able period of time. You may have to pay a penalty of $500 if both of
period of time. the following apply.
Accountable plan. To be an accountable • You receive an advance within 30 days of
plan, your employer’s reimbursement or allow-
• You make statements or claim withholding
the time you have an expense. allowances on your Form W-4 that reduce
ance arrangement must include all three of the
• You adequately account for your ex- the amount of tax withheld.
following rules.
• Your expenses must have a business con-
penses within 60 days after they were paid • You have no reasonable basis for those
or incurred. statements or allowances at the time you
nection. That is, you must have paid or
• You return any excess reimbursement prepare your Form W-4.
incurred deductible expenses while per-
forming services as an employee of your within 120 days after the expense was
There is also a criminal penalty for willfully
employer. paid or incurred.
supplying false or fraudulent information on your
• You must adequately account to your em- • You are given a periodic statement (at Form W-4 or for willfully failing to supply informa-
ployer for these expenses within a reason- least quarterly) that asks you to either re- tion that would increase the amount withheld.
able period of time. turn or adequately account for outstanding The penalty upon conviction can be either a fine
Worksheet 1-3. Exemption From Withholding for Worksheet 1-4. Exemption From Withholding for
Persons Age 65 or Older or Blind Dependents Age 65 or Older or
Use this worksheet only if, for 2008 you had a right to a refund of all federal Blind
income tax withheld because you had no tax liability. Use this worksheet only if, for 2009, you are a dependent and if, for 2008,
Caution. This worksheet does not apply if you can be claimed as a you had a right to a refund of all federal income tax withheld because you
dependent. See Worksheet 1-4 instead. had no tax liability.
1. Check the boxes below that apply to you. 1. Enter your expected earned income plus $300 1.
65 or older M Blind M 2. Minimum amount . . . . . . . . . . . . . . . . . . . . 2. $ 950
2. Check the boxes below that apply to your spouse if you will claim 3. Compare lines 1 and 2. Enter the larger
your spouse’s exemption on your 2009 return. amount . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
65 or older M Blind M 4. Limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. 5,700
3. Add the number of boxes you checked in 5. Compare lines 3 and 4. Enter the smaller
1 and 2 above. Enter the result . . . . . . . . amount . . . . . . . . . . . . . . . . . . . . . . . . . . 5.
6. Enter the appropriate amount from the
You can claim exemption from withholding if: following table . . . . . . . . . . . . . . . . . . . . . . 6.
and the and your Single
number on 2009 total Either 65 or older or blind $1,400
line 3 above income will be Both 65 or older and blind 2,800
Your filing status is: is: no more than:
Married filing separately
Single 1 $10,750 Either 65 or older or blind 1,100
2 12,150 Both 65 or older and blind 2,200
Head of 1 $13,400 7. Add lines 5 and 6. Enter the result . . . . . . . . 7.
household 2 14,800 8. Enter your total expected income . . . . . . . . . 8.
Married filing 1 $10,450 You can claim exemption from withholding if line 7 is equal to or more
separately for 2 11,550 than line 8. You cannot claim exemption from withholding if line 8 is
both 2008 and 3 12,650 more than line 7.
2009 4 13,750
Other married 1 $19,800*
status 2 20,900*
3 22,000*
4 23,100*
* Include both spouses’ income whether you will file separately or jointly.
Qualifying 1 $16,150
widow(er) 2 17,250
You cannot claim exemption from withholding if your total income will
be more than the amount shown for your filing status.

of up to $1,000 or imprisonment for up to 1 year, enough tax withheld, or are paying enough esti- employer can use a reasonable estimate. Your
or both. mated tax (see chapter 2), to cover all your tip employer must determine the actual value of the
These penalties will apply if you deliberately income. benefit by January 31 of the next year. If the
and knowingly falsify your Form W-4 in an at- actual value is more than the estimate, your
tempt to reduce or eliminate the proper withhold- Allocated tips. If you work in a large estab- employer must pay the IRS any additional with-
ing of taxes. A simple error or an honest mistake lishment that serves food or beverages to cus- holding tax required. Your employer has until
will not result in one of these penalties. For tomers, your employer may have to report an April 1 of that next year to recover from you the
example, a person who has tried to figure the allocated amount of tips on your Form W-2. additional income tax paid to the IRS for you.
number of withholding allowances correctly, but Your employer should not withhold income
claims seven when the proper number is six, will tax, Medicare tax, and social security or railroad How your employer reports your benefits.
not be charged a Form W-4 penalty. However, retirement tax on the allocated amount. With- Your employer must report on Form W-2 the
see chapter 4 for information on the penalty for holding is based only on your pay plus your total of the taxable fringe benefits paid or treated
underpaying your tax. reported tips. Your employer should refund to as paid to you during the year and the tax with-
you any incorrectly withheld tax. held for the benefits. These amounts can be
shown either on the Form W-2 for your regular
More information. For more information on pay or on a separate Form W-2. If your employer
Tips the reporting and withholding rules for tip in- provided you with a car, truck, or other motor
vehicle and chose to treat all of your use of it as
come and on tip allocation, get Publication 531,
The tips you receive while working on your job Reporting Tip Income. personal, its value must be either separately
are considered part of your pay. You must in- shown on Form W-2 or reported to you on a
clude your tips on your tax return on the same separate statement.
line as your regular pay. However, tax is not
withheld directly from tip income, as it is from
your regular pay. Nevertheless, your employer
Taxable Fringe More information. For information on fringe
benefits, see Fringe Benefits under Employee
will take into account the tips you report when Benefits Compensation in Publication 525, Taxable and
Nontaxable Income.
figuring how much to withhold from your regular
pay. The value of certain noncash fringe benefits you
receive from your employer is considered part of
Reporting tips to your employer. If you re- your pay. Your employer generally must with-
ceive tips of $20 or more in a month while work-
ing for any one employer, you must report to
hold income tax on these benefits from your Sick Pay
regular pay.
your employer the total amount of tips you re- Sick pay is a payment to you to replace your
Although the value of your personal use of
ceive on the job during the month. The report is regular wages while you are temporarily absent
an employer-provided car, truck, or other high-
due by the 10th day of the following month. from work due to sickness or personal injury. To
way motor vehicle is taxable, your employer can
If you have more than one job, make a sepa- choose not to withhold income tax on that qualify as sick pay, it must be paid under a plan
rate report to each employer. Report only the amount. Your employer must notify you if this to which your employer is a party.
tips you received while working for that em- choice is made. If you receive sick pay from your employer or
ployer, and only if they total $20 or more for the an agent of your employer, income tax must be
month. When benefits are considered paid. Your withheld. An agent who does not pay regular
employer can choose to treat a fringe benefit as wages to you may choose to withhold income
How employer figures amount to withhold. paid by the pay period, by the quarter, or on tax at a flat rate.
The tips you report to your employer are counted some other basis as long as the benefit is con-
as part of your income for the month you report However, if you receive sick pay from a third
sidered paid at least once a year. Your employer party who is not acting as an agent of your
them. Your employer can figure your withholding can treat the benefit as being paid on one or
in either of two ways. employer, income tax will be withheld only if you
more dates during the year, even if you get the choose to have it withheld. See Form W-4S
• By withholding at the regular rate on the entire benefit at one time. below.
sum of your pay plus your reported tips. Special rule. Your employer can choose to If you receive payments under a plan in
• By withholding at the regular rate on your treat a benefit provided during November or which your employer does not participate (such
pay plus a percentage of your reported December as paid in the next year. Your em- as an accident or health plan where you paid all
tips. ployer must notify you if this rule is used. the premiums), the payments are not sick pay
and usually are not taxable.
Example. Your employer considers the
Not enough pay to cover taxes. If your regu- value of benefits paid from November 1, 2007, Union agreements. If you receive sick pay
lar pay is not enough for your employer to with- through October 31, 2008, as paid to you in under a collective bargaining agreement be-
hold all the tax (including income tax, Medicare 2008. To determine the total value of benefits tween your union and your employer, the agree-
tax, and social security or railroad retirement paid to you in 2009, your employer will add the ment may determine the amount of income tax
tax) due on your pay plus your tips, you can give value of any benefits paid in November and withholding. See your union representative or
your employer money to cover the shortage. December of 2008 to the value of any benefits your employer for more information.
If you do not give your employer money to paid in January through October of 2009.
cover the shortage, your employer first with-
Exceptions. Your employer cannot choose Form W-4S. If you choose to have income tax
holds as much Medicare tax and social security
when to withhold tax on the transfer of either real withheld from sick pay paid by a third party, such
or railroad retirement tax as possible, up to the
property or personal property of a kind normally as an insurance company, you must fill out Form
proper amount, and then withholds income tax
up to the full amount of your pay. If not enough held for investment (such as stock). Your em- W-4S. Its instructions contain a worksheet you
tax is withheld, you may have to pay estimated ployer must withhold tax on these benefits at the can use to figure the amount you want withheld.
tax. When you file your return, you also may time of the transfer. They also explain restrictions that may apply.
have to pay any Medicare tax and social security Give the completed form to the payer of your
or railroad retirement tax your employer could How withholding is figured. Your employer sick pay. The payer must withhold according to
not withhold. can either add the value of a fringe benefit to your directions on the form.
your regular pay and figure income tax withhold- Form W-4S remains in effect until you
Tips not reported to your employer. On your ing on the total or withhold a flat percentage of change or cancel it, or stop receiving payments.
tax return, you must report all the tips you re- the benefit’s value. You can change your withholding by giving a
ceive during the year, even tips you do not report If the benefit’s actual value cannot be deter- new Form W-4S or a written notice to the payer
to your employer. Make sure you are having mined when it is paid or treated as paid, your of your sick pay.

Estimated tax. If you do not request withhold- Payments to the Social Security Adminis- tax-sheltered annuity that is not any of the fol-
ing on Form W-4S, or if you do not have enough tration. lowing.
tax withheld, you may have to pay estimated tax.
• Payments from a state or local deferred 1. A required minimum distribution.
If you do not pay enough tax, either through
compensation plan (section 457 plan).
estimated tax or withholding, or a combination of 2. One of a series of substantially equal peri-
both, you may have to pay a penalty. See chap- odic pension or annuity payments made
ters 2 and 4. Withholding rules. The withholding rules for over:
pensions and annuities differ from those for sal-
aries and wages in the following ways. a. Your life (or your life expectancy) or the
joint lives of you and your beneficiary
• If you do not fill out a withholding certifi-
Pensions and cate, tax will be withheld as if you were
(or your life expectancies), or
married and claiming three withholding al- b. A specified period of 10 or more years.
Annuities lowances. This means that tax will be with-
held only if your pension or annuity is at 3. A hardship distribution.
Income tax usually will be withheld from your least $1,600 a month (or $19,200 a year).
pension or annuity distributions unless you The payer of a distribution must withhold at a
choose not to have it withheld. This rule applies • You can choose not to have tax withheld, flat 20% rate on any part of an ERD that is
to distributions from: regardless of how much tax you owed last distributed rather than rolled over directly to an-
year or expect to owe this year. You do other qualified plan. You cannot elect not to
• A traditional individual retirement arrange- not have to qualify for exemption. See have withholding on these distributions. No with-
ment (IRA); Choosing Not To Have Income Tax With- holding is required on any part rolled over di-
• A life insurance company under an en- held on this page. rectly to another plan.
dowment, annuity, or life insurance con- • If you do not give the payer your social
tract; security number (in the required manner) Choosing Not To Have
• A pension, annuity, or profit-sharing plan; or the IRS notifies the payer before any Income Tax Withheld
payment or distribution is made that you
• A stock bonus plan; and gave an incorrect social security number, For payments other than ERDs, you can choose
tax will be withheld as if you were single not to have income tax withheld. The payer will
• Any other plan that defers the time you
and were claiming no withholding al- tell you how to make this choice. If you use Form
receive compensation.
lowances. This means that tax will be with- W-4P, check the box on line 1 to make this
held if your pension or annuity is at least choice. This choice will remain in effect until you
The amount withheld depends on whether
$230 a month (or $2,760 a year). decide you want withholding.
you receive payments spread out over more
The payer must withhold if either of the fol-
than 1 year (periodic payments), within 1 year
lowing applies:
(nonperiodic payments), or as an eligible rollo- Effective date of withholding certificate. If
ver distribution (ERD). You cannot choose not to you give your withholding certificate (Form • You do not give the payer your social se-
have income tax withheld from an ERD. ERDs W-4P or a similar form) to the payer on or before curity number (in the required manner), or
are discussed on this page under Eligible Rollo- the date your payments start, it will be put into • The IRS notifies the payer, before any
ver Distributions. effect by the first payment made more than 30 payment or distribution is made, that you
days after you submit the certificate. gave it an incorrect social security num-
Nontaxable part. The part of your pension or If you give the payer your certificate after ber.
annuity that is a return of your investment in your your payments start, it will be put into effect with
retirement plan (the amount you paid into the the first payment which is at least 30 days after If you do not have any income tax withheld
plan or its cost to you) is not taxable. Income tax you submit it. However, the payer can elect to from your pension or annuity, or if you do not
will not be withheld from the part of your pension put it into effect earlier. have enough withheld, you may have to pay
or annuity that is not taxable. The tax withheld
estimated tax. See chapter 2.
will be figured on, and cannot be more than, the
taxable part.
Nonperiodic Payments If you do not pay enough tax, either through
estimated tax or withholding, or a combination of
For information about figuring the part of Tax will be withheld at a flat 10% rate on any both, you may have to pay a penalty. See chap-
your pension or annuity that is not taxable, see nonperiodic payments you receive, unless you ter 4.
Publication 575. tell the payer not to withhold.
Because withholding on nonperiodic pay- Payments delivered outside the United
Periodic Payments ments does not depend on withholding al- States. You generally must have tax withheld
lowances or whether you are married or single, from pension or annuity benefits delivered
Withholding from periodic payments of a pen- you cannot use Form W-4P to tell the payer how outside the United States. However, if you are a
sion or annuity is figured in the same way as much to withhold. But you can use Form W-4P U.S. citizen or resident alien, you can choose
withholding from salaries and wages. To tell the to specify that an additional amount be withheld. not to have tax withheld if you give the payer of
payer of your pension or annuity how much you You also can use Form W-4P to choose not to the benefits a home address in the United States
want withheld, fill out Form W-4P or a similar have tax withheld or to revoke a choice not to or in a U.S. possession. The payer must with-
form provided by the payer. Follow the rules have tax withheld. hold tax if you provide a U.S. address for a
discussed under Salaries and Wages, starting nominee, trustee, or agent to whom the benefits
You may need to use Form W-4P to are to be delivered, but do not provide your own
on page 4, to fill out your Form W-4P.
!
CAUTION
ask for additional withholding. If you do
not have enough tax withheld, you may
home address in the United States or in a U.S.
Note. Use Form W-4, not Form W-4P, if you possession.
need to pay estimated tax, as explained in chap-
receive any of the following.
ter 2. Notice required of payer. The payer of your
• Military retirement pay. pension or annuity must send you a notice telling
you about your right to choose not to have tax
• Payments from certain nonqualified de- Eligible Rollover withheld.
ferred compensation plans. These are em- Distributions Generally, the payer will not send a notice to
ployer plans that pay part of your
you if it is reasonable to believe that the entire
compensation at a later time, but are not A distribution you receive that is eligible to be amount you will be paid is not taxable.
tax-qualified deferred compensation plans. rolled over tax free into a qualified retirement or
See Nonqualified Deferred Compensation annuity plan is called an eligible rollover distribu- Revoking a choice not to have tax withheld.
and Section 457 Plans in Publication 957, tion (ERD). This is the taxable part of any distri- The payer of your pension or annuity will tell you
Reporting Back Pay and Special Wage bution from a qualified pension plan or how to revoke your choice not to have income

tax withheld from periodic or nonperiodic pay- Identical wagers include two bets placed in a To make this choice, fill out Form W-4V (or a
ments. If you use Form W-4P to revoke the pari-mutuel pool on one horse to win a particular similar form provided by the payer) and give it to
choice, enter “Revoked” by the checkbox on line race. However, the bets are not identical if one the payer.
1 of the form. This will instruct the payer to bet is “to win” and one bet is “to place.” In If you do not choose to have income tax
withhold as if you were married and claiming addition, they are not identical if the bets were withheld, you may have to pay estimated tax.
three allowances. However, you can tell the placed in different pari-mutuel pools. For exam- See chapter 2.
payer exactly how much to withhold by complet- ple, a bet in a pool conducted by the racetrack If you do not pay enough tax, either through
ing line 2 of the form. and a bet in a separate pool conducted by an withholding or estimated tax, or a combination of
offtrack betting establishment in which the bets both, you may have to pay a penalty. See chap-
are not pooled with those placed at the track are ter 4.
not identical wagers.
Gambling Winnings Backup withholding on gambling winnings.
More information. For more information
about the tax treatment of social security and
If you have any kind of gambling winnings and railroad retirement benefits, get Publication 915,
Income tax is withheld at a flat 25% rate from do not give the payer your social security num- Social Security and Equivalent Railroad Retire-
certain kinds of gambling winnings. ber, the payer may have to withhold income tax ment Benefits. Get Publication 225, Farmer’s
Gambling winnings of more than $5,000 from at a flat 28% rate. This rule also applies to Tax Guide, for information about the tax treat-
the following sources are subject to income tax winnings of at least $1,200 from bingo or slot ment of commodity credit loans or crop disaster
withholding. machines or $1,500 from keno, and to certain payments.
• Any sweepstakes; wagering pool, includ- other gambling winnings of at least $600.
ing payments made to winners of poker
tournaments; or lottery.
Backup Withholding
• Any other wager if the proceeds are at
least 300 times the amount of the bet.
Unemployment
Banks or other businesses that pay you certain
It does not matter whether your winnings are Compensation kinds of income must file an information return
paid in cash, in property, or as an annuity. Win- (Form 1099) with the IRS. The information re-
nings not paid in cash are taken into account at You can choose to have income tax withheld turn shows how much you were paid during the
their fair market value. from unemployment compensation. To make year. It also includes your name and taxpayer
this choice, you will have to fill out Form W-4V identification number (TIN). TINs are explained
Exception. Gambling winnings from bingo, (or a similar form provided by the payer) and later in this discussion.
keno, and slot machines generally are not sub- give it to the payer. These payments generally are not subject to
ject to income tax withholding. However, you The first $2,400 of unemployment compen- withholding. However, “backup” withholding is
may need to provide the payer with a social sation is excluded from income. All other unem- required in certain situations.
security number to avoid withholding. See ployment compensation is taxable. So, if you do
Backup withholding on gambling winnings on not have income tax withheld, you may have to Payments subject to backup withholding.
this page. If you receive gambling winnings not pay estimated tax. See chapter 2. Backup withholding can apply to most kinds of
subject to withholding, you may need to pay If you do not pay enough tax, either through payments that are reported on Form 1099.
estimated tax. See chapter 2. withholding or estimated tax, or a combination of These include:
If you do not pay enough tax, either through both, you may have to pay a penalty. See chap-
withholding or estimated tax, or a combination of
• Interest payments (Form 1099-INT),
ter 4.
both, you may have to pay a penalty. See chap- • Dividends (Form 1099-DIV),
ter 4. Form 1099-G. If you receive $10 or more in
unemployment compensation, you will receive a • Patronage dividends, but only if at least
Form W-2G. If a payer withholds income tax Form 1099-G, Certain Government Payments. half the payment is in money (Form
from your gambling winnings, you should re- Box 1 will show the amount of unemployment 1099-PATR),
ceive a Form W-2G, Certain Gambling Win- compensation you got for the year. Box 4 will • Rents, profits, or other gains (Form
nings, showing the amount you won and the show the amount of federal income tax withheld, 1099-MISC),
amount withheld. if any.
Report the tax withheld on your 2009 Form
• Commissions, fees, or other payments for
work you do as an independent contractor
1040, along with all other federal income tax
(Form 1099-MISC),
withheld, as shown on Forms W-2 and 1099.
Federal Payments • Payments by brokers (Form 1099-B),
Information to give payer. If the payer asks,
you must give the payer all the following infor- You can choose to have income tax withheld • Payments by fishing boat operators, but
mation. from certain federal payments you receive. only the part that is in money and that
These payments are: represents a share of the proceeds of the
• Your name, address, and social security catch (Form 1099-MISC), and
number. 1. Social security benefits, • Royalty payments (Form 1099-MISC).
• Whether you made identical wagers (ex- 2. Tier 1 railroad retirement benefits,
plained below). Backup withholding also may apply to gambling
3. Commodity credit loans you choose to in- winnings. See Backup withholding on gambling
• Whether someone else is entitled to any clude in your gross income, and winnings under Gambling Winnings on this
part of the winnings subject to withholding. page.
If so, you must complete Form 5754, 4. Payments under the Agricultural Act of
Statement by Person(s) Receiving Gam- 1949 (7 U.S.C. 1421 et seq.), as amended, Payments not subject to backup withhold-
bling Winnings, and return it to the payer. or title II of the Disaster Assistance Act of ing. Backup withholding does not apply to
The payer will use it to prepare a Form 1988 that are treated as insurance pro- payments reported on Form 1099-MISC (other
W-2G for each of the winners. ceeds and that you received because: than payments by fishing boat operators and
royalty payments) unless at least one of the
a. Your crops were destroyed or damaged
Identical wagers. You may have to give the following three situations applies.
by drought, flood, or any other natural
payer a statement of the amount of your win-
nings, if any, from identical wagers. If this state-
disaster, or • The amount you receive from any one
payer is $600 or more.
ment is required, the payer will ask you for it. b. You were unable to plant crops be-
You provide this statement by signing Form cause of a natural disaster described in • The payer had to give you a Form 1099
W-2G or, if required, Form 5754. (a). last year.

• The payer made payments to you last • A social security number (SSN). Underreported interest or dividends. If
year that were subject to backup withhold- you have been notified that you underreported
ing.
• An employer identification number (EIN).
interest or dividends, you must request and re-
• An IRS individual taxpayer identification ceive a determination from the IRS to prevent
Form 1099 and backup withholding are gener- number (ITIN). Aliens who do not have an backup withholding from starting or to stop
ally not required for a payment of less than $10. SSN and are not eligible to get one should backup withholding once it has begun. Your
get an ITIN. Use Form W-7, Application for request must show that at least one of the fol-
Withholding rules. When you open a new
IRS Individual Taxpayer Identification lowing situations applies.
account, make an investment, or begin to re-
Number, to apply for an ITIN.
ceive payments reported on Form 1099, the • No underreporting occurred.
bank or other business will give you Form W-9,
Request for Taxpayer Identification Number and
An ITIN is for tax use only. It does not entitle • You have a bona fide dispute with the IRS
you to social security benefits or change your about whether an underreporting oc-
Certification, or a similar form. You must enter
employment or immigration status under U.S. curred.
your TIN on the form and, if your account or
law. For more information on ITINs, get Publica-
investment will earn interest or dividends, you
tion 1915, Understanding Your IRS Individual • Backup withholding will cause or is caus-
also must certify (under penalties of perjury) that ing an undue hardship and it is unlikely
Taxpayer Identification Number.
your TIN is correct and that you are not subject that you will underreport interest and divi-
to backup withholding. dends in the future.
The payer must withhold at a flat 28% rate in How to prevent or stop backup withholding.
the following situations. If you have been notified by a payer that the TIN • You have corrected the underreporting by
you gave is incorrect, you usually can prevent filing an original return if you did not previ-
• You do not give the payer your TIN in the backup withholding from starting or stop backup ously file one, or by filing an amended
required manner. withholding once it has begun by giving the return, and by paying all taxes, penalties,
• The IRS notifies the payer that the TIN payer your correct name and TIN. You must and interest due for any underreported in-
you gave is incorrect. certify that the TIN you give is correct. terest or dividend payments.
However, the payer will provide additional
• You are required, but fail, to certify that instructions if the TIN you gave needs to be If the IRS determines that backup withholding
you are not subject to backup withholding. validated by the Social Security Administration should stop, it will provide you with certification
• The IRS notifies the payer to start with- or by the IRS. This may happen if both the and will notify the payers who were sent notices
holding on interest or dividends because following conditions exist. earlier.
you have underreported interest or divi-
1. The IRS notifies the payer twice within 3
dends on your income tax return. The IRS Penalties. There are civil and criminal penal-
calendar years that a TIN you gave for the
will do this only after it has mailed you four ties for giving false information to avoid backup
same account is incorrect.
notices over at least a 210-day period. withholding. The civil penalty is $500. The crimi-
2. The incorrect TIN is still being used on the nal penalty, upon conviction, is a fine of up to
Taxpayer identification number. Your TIN account when the payer receives the sec- $1,000 or imprisonment of up to one year, or
is one of the following three numbers. ond notice. both.

Jane’s answer to the chart’s first question is

Who Does Not Have To YES; she expects to owe at least $1,000 for
2.
2009 after subtracting her withholding from her
Pay Estimated Tax expected tax ($11,640 − $10,500 = $1,140). Her
answer to the chart’s second question is also
If you receive salaries and wages, you can avoid YES; she expects her income tax withholding
having to pay estimated tax by asking your em- ($10,500) to be at least 90% of the tax to be
Estimated Tax ployer to take more tax out of your earnings. To
do this, file a new Form W-4 with your employer.
shown on her 2009 return ($11,640 × 90% =
$10,476). Jane does not need to pay estimated
for 2009 See chapter 1. tax.
Estimated tax not required. You do not have Example 2. The facts are the same as in
to pay estimated tax for 2009 if you meet all Example 1, except that Jane expects only
three of the following conditions. $8,500 tax to be withheld in 2009. Because that
Introduction • You had no tax liability for 2008. is less than $10,476, her answer to the chart’s
second question is NO.
Estimated tax is the method used to pay tax on • You were a U.S. citizen or resident alien Jane’s answer to the chart’s third question is
income that is not subject to withholding. This for the whole year. also NO; she does not expect her income tax
includes income from self-employment, interest, withholding ($8,500) to be at least 100% of the
• Your 2008 tax year covered a 12-month
dividends, alimony, rent, gains from the sale of period. tax shown on her 2008 return ($9,744). Jane
assets, prizes, and awards. You also may have must pay estimated tax for 2009.
to pay estimated tax if the amount of income tax You had no tax liability for 2008 if your total tax
being withheld from your salary, pension, or Example 3. The facts are the same as in
(defined on page 24 under Total tax for 2008 —
Example 2, except that the tax shown on Jane’s
other income is not enough. Line 14b) was zero or you did not have to file an
2008 return was $8,000. Because she expects
Estimated tax is used to pay both income tax income tax return.
to have more than $8,000 withheld in 2009
and self-employment tax, as well as other taxes ($8,500), her answer to the chart’s third question
and amounts reported on your tax return. If you is YES. Jane does not need to pay estimated tax
do not pay enough tax, either through withhold-
ing or estimated tax, or a combination of both,
Who Must Pay for 2009.
you may have to pay a penalty. If you do not pay

enough by the due date of each payment period
Estimated Tax Married Taxpayers
(see When To Pay Estimated Tax on page 24), If you owed additional tax for 2008, you may If you qualify to make joint estimated tax pay-
you may be charged a penalty even if you are have to pay estimated tax for 2009. ments, apply the rules discussed here to your
joint estimated income.
due a refund when you file your tax return. For
You and your spouse can qualify to make
information on when the penalty applies, see General Rule joint estimated tax payments even if you are not
chapter 4. living together.
You must pay estimated tax for 2009 if both of
It would be helpful for you to keep a However, you and your spouse cannot make
the following apply.
TIP copy of your 2008 tax return and an joint estimated tax payments if:
estimate of your 2009 income nearby 1. You expect to owe at least $1,000 in tax • You are legally separated under a decree
while reading this chapter. for 2009, after subtracting your withholding of divorce or separate maintenance,
and credits.
Topics • You and your spouse have different tax
2. You expect your withholding and credits to years, or
This chapter discusses: be less than the smaller of:
• Either spouse is a nonresident alien (un-
• Who must pay estimated tax, a. 90% of the tax to be shown on your less that spouse elected to be treated as a
2009 tax return, or resident alien). See Choosing Resident
• How to figure estimated tax (including il- Alien Status in Publication 519.
lustrated examples), b. 100% of the tax shown on your 2008
tax return. Your 2008 tax return must
• When to pay estimated tax, If you do not qualify to make joint estimated
cover all 12 months.
tax payments, apply these rules to your sepa-
• How to figure each payment, and rate estimated income.
Note. These percentages may be different if
• How to pay estimated tax. Making joint or separate estimated tax pay-
you are an eligible small business, farmer, fish-
ments will not affect your choice of filing a joint
erman, or higher income taxpayer. See Special
tax return or separate returns for 2009.
Rules beginning on page 20.
Useful Items You may find Figure 2-A on page 20 helpful 2008 separate returns and 2009 joint return.
You may want to see: in determining if you must pay estimated tax. If you plan to file a joint return with your spouse
If all your income will be subject to for 2009, but you filed separate returns for 2008,
Publication
TIP income tax withholding, you probably your 2008 tax is the total of the tax shown on
❏ 553 Highlights of 2008 Tax Changes do not need to pay estimated tax. your separate returns. You filed a separate re-
turn if you filed as single, head of household, or
Form (and Instructions) married filing separately.
Example 1. To figure whether she should
❏ 1040-ES Estimated Tax for Individuals pay estimated tax for 2009, Jane, who files as 2008 joint return and 2009 separate returns.
head of household, uses Figure 2-A and the If you plan to file a separate return for 2009, but
See chapter 5 for information about how to get following information. you filed a joint return for 2008, your 2008 tax is
this publication and form. your share of the tax on the joint return. You file
Expected adjusted gross income (AGI)
a separate return if you file as single, head of
for 2009 . . . . . . . . . . . . . . . . . . . . $82,800
AGI for 2008 . . . . . . . . . . . . . . . . . . $73,700 household, or married filing separately.
Worksheets. You may need to use several of To figure your share of the tax on a joint
Tax shown on 2008 return . . . . . . . . . $ 9,744
the blank worksheets included in this chapter. Tax expected to be shown on 2009 return, first figure the tax both you and your
See Table 2-2 on page 34 to locate what you return . . . . . . . . . . . . . . . . . . . . . $11,640 spouse would have paid had you filed separate
need. Tax expected to be withheld in 2009 . . . $10,500 returns for 2008 using the same filing status as
Chapter 2 Estimated Tax for 2009 Page 19

EPS File Name: 15008e12 Size: Width = 44.0 picas, Depth = 25.4 picas
for 2009. Then multiply the tax on the joint return • You certify that more than 50% of your • Gains from sales of draft, breeding, dairy,
by the following fraction. gross income in 2008 was income from a or sporting livestock.
small business.
The tax you would have paid For 2008, gross income from farming is the
had you filed a separate return • The average number of employees for the
2008 calendar year was less than 500. total of the following amounts.
The total tax you and your
spouse would have paid had • Your AGI for 2008 was less than $500,000 • Schedule F (Form 1040), Profit or Loss
you filed separate returns ($250,000 if you are married filing sepa- From Farming, line 11.
rate returns in 2009). • Form 4835, Farm Rental Income and Ex-
Example. Joe and Heather filed a joint re- penses, line 7.
turn for 2008 showing taxable income of
$48,500 and a tax of $6,476. Of the $48,500
Farmers and Fishermen • Your share of the gross farming income
taxable income, $40,100 was Joe’s and the rest If at least two-thirds of your gross income for from a partnership, S corporation, estate
was Heather’s. For 2009, they plan to file mar- 2008 or 2009 is from farming or fishing, substi- or trust, from: Schedule K-1 (Form 1065),
ried filing separately. Joe figures his share of the tute 662/3% for 90% in (2a) under General Rule Box 14, code B; Schedule K-1 (Form
tax on the 2008 joint return as follows: on the previous page. 1120S), Box 17, code T; or Schedule K-1
Tax on $40,100 based on separate return $6,375
(Form 1041), Box 14, code F.
Gross income. Your gross income is all in-
Tax on $8,400 based on separate return . . 863
come you receive in the form of money, goods, • Your gains from sales of draft, breeding,
Total . . . . . . . . . . . . . . . . . . . . . . . . $7,238
property, and services that is not exempt from dairy, or sporting livestock shown on Form
Joe’s percentage of total ($6,375 ÷ $7,238) 88% 4797, Sales of Business Property.
Joe’s share of tax on joint return
tax. To determine whether two-thirds of your
($6,476 × 88%) . . . . . . . . . . . . . . . . $5,699 gross income for 2008 was from farming or fish-
ing, use as your gross income the total of the Wages you receive as a farm employee and
income (not loss) amounts. wages you receive from a farm corporation are
Special Rules not gross income from farming.
Joint returns. On a joint return, you must add
There are special rules for eligible small busi- your spouse’s gross income to your gross in-
nesses, farmers, fishermen, and certain higher come to determine if at least two-thirds of your Gross income from fishing. This is income
income taxpayers. total gross income is from farming or fishing. from catching, taking, harvesting, cultivating, or
farming any kind of fish, shellfish (for example,
Gross income from farming. This is income clams and mussels), crustaceans (for example,
Eligible Small Businesses from cultivating the soil or raising agricultural lobsters, crabs, and shrimp), sponges, sea-
commodities. It includes the following amounts. weeds, or other aquatic forms of animal and
If you have an eligible small business, substitute
90% for 100% in (2b) under General Rule on the • Income from operating a stock, dairy, vegetable life.
previous page. poultry, bee, fruit, or truck farm. Gross income from fishing includes the fol-
You have an eligible small business if you • Income from a plantation, ranch, nursery, lowing amounts.
satisfy the following. range, orchard, or oyster bed. • Schedule C (Form 1040), Profit or Loss
• Crop shares for the use of your land. From Business, line 7.
Figure 2-A. Do You Have To Pay Estimated Tax?

Start Here
Will you owe $1,000 or Will your income tax withholding Will your income tax
more for 2009 after and credits be at least 90% withholding and credits be at No
subtracting income tax Yes No
withholding and credits
䊳 (662⁄3 % for farmers and 䊳 least 100%* of the tax shown
fishermen) of the tax shown on on your 2008 tax return?
from your total tax? (Do your 2009 tax return?
not subtract any estimated Note: Your 2008 return must
tax payments.) have covered a 12-month
period.
Yes
No Yes
䊲
You are NOT required to pay You MUST make estimated
䊳䊴 tax payment(s) by the
estimated tax.
required due date(s).
䊴
See When To Pay
Estimated Tax.
* 110% if less than two-thirds of your gross income for 2008 and 2009 is from farming or fishing and your 2008 adjusted gross income
was more than $150,000 ($75,000 if your filing status for 2009 is married filing a separate return); 90% if you certify that more than 50%
of your gross income in 2008 was income from your small business that had an average of fewer than 500 employees in 2008, and your
2008 AGI was less than $500,000 ($250,00 if married filing separate returns in 2009).
Page 20 Chapter 2 Estimated Tax for 2009

• Income for services as an officer or crew tax. Include the amount from line 11 of Work-
member of a vessel while the vessel is
engaged in fishing.
How To Figure sheet 2-2 in your expected adjustments to in-
come. If you file a joint return and both you and
• Your share of the gross fishing income Estimated Tax your spouse have net earnings from
self-employment, each of you must complete a
from a partnership, S corporation, estate
To figure your estimated tax, you must figure separate worksheet.
or trust, from: Schedule K-1 (Form 1065),
Box 14, code B; Schedule K-1 (Form your expected AGI, taxable income, taxes, de-
1120S), Box 17, code T; or Schedule K-1 ductions, and credits for the year.
(Form 1041), Box 14, code F. When figuring your 2009 estimated tax, it Expected Taxable Income—
may be helpful to use your income, deductions, Lines 2–5
• Certain interest and punitive damage and credits for 2008 as a starting point. Use your
awards received in connection with the Reduce your expected AGI for 2009 (line 1) by
2008 federal tax return as a guide. You can use
Exxon Valdez litigation. either your expected itemized deductions or
Form 1040-ES to figure your estimated tax.
your standard deduction and by your exemp-
• Income for services normally performed in Nonresident aliens use Form 1040-ES (NR) to
figure estimated tax. tions (lines 2 through 5).
connection with fishing.
Services normally performed in connection with You must make adjustments both for Itemized deductions — line 2. If you expect
fishing include: changes in your own situation and for recent to claim itemized deductions on your 2009 tax
changes in the tax law. For 2009, there are return, enter the estimated amount on line 2.
• Shore service as an officer or crew mem- several changes in the law. Some of these Itemized deductions are the deductions that
ber of a vessel engaged in fishing, and changes are discussed under What’s New for can be claimed on Schedule A of Form 1040.
• Services that are necessary for the imme- 2009 beginning on page 2. For information
about these and other changes in the law, get Phaseout of itemized deductions.
diate preservation of the catch, such as For 2009, your total itemized deduc-
cleaning, icing, and packing the catch. Publication 553 or visit the IRS website at www.
irs.gov. tions may be reduced if your AGI is
more than $166,800 ($83,400 if married filing
The instructions for Form 1040-ES include a
Higher Income Taxpayers separately). If you expect your AGI to be more
worksheet to help you figure your estimated tax.
than that amount, use Worksheet 2-4 on page
Keep the worksheet for your records.
If your AGI for 2008 was more than $150,000 39 to figure the amount to enter on line 2.
($75,000 if your filing status for 2009 is married
filing a separate return), substitute 110% for 2009 Estimated Tax Standard deduction — line 2. If you expect to
100% in (2b) under General Rule on page 19. Worksheet claim the standard deduction on your 2009 tax
For 2008, AGI is the amount shown on Form return, enter the amount on line 2. Use Work-
1040, line 37; Form 1040A, line 21; and Form Use the worksheet (Figure 2-B) on page 22 to sheet 2-3 on page 38 to figure your standard
1040EZ, line 4. help guide you through the information about deduction.
completing the 2009 Estimated Tax Worksheet.
No standard deduction. The standard de-
Note. This rule does not apply to farmers You also will find a blank worksheet on page 35.
duction for some individuals is zero. Your stan-
and fishermen. dard deduction will be zero if you:
Aliens Expected AGI—Line 1 • File a separate return and your spouse

itemizes deductions,
Your expected AGI for 2009 (line 1) is your
Resident and nonresident aliens also may have
expected total income minus your expected ad- • Are a dual-status alien, or
to pay estimated tax. Resident aliens should
follow the rules in this publication, unless noted justments to income. • File a return for a period of less than 12
otherwise. Nonresident aliens should get Form months because you change your ac-
Total income. Include in your total income all counting period.
1040-ES (NR), U.S. Estimated Tax for Nonresi-
the income you expect to receive during the
dent Alien Individuals.
year, even income that is subject to withholding.
You are an alien if you are not a citizen or Exemptions — line 4. After you have sub-
However, do not include income that is tax ex-
national of the United States. You are a resident tracted either your expected itemized deduc-
empt.
alien if you either have a green card or meet the tions or your standard deduction from your
substantial presence test. Total income includes all income and loss for
expected AGI, reduce the amount remaining by
See Publication 519 for more information 2009 that, if you had received it in 2008, would
$3,650 for each exemption you expect to take on
about Form 1040-ES (NR) and withholding have been included on your 2008 tax return in
your 2009 tax return. If another person (such as
(chapter 8) and the substantial presence test the total on line 22 of Form 1040, line 15 of Form
your parent) can claim an exemption for you on
(chapter 1). 1040A, or line 4 of Form 1040EZ.
his or her tax return, you cannot claim your own
Social security and railroad retire- personal exemption. This is true even if the other
Estates and Trusts ment benefits. If you expect to receive person will not claim your exemption or the ex-
social security or tier 1 railroad retire- emption will be reduced or eliminated under the
Estates and trusts also must pay estimated tax. ment benefits during 2009, use Worksheet 2-1 phaseout rule.
However, estates (and certain grantor trusts that on page 36 to figure the amount of expected
receive the residue of the decedent’s estate Reduction of personal exemption
taxable benefits you should include on line 1.
under the decedent’s will) are exempt from pay- amount. For 2009, your deduction for
ing estimated tax for the first two years after the personal exemptions is reduced if your
Adjustments to income. Be sure to subtract AGI is larger than the AGI shown below for your
decedent’s death. from your expected total income all of the adjust-
Estates and trusts must use Form 1041-ES, filing status.
ments you expect to take on your 2009 tax
Estimated Income Tax for Estates and Trusts, to return. If you are using your 2008 return as a
figure and pay estimated tax. Single . . . . . . . . . . . . . . . . . . . . . $166,800
guide and filed Form 1040, your adjustments for Married filing jointly or qualifying
2008 were on lines 23 – 35, plus any write-in widow(er) . . . . . . . . . . . . . . . . . . $250,200
adjustments on line 36. If you filed Form 1040A, Married filing separately . . . . . . . . . . $125,100
your 2008 adjustments were on lines 16 – 19. Head of household . . . . . . . . . . . . . $208,500
Self-employed. If you expect to have If you expect your AGI to be more than that
income from self-employment, use amount, use Worksheet 2-5 on page 39 to figure
Worksheet 2-2 on page 37 to figure the amount to enter on line 4.
your expected self-employment tax and your However, if in 2009 you housed individuals
deduction for one-half of your self-employment displaced by a Midwestern disaster, read the

Figure 2-B. Page 4 of the Instructions for 2009 Form 1040-ES

The 2009 Estimated Tax Worksheet is found on page 4 of the instructions for Form 1040-ES. When this worksheet refers you to
instructions (for example, “see instructions below”) or to specific page numbers, you can find the information on pages 1-7 of the
CAUTION
instructions for 2009 Form 1040-ES.
2009 Estimated Tax Worksheet Keep for Your Records

1 Adjusted gross income you expect in 2009 (see instructions below) 1
其
2 ● If you plan to itemize deductions, enter the estimated total of your itemized deductions.
Caution: If line 1 above is over $166,800 ($83,400 if married filing separately), your deduction may be
reduced. See Pub. 505 for details. 2
● If you do not plan to itemize deductions, enter your standard deduction from page 1 or Pub. 505,
Worksheet 2-3.
4 Exemptions. Multiply $3,650 by the number of personal exemptions. Caution: See Pub. 505 to figure the
amount to enter if line 1 above is over: $250,200 if married filing jointly or qualifying widow(er); $208,500 if head
of household; $166,800 if single; or $125,100 if married filing separately 4
6 Tax. Figure your tax on the amount on line 5 by using the 2009 Tax Rate Schedules on page 5. Caution: If
you will have qualified dividends or a net capital gain, or expect to claim the foreign earned income exclusion
or housing exclusion, see Pub. 505 to figure the tax 6
7 Alternative minimum tax from Form 6251 7
8 Add lines 6 and 7. Add to this amount any other taxes you expect to include in the total on Form 1040, line 44, or
Form 1040A, line 28 8
9 Credits (see instructions below). Do not include any income tax withholding on this line 9
10 Subtract line 9 from line 8. If zero or less, enter -0- 10
11 Self-employment tax (see instructions below). Estimate of 2009 net earnings from self-employment
$ ; if $106,800 or less, multiply the amount by 15.3%; if more than $106,800, multiply the
amount by 2.9%, add $13,243.20 to the result, and enter the total. Caution: If you also have wages subject to social
security tax or the 6.2% portion of tier 1 Railroad Retirement tax, see Pub. 505 to figure the amount to enter 11
12 Other taxes (see instructions below) 12
13a Add lines 10 through 12 13a
b Earned income credit, additional child tax credit, and credits from Forms 4136, 5405, 8801 (line 27), and 8885 13b
c Total 2009 estimated tax. Subtract line 13b from line 13a. If zero or less, enter -0- 䊳 13c
14a Multiply line 13c by 90% (66 2⁄3 % for farmers and fishermen) 14a
b Enter the tax shown on your 2008 tax return (110% of that amount if you are not
a farmer or fisherman and the adjusted gross income shown on that return is
more than $150,000 or, if married filing separately for 2009, more than $75,000) 14b
c Required annual payment to avoid a penalty. Enter the smaller of line 14a or 14b 䊳 14c
Caution: Generally, if you do not prepay (through income tax withholding and estimated tax payments) at least the
amount on line 14c, you may owe a penalty for not paying enough estimated tax. To avoid a penalty, make sure your
estimate on line 13c is as accurate as possible. Even if you pay the required annual payment, you may still owe tax
when you file your return. If you prefer, you can pay the amount shown on line 13c. For details, see Pub. 505.
15 Income tax withheld and estimated to be withheld during 2009 (including income tax withholding on pensions,
annuities, certain deferred income, etc.) 15
16a Subtract line 15 from line 14c 16a
Is the result zero or less?
Yes. Stop here. You are not required to make estimated tax payments.
No. Go to line 16b.
b Subtract line 15 from line 13c 16b
Is the result less than $1,000?
No. Go to line 17 to figure your required payment.
17 If the first payment you are required to make is due April 15, 2009, enter 1⁄4 of line 16a (minus any 2008
overpayment that you are applying to this installment) here, and on your estimated tax payment voucher(s) if
you are paying by check or money order. (Note: Household employers, see instructions below.) 17
following section and complete Worksheet 2-6 • The person displaced lived in your main • You did not claim an additional exemption
on page 40 before entering an amount on line 4. home for at least 60 consecutive days that amount in 2008 for the same individual.
ended in 2009.
Taxpayers housing individuals dis- • You did not claim the maximum exemption
placed by a Midwestern disaster. • You did not receive any rent or other amount of $2,000 in 2008.
You may be able to claim an additional amount from any source for providing the
Use Worksheet 2-6 on page 40 to figure the
exemption amount of $500 per person (up to housing.
additional exemption amount. For more informa-
$2,000) if you provided housing to a person who
was displaced from his or her main home be-
• The main home of the person displaced tion, see Publication 4492-B.
was in a Midwestern disaster area on the
cause of a Midwestern disaster and all of the
applicable disaster date for that county.
following apply.
• The person displaced was not your
spouse or dependent.

Expected Taxes and Credits— Tax on Lump-Sum Distributions (line 44, 64a, 66, 68b, 68c, 68d, and 69, if they were 2008
Lines 6–13c boxes a and b, of the 2008 Form 1040); refundable credits.
and To figure your expected fuel tax credit, do not
After you have figured your expected taxable include fuel tax for the first three quarters of the
income (line 5), follow the steps below to figure 4. Any recapture of education credits.
year that you expect to have refunded to you.
your expected taxes, credits, and total tax for The earned income credit is shown on the
2009. Most people will have entries for only a Step 3. Subtract your expected credits (line 9).
2008 Form 1040A, line 40a, and the additional
few of these steps. However, you should check If you are using your 2008 return as a guide and
child tax credit is shown on line 41.
every step to be sure you do not overlook any- filed Form 1040, your total credits for 2008 were
The result of steps 1 through 6 is your total
thing. shown on line 55. If you filed Form 1040A, your
estimated tax for 2009 (line 13c).
total credits for 2008 were on line 34.
Step 1. Figure your expected income tax (line If your credits on line 9 are more than your
6). Generally, you will use the 2009 Tax Rate taxes on line 8, enter “-0-” on line 10 and go to
Schedules, found on page 40 or in the instruc- Step 4.
Required Annual Payment—
tions to Form 1040-ES, to figure your expected Line 14c
Step 4. Add your expected self-employment
income tax. However, see below for situations On lines 14a through 14c, figure the total
tax (line 11). You already should have figured
where you must use a different method to com- amount you must pay for 2009, through with-
your self-employment tax (see Self-employed
pute your estimated tax. holding and estimated tax payments, to avoid
under Expected AGI — Line 1 on page 21).
Tax on child’s investment income. You paying a penalty.
Step 5. Add your expected other taxes (line
must use a special method to figure tax on the
12). General rule. The total amount you must pay
income of the following children who have more
Other taxes include: is the smaller of:
than $1,900 of investment income.
1. Additional tax on early distributions from: 1. 90% of your total expected tax for 2009, or
1. Children under age 18 at the end of 2009.
2. The following children if their earned in- a. An IRA or other qualified retirement 2. 100% of the total tax shown on your 2008
come is not more than half their support. plan, return. Your 2008 tax return must cover all
12 months.
b. A tax-sheltered annuity, or
a. Children age 18 at the end of 2009.
c. A modified endowment contract entered
b. Children who are full-time students over Special rules. There are special rules for cer-
into after June 20, 1988;
age 18 and under age 24 at the end of tain small businesses and higher income tax-
2009. payers and for farmers and fishermen.
2. Advance earned income credit payments;
Small businesses. If more than 50% of
See Publication 929, Tax Rules for Children 3. Household employment taxes (before sub-
your gross income from 2008 was income from a
and Dependents. Although the ages and dollar tracting advance EIC payments made to
small business and your AGI in 2008 was less
amounts in the publication will be different in your employee(s)) if:
than $500,000 ($250,000 if you are married fil-
the 2009 revision, this reference will give you
a. You will have federal income tax with- ing separate returns in 2009), substitute 90% for
basic information for figuring the tax.
held from wages, pensions, annuities, 100% in (2) above. Your business is a small
Tax on net capital gain. The regular in- gambling winnings, or other income, or business if it had an average of fewer than 500
come tax rates for individuals do not apply to a employees in 2008.
net capital gain. Instead, your net capital gain is b. You would be required to make esti-
mated tax payments even if you did not Higher income taxpayers. If your AGI for
taxed at a lower maximum rate.
include household employment taxes 2008 was more than $150,000 ($75,000 if your
The term “net capital gain” means the
when figuring your estimated tax; and filing status for 2009 is married filing separately),
amount by which your net long-term capital gain
substitute 110% for 100% in (2) above. This rule
for the year is more than your net short-term
4. Amounts written in on Form 1040 on the does not apply to farmers and fishermen.
capital loss.
line for “total tax” (line 61 on the 2008 For 2008, AGI is the amount shown on Form
Tax on qualified dividends. Generally, the Form 1040). But, do not include tax on 1040, line 37; Form 1040A, line 21; and Form
maximum tax rate for qualified dividends is 15% recapture of a federal mortgage subsidy, 1040EZ, line 4.
(0% for people whose other income is taxed at tax on golden parachute payments, Example. Jeremy Martin’s total tax on his
the 10% or 15% rate). look-back interest due under section 2008 return was $42,581, and his expected tax
Tax on capital gain and qualified 167(g) or 460(b) of the Internal Revenue for 2009 is $71,253. His 2008 AGI was
dividends. If the amount on line 1 in- Code, excise tax on insider stock compen- $180,000. Because Jeremy had more than
cludes a net capital gain or qualified sation from an expatriated corporation, or $150,000 of AGI in 2008, he figures his required
dividends, use Worksheet 2-7 on page 41 to uncollected employee social security, annual payment as follows. He determines that
figure your tax. Medicare, or RRTA tax on tips or 90% of his expected tax for 2009 is $64,128 (.90
group-term life insurance. × $71,253). Next, he determines that 110% of
Tax if excluding foreign earned in- the tax shown on his 2008 return is $46,839
5. Repayment of the first-time homebuyer
come or excluding or deducting for- (1.10 x $42,581). Finally, he determines that his
credit if the home will cease to be your
eign housing. If you expect to claim required annual payment is $46,839, the smaller
main home in 2009. See Form 5405 for
the foreign earned income exclusion or the of the two.
exceptions.
housing exclusion or deduction on Form 2555 or
Form 2555-EZ, use Worksheet 2-8 on page 42 If you filed a 2008 Form 1040A, your only Farmers and fishermen. If at least
to figure your estimated tax. other tax was any advance earned income credit two-thirds of your gross income for 2008 or 2009
payments on line 36. is from farming or fishing, your required annual
Step 2. Total your expected taxes (line 8). payment is the smaller of:
Include on line 8 the sum of: Step 6. Subtract your refundable credits (line
13b). These include your expected earned in- 1. 662/3% (.6667) of your total tax for 2009, or
1. Your tax on line 6; come credit, additional child tax credit, Form
2. 100% of the total tax shown on your 2008
4136 fuel tax credit, Form 5405 first-time
2. Your expected alternative minimum tax return. (Your 2008 tax return must cover all
homebuyer credit, Form 8801 (line 30) refund-
(AMT) from Form 6251 (or included on 12 months.)
able credit for prior year minimum tax, Form
Form 1040A, line 28) on line 7;
8885 health coverage tax credit, Making Work For definitions of “gross income from farm-
3. Your expected additional taxes from Form Pay credit (see Worksheet 2-9 on page 43), and ing” and “gross income from fishing,” see Farm-
8814, Parents’ Election To Report Child’s Form 8863 refundable Hope education credit. ers and Fishermen, under Special Rules
Interest and Dividends, and Form 4972, These are shown on the 2008 Form 1040, lines beginning on page 20.

Total tax for 2008 — line 14b. Your 2008 total estimated tax at that time, or you can pay it in
tax on Form 1040 is the amount on line 61
reduced by the following.
When To Pay installments. If you choose to pay in install-
ments, make your first payment by the due date
1. The amounts on lines 58, 64a, 66, and 69.

Estimated Tax for the first payment period. Make your remain-
ing installment payments by the due dates for
2. The following amounts from Form 5329 in- For estimated tax purposes, the year is divided the later periods.
cluded on line 59. into four payment periods. Each period has a No income subject to estimated tax during
specific payment due date. If you do not pay first period. If you do not have income subject
a. Any tax on excess contributions to enough tax by the due date of each of the pay- to estimated tax until a later payment period, you
IRAs, Archer MSAs, Coverdell educa- ment periods, you may be charged a penalty must make your first payment by the due date
tion savings accounts, and health sav- even if you are due a refund when you file your for that period. You can pay your entire esti-
ings accounts. income tax return. The payment periods and mated tax by the due date for that period or you
b. Any tax on excess accumulations in due dates for estimated tax payments are can pay it in installments by the due date for that
qualified retirement plans. shown next. period and the due dates for the remaining peri-
ods. Table 2-1 below shows the dates for mak-
3. The following amounts included on line 61. For the period: Due date: ing installment payments.
Jan. 11
– March 31 . . . . . . . April 15
a. Recapture of a federal mortgage sub- April 1 – May 31 . . . . . . . . . June 15 Table 2-1. Due Dates for
sidy. June 1 – August 31 . . . . . . . September 15 Estimated Tax
b. Tax on golden parachute payments. Sept. 1 – Dec. 31 . . . . . . . . January 15 Installment Payments
next year2
c. Look-back interest due under section If you first have
167(g) or 460(b) of the Internal Reve- income on which Make a Make later
1 If your tax year does not begin on January 1, you must pay payment installments
nue Code. see Fiscal year taxpayers below. estimated tax: by:* by:*
d. Excise tax on insider stock compensa-
2 See January payment below.
tion from an expatriated corporation. Before April 1 April 15 June 15
Saturday, Sunday, holiday rule. If the due Sept. 15
e. Uncollected employee social security, date for an estimated tax payment falls on a Jan. 15 next
Medicare, or railroad retirement tax on Saturday, Sunday, or legal holiday, the payment year
tips or group-term life insurance. will be on time if you make it on the next busi- April 1 – May 31 June 15 Sept. 15
ness day. Jan. 15 next
4. Any credit from Form 4136, Form 8801, or year
Form 8885 included on line 68. January payment. If you file your 2009 Form
1040 or Form 1040A by February 1, 2010, and June 1 – Aug. 31 Sept. 15 Jan. 15 next
On the 2008 Form 1040A, it is the amount on pay the rest of the tax you owe, you do not need year
line 37 reduced by the amount on lines 40a and to make the payment due on January 15, 2010. After Aug. 31 Jan. 15 (None)
41. On the 2008 Form 1040EZ, it is the amount next year
on line 11 reduced by the amount on line 8a. Example. Janet Adams does not pay any
estimated tax for 2009. She files her 2009 in- *See January payment and Saturday, Sunday,
come tax return and pays the balance due holiday rule on this page.
Total Estimated Tax Payments shown on her return on January 26, 2010.
Needed—Line 16a Janet’s estimated tax for the fourth payment How much to pay to avoid penalty. To deter-
period is considered to have been paid on time. mine how much you should pay by each pay-
Use lines 15 and 16a to figure the total esti- However, she may owe a penalty for not making ment due date, see How To Figure Each
mated tax you must pay for 2009. Subtract your the first three estimated tax payments. Any pen- Payment on page 25.
expected withholding from your required annual alty for not making those payments will be fig-
payment (line 14c). You usually must pay this ured up to January 26, 2010. Farmers and Fishermen
difference in four equal installments. See When
To Pay Estimated Tax on this page and How To Fiscal year taxpayers. If your tax year does If at least two-thirds of your gross income for
Figure Each Payment on page 25. not start on January 1, your payment due dates 2008 or 2009 is from farming or fishing, you
You do not have to pay estimated tax if: are: have only one payment due date for your 2009
• Line 14c minus line 15 is zero or less, or estimated tax, January 15, 2010. The due dates
1. The 15th day of the 4th month of your
for the first three payment periods, discussed
• Line 13c minus line 15 is less than $1,000. fiscal year,
under When To Pay Estimated Tax on this page,
2. The 15th day of the 6th month of your do not apply to you.
Withholding — line 15. Your expected with- fiscal year, If you file your 2009 Form 1040 by March 1,
holding for 2009 (line 15) includes the income 2010, and pay all the tax you owe, you do not
3. The 15th day of the 9th month of your
tax you expect to be withheld from all sources need to make an estimated tax payment.
fiscal year, and
(wages, pensions and annuities, etc.). It also Fiscal year farmers and fishermen. If you
includes excess social security and railroad re- 4. The 15th day of the 1st month after the
are a farmer or fisherman, but your tax year
tirement tax you expect to be withheld from your end of your fiscal year.
does not start on January 1, you can either:
wages. You do not have to make the last payment
For this purpose, you will have excess social listed above if you file your income tax return by
• Pay all your estimated tax by the 15th day
security or tier 1 railroad retirement tax withhold- after the end of your tax year, or
the last day of the first month after the end of
ing for 2009 only if your wages from two or more your fiscal year and pay all the tax you owe with • File your return and pay all the tax you
employers are more than $106,800. See Excess your return. owe by the 1st day of the 3rd month after
Social Security or Railroad Retirement Tax the end of your tax year.
Withholding in chapter 3. When To Start
You do not have to make estimated tax pay-
ments until you have income on which you will
owe the tax. If you have income subject to esti-
mated 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

Amended estimated tax. If you 2009 Annualized Estimated Tax Worksheet

How To Figure refigure your estimated tax during the
year, or if your first estimated tax pay-
(Worksheet 2-10) beginning on page 44.
You first must complete the 2009 Esti-
Each Payment ment is due after April 15, 2009, figure your
required payment for each remaining payment ! mated Tax Worksheet through line
CAUTION 16b. (See page 35 for a blank work-
After you have figured your total estimated tax, period using Worksheet 2-16 on page 48.
sheet.)
figure how much you must pay by the due date Use the result you figure on line 28 of the
of each payment period. You should pay enough Example. Early in 2009, Mira Roberts
2009 Annualized Estimated Tax Worksheet to
by each due date to avoid a penalty for that figures that her estimated tax due is $1,800. She
make your estimated tax payments and com-
period. If you do not pay enough during any makes estimated tax payments on April 15 and
plete your payment vouchers.
payment period, you may be charged a penalty June 15 of $450 each ($1,800 ÷ 4).
See Example 2, beginning on page 30, to
even if you are due a refund when you file your On July 10, she sells investment property at see how the worksheet is completed.
tax return. The penalty is discussed in chapter 4. a gain. Her refigured estimated tax is $4,100.
Her required estimated tax payment for the third Note. If you use the annualized income in-
payment period is $2,175, as shown in her fil-
Regular Installment Method led-in Worksheet 2-16 on this page.
stallment method to figure your estimated tax
payments, you must file Form 2210 with your
If your first estimated tax payment is due April If Mira’s estimated tax does not change 2009 tax return. See Annualized Income Install-
15, 2009, you can figure your required payment again, her required estimated tax payment for ment Method (Schedule AI) in chapter 4 for
for each period by dividing your annual esti- the fourth payment period will be $1,025. more information.
mated tax due (line 16a of the 2009 Estimated
Underpayment penalty. If your estimated
Tax Worksheet) by 4. Enter this amount on line
tax payment for a previous period is less than Instructions for the 2009
17. However, use this method only if your in-
one-fourth of your amended estimated tax, you Annualized Estimated Tax
come is basically the same throughout the year. may be charged a penalty for underpayment of Worksheet (Worksheet 2-10)
estimated tax for that period when you file your
Household employers. Reduce your re- tax return. See chapter 4 for more information.
quired payment for each period by the amount of Use Figure 2-C beginning on page 27
advance EIC payments you paid during the pe- TIP to help you follow these instructions.
riod.
Annualized Income Another worksheet is available for your
Installment Method use on pages 44 and 45.
Change in estimated tax. After you make an The purpose of this worksheet is to deter-
If you do not receive your income evenly
estimated tax payment, changes in your income, mine your estimated tax liability as your income
throughout the year (for example, your income
adjustments, deductions, credits, or exemptions accumulates throughout the year, rather than
from a repair shop you operate is much larger in
may make it necessary for you to refigure your dividing your entire year’s estimated tax liability
the summer than it is during the rest of the year),
estimated tax. Pay the unpaid balance of your by four as if your income was earned equally
your required estimated tax payment for one or
amended estimated tax by the next payment throughout the year. The top of the worksheet
more periods may be less than the amount fig-
due date after the change or in installments by (see page 27) shows the dates for each pay-
ured using the regular installment method.
that date and the due dates for the remaining ment period. The periods build; that is, each
The annualized income installment method period includes all previous periods. After the
payment periods. annualizes your tax at the end of each period end of each payment period, complete the cor-
If you do not receive your income evenly based on a reasonable estimate of your income, responding worksheet column to figure the pay-
throughout the year, your required estimated tax deductions, and other items relating to events ment due for that period.
payments may not be the same for each period. that occurred from the beginning of the tax year
See Annualized Income Installment Method on through the end of the period. To see whether Line 1. Enter your AGI for the period. This is
this page. you can pay less for any period, complete the your gross income, including your share of part-
nership or S corporation income or loss, for the
Worksheet 2-16. Amended Estimated Tax Worksheet—Illustrated period, minus your adjustments to income for
that period. See Expected AGI — Line 1 on page
21.
1. Amended total estimated tax due . . . . . . . . . . . . . . . . . . . . . . . . . . 1. $4,100
Self-employment income. If you had
2. Multiply line 1 by: self-employment income, first complete Section
50% (.50) if next payment is due June 15, 2009 B of this worksheet. Use the amounts on line 39
75% (.75) if next payment is due September 15, when figuring the AGI to enter in each column of
2009 Section A, line 1.
100% (1.00) if next payment is due January 15,
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. 3,075 Line 4. Be sure to consider all deduction limits
figured on Schedule A (Form 1040), such as
3. Estimated tax payments for all previous periods . . 3. 900
reducing your medical expenses by 7.5% of
4. Next required payment: Subtract line 3 from line 2 your AGI, or reducing certain miscellaneous de-
and enter the result (but not less than zero) here ductions by 2% of your AGI. Figure your deduc-
and on your payment voucher for your next required tion limits using your expected AGI in the
payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. $2,175 corresponding column of line 1 (2009 Annual-
Note. If the payment on line 4 is due January 15, ized Estimated Tax Worksheet (Worksheet
2010, stop here. Otherwise, go to line 5. 2-10)).
5. Add lines 3 and 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. 3,075 Line 6. Multiply line 4 by line 5 and enter the
result on line 6, unless line 3 is more than
6. Subtract line 5 from line 1 and enter the result (but not less than zero) 6. 1,025
$166,800 ($83,400 if married filing separately).
7. Each following required payment: If the payment on line 4 is due In that case, use Worksheet 2-11 on page 45 to
June 15, 2009, enter one-half of the amount on line 6 here and on the figure the amount to enter on line 6. Complete
payment vouchers for your payments due September 15, 2009, and Worksheet 2-11 for each period, as necessary.
January 15, 2010. If the amount on line 4 is due September 15, 2009,
enter the full amount on line 6 here and on the payment voucher for Line 7. If you will not itemize your deductions,
your payment due January 15, 2010 . . . . . . . . . . . . . . . . . . . . . . . . 7. $1,025 use Worksheet 2-3 (see page 38) to figure your
standard deduction.

Line 10. Multiply $3,650 by your total ex- a. An IRA or other qualified retirement Also include estimated federal income tax
pected exemptions and enter the result on line plan, withholding. One-fourth of your estimated with-
10, unless line 3 is more than the amount shown holding is considered withheld on the due date
b. A tax-sheltered annuity, or
below for your filing status. of each payment period. To figure the amount to
Single . . . . . . . . . . . ......... $166,800 c. A modified endowment contract entered include on line 27 for each period, multiply your
Married filing jointly or into after June 20, 1988; total expected withholding for 2009 by:
qualifying widow(er) . ......... $250,200 • 25% (.25) for the first period,
Married filing separately ......... $125,100 2. Advance earned income credit payments;
Head of household . . . ......... $208,500
3. Household employment taxes (before sub-
• 50% (.50) for the second period,
In that case, use Worksheet 2-12 on page 46 tracting advance EIC payments made to • 75% (.75) for the third period, and
to figure the amount to enter on line 10. How- your employee(s)) if:
ever, if in 2009 you provide housing to individu-
• 100% (1.00) for the fourth period.
als displaced by a Midwestern disaster, see a. You will have federal income tax with-
held from wages, pensions, annuities, However, you may choose to include your
Taxpayers housing individuals displaced by a
gambling winnings, or other income, or withholding according to the actual dates on
Midwestern disaster on page 22. Then complete
which the amounts will be withheld. For each
Worksheet 2-6 on page 40 before entering an b. You would be required to make esti- period, include withholding made from the be-
amount on line 10 of your 2009 Annualized Esti- mated tax payments even if you did not ginning of the period up to and including the
mated Tax Worksheet (Worksheet 2-10). include household employment taxes payment due date. You can make this choice
Line 12. Generally, you will use the 2009 Tax when figuring your estimated tax; and separately for the taxes withheld from your
Rate Schedules on page 40 or in the instructions wages and all other withholding. For an explana-
to Form 1040-ES to figure the tax on your annu- 4. Amounts written in on Form 1040 on the tion of what to include in withholding, see Total
alized income. However, see below for situa- line for “total tax” (line 61 on the 2008 Estimated Tax Payments Needed — Line 16a on
tions where you must use a different method to Form 1040). But do not include tax on re- page 24.
compute your estimated tax. capture of a federal mortgage subsidy, tax
on golden parachute payments, look-back Nonresident aliens. If you will file Form
Tax on child’s investment income. You interest due under section 167(g) or 460(b) 1040NR and you do not receive wages as an
must use a special method to figure tax on the of the Internal Revenue Code, excise tax employee subject to U.S. income tax withhold-
income of the following children who have more on insider stock compensation from an ex- ing, the instructions for the worksheet are modi-
than $1,900 of investment income. patriated corporation, or uncollected em- fied as follows.
1. Children under age 18 at the end of 2009. ployee social security, Medicare, or RRTA
tax on tips or group-term life insurance. 1. Skip column (a).
2. The following children if their earned in- 2. On line 1, enter your income for the period
come is not more than half their support. 5. Repayment of the first-time homebuyer
credit if the home will cease to be your that is effectively connected with a U.S.
a. Children age 18 at the end of 2009. main home in 2009. See Form 5405 for trade or business.
exceptions. 3. On line 17, increase your entry by the
b. Children who are full-time students over
age 18 and under age 24 at the end of 6. Tax from Form 4972. amount determined by multiplying your in-
2009. come for the period that is not effectively
7. Tax from Form 8814. connected with a U.S. trade or business by
See Publication 929. 8. Tax from recapture of an education credit. the following.
Tax on net capital gain. The regular in- 9. Use Form 6251 to see if you also owe the a. 72% for column (b).
come tax rates for individuals do not apply to a alternative minimum tax (AMT). Figure al-
b. 45% for column (c).
net capital gain. Instead, your net capital gain is ternative minimum taxable income based
taxed at a lower maximum rate. on your income and deductions during the c. 30% for column (d).
The term “net capital gain” means the period shown in the column headings. Mul-
However, if you can use a treaty rate lower
amount by which your net long-term capital gain tiply this amount by the annualization
than 30%, use the percentages determined
for the year is more than your net short-term amounts shown for each column on line 2
by multiplying your treaty rate by 2.4, 1.5, and
capital loss. of the 2009 Annualized Estimated Tax
1, respectively.
Worksheet (Worksheet 2-10). Include any
Tax on qualified dividends. Generally, the AMT owed in the amount on line 14 of this 4. On line 22, enter one-half of the amount
maximum tax rate for qualified dividends is 15% worksheet. from line 16c of the Form 1040-ES (NR)
(0% for people whose other income is taxed at 2009 Estimated Tax Worksheet in column
the 10% or 15% rate). (b), and one-fourth in columns (c) and (d).
Line 16. Include all the credits (other than
Tax on capital gain and qualified withholding credits) you can claim because of 5. On lines 20 and 23, skip column (b).
dividends. If the amount on line 1 in- events that occurred during the period. If you are
cludes a net capital gain or qualified using your 2008 return as a guide and filed Form 6. On line 27, if you do not use the actual
dividends, use Worksheet 2-13 on page 47 to 1040, your 2008 credits included the total credits withholding method, include one-half of
figure the amount to enter on line 12. on line 55, and the credits shown on lines 64a, your total expected withholding in column
66, 68 (boxes b, c, and d), and 69. If you filed (b) and one-fourth in columns (c) and (d).
Tax if excluding foreign earned in- Form 1040A, your 2008 credits included the
come or excluding or deducting for- See Publication 519 for more information.
credits on lines 34, 40a, and 41.
eign housing. If you expect to claim Increase your credits for the Making Work
the foreign earned income exclusion or the Pay credit. Use Worksheet 2-15 on page 49 to
Estimated Tax
housing exclusion or deduction on Form 2555 or figure this credit. Payments Not Required
Form 2555-EZ, use Worksheet 2-14 on page 48
to figure the amount to enter on line 12. Line 25. If line 24 is smaller than line 21 and You do not have to pay estimated tax if your
you are not certain of the estimate of your 2009 withholding in each payment period is at least as
Line 13. Enter your self-employment tax for much as:
tax, you can avoid a penalty by entering the
the period from Section B, line 37.
amount from line 21 on line 25. • One-fourth of your required annual pay-
Line 14. Add your expected other taxes. ment, or
Other taxes include: Line 27. For each period, include estimated
tax payments made and any excess social se- • Your required annualized income install-
1. Additional tax on early distributions from: curity and railroad retirement tax. ment for that period.

The type and EPS

rule above prints 15008e25
Filename: on all proofs including departmental reproduction
Size - Width =proofs. MUST
44 picas be removed
Depth = pagebefore printing.
Figure 2-C. Worksheet for Annualized Income Installment Method

Worksheet 2-10. 2009 Annualized Estimated Tax Worksheet
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)–(d): (a) (b) (c) (d)
2/28/2009, 4/30/2009, 7/31/2009, 11/30/2009. 1/1/09–3/31/09 1/1/09–5/31/09 1/1/09–8/31/09 1/1/09–12/31/09
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 and Worksheet 2-11 if line 3 is
more than $83,400) 6
7 Standard deduction from Worksheet 2-3 7
8 Enter the larger of line 6 or line 7 8
10 In each column, multiply $3,650 by your total expected number of
exemptions (see instructions and Worksheet 2-12 if line 3 is more than
$125,100 or you expect to house individuals displaced by a
Midwestern disaster). (Estates and trusts, see instructions) 10
12 Figure your tax on the amount on line 11 (see instructions) 12
13 Self-employment tax from line 37 of Section B 13
14 Enter other taxes for each payment period (see instructions) 14
15 Total tax. Add lines 12, 13, and 14 15
16 Enter credits for each period (see instructions for type of credits
allowed). Do not include any income tax withholding on this line 16
18 Applicable percentage 18 22.5% 45% 67.5% 90%
19 Multiply line 17 by line 18 19
Complete lines 20-25 of one column before going to line 20 of the next column.
20 Enter the total of the amounts in all previous columns of line 25 20
21 Annualized income installment. Subtract line 20 from line 19. If zero
or less, enter -0- 21
22 Enter 25% (.25) of line 14c of the Form 1040-ES Estimated Tax
Worksheet in each column 22
23 Subtract line 25 of the previous column from line 24 of that
column 23
24 Add lines 22 and 23 24
25 Enter the smaller of line 21 or line 24 (see instructions) 25
26 Total required payments for the period. Add lines 20 and 25 26
27 Estimated tax payments made (line 28 of all previous columns) plus
tax withholding through the due date for the period 27
28 Estimated tax payment required by the next due date. Subtract line
27 from line 26 and enter the result (but not less than zero) here and
on your payment voucher 28

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

Section B (For Figuring Your Annualized Estimated Self-Employment Tax)—Complete each column after end of period shown.
(a) (b) (c) (d)
(For 1040 filers only) 1/1/09–3/31/09 1/1/09–5/31/09 1/1/09–8/31/09 1/1/09–12/31/09
29 Net earnings from self-employment for the period 29

30 Prorated social security tax limit 30 $26,700 $44,500 $71,200 $106,800
31 Enter actual wages for the period subject to social security tax or the
6.2% portion of the 7.65% railroad retirement (tier 1) tax 31
33 Annualization amounts 33 0.496 0.2976 0.186 0.124
34 Multiply line 33 by the smaller of line 29 or line 32 34
36 Multiply line 29 by line 35 36
37 Add lines 34 and 36. Enter the result here and on line 13 of Section A 37
38 Annualization amounts 38 8 4.8 3 2
39 Deduction for one-half of self-employment tax. Divide line 37 by line 38.
Enter the result here. Use this result to figure your AGI on line 1 39
You also do not have to pay estimated tax if you your tax return for the following year. You also Do not use the address shown in the
will pay enough through withholding to keep the
amount you will owe with your return under
cannot use that overpayment in any other way. !
CAUTION
Form 1040 or Form 1040A instruc-
tions.
$1,000. Example. When Kathleen finished filling out
If you file a joint return and are making joint
her 2008 tax return, she saw that she had over-
estimated tax payments, enter the names and
paid her taxes by $750. Kathleen knew she
social security numbers on the payment voucher
would owe additional tax in 2009. She credited
How To Pay $600 of the overpayment to her 2009 estimated
tax and had the remaining $150 refunded to her.
in the same order as they will appear on the joint
return.
Estimated Tax In September, she amended her 2008 return
Change of address. You must notify the IRS
by filing Form 1040X, Amended U.S. Individual
if you are making estimated tax payments and
There are five ways to pay estimated tax. Income Tax Return. It turned out that she owed
you changed your address during the year.
• Credit an overpayment on your 2008 re- $250 more in tax than she had thought. This
Send a clear and concise written statement to
turn to your 2009 estimated tax. reduced her 2008 overpayment from $750 to
the Internal Revenue Service Center where you
$500. Because the $750 had already been ap-
• Send in your payment (check or money filed your last return and provide all of the follow-
plied to her 2009 estimated tax or refunded to
order) with a payment voucher from Form ing information.
her, the IRS billed her for the additional $250
1040-ES. she owed, plus penalties and interest. Kathleen • Your full name (and your spouse’s full
• Pay electronically using the Electronic could not use any of the $600 she had credited name).
Federal Tax Payment System (EFTPS). to her 2009 estimated tax to pay this bill. • Your signature (and spouse’s signature).
• Pay by electronic funds withdrawal if you Pay by Check or Money • Your old address (and spouse’s old ad-
are filing Form 1040 or Form 1040A elec- dress if different).
tronically. Order Using the Estimated
Tax Payment Voucher • Your new address.
• Pay by credit card using a pay-by-phone
system or the Internet. • Your social security number (and spouse’s
Each payment of estimated tax by check or social security number).
money order must be accompanied by a pay-
You can use Form 8822, Change of Address, for
Credit an Overpayment ment voucher from Form 1040-ES. If you made
estimated tax payments last year, you should this purpose.
If you show an overpayment of tax after complet- receive a copy of the 2009 Form 1040-ES in the
ing your Form 1040 or Form 1040A for 2008, mail unless you used a paid tax preparer. It will Pay by Electronic Federal
you can apply part or all of it to your estimated have payment vouchers preprinted with your Tax Payment System
name, address, and social security number. Us-
tax for 2009. On line 74 of Form 1040, or line 46
ing the preprinted vouchers will speed process-
(EFTPS)
of Form 1040A, enter the amount you want
credited to your estimated tax rather than re- ing, reduce the chance of error, and help save EFTPS is a free tax payment system where you
funded. Take the amount you have credited into processing costs. input your tax payment information electroni-
account when figuring your estimated tax pay- If you did not pay estimated tax last year, you cally, online or by phone. Through EFTPS, you
ments. If you timely file your 2008 return, treat will have to get a copy of Form 1040-ES from the can schedule one-time or recurring payments
the credit as a payment made on April 15, 2009. IRS (see chapter 5). Follow the instructions in for withdrawal from your checking or savings
If you are a beneficiary of an estate or trust, the package to make sure you use the vouchers account up to 365 days in advance. You also
and the trustee elects to credit 2009 trust pay- correctly. can modify or cancel payments up to 2 business
ments of estimated tax to you, you can treat the Use the window envelopes that came with days before the scheduled withdrawal date. To
amount credited as paid by you on January 15, your Form 1040-ES package. If you use your use EFTPS, you must enroll. Enroll online at
2010. own envelopes, make sure you mail your pay- www.eftps.gov or call 1-800-555-4477 (for busi-
If you choose to have an overpayment of tax ment vouchers to the address shown in the ness accounts) or 1-800-316-6541 (for individ-
credited to your estimated tax, you cannot have Form 1040-ES instructions for the place where ual accounts) to receive an enrollment form and
any of that amount refunded to you until you file you live. instructions by mail. TTY/TDD help is available

by calling 1-800-733-4829. Call 1-800-244-4829 Making Work Pay credit . . . . . . . . . . 800

for Spanish. Illustrated Examples Withholding . . . . . . . . . . . . . . . . . . 3,372
The Joneses plan to file a joint return. They
Pay by Electronic Funds The following examples show how to figure esti- use the 2009 Estimated Tax Worksheet in-
Withdrawal (EFW) mated tax payments under the regular install- cluded in Form 1040-ES to figure their estimated
ment method and under the annualized income tax payments. See their filled-in worksheet (Fig-
If you electronically file your 2008 tax return, you installment method. ure 2-D) on page 31.
can use EFW to make up to four (4) 2009 esti-
mated tax payments. This is a free option. The Example 1—Regular Expected AGI. Anne can claim an income tax
deduction for one-half of her self-employment
payments can be withdrawn from either a check-
ing or savings account. At the same time you file
Installment Method tax as a business expense. So before the
your return, you can schedule estimated tax Joneses figure their expected AGI, they figure
Early in 2009, Anne and Larry Jones figure their
payments for any or all of the following dates: Anne’s expected self-employment tax. See their
estimated tax payments for the year. They ex-
April 15, 2009, June 15, 2009, September 15, filled-in Worksheet 2-2 on this page.
pect to receive the following income during
2009, and January 15, 2010. On line 11 of their 2009 Estimated Tax Work-
2009.
Check with your tax return preparer or tax sheet, the Joneses enter $37,032 on the dotted
preparation software for details. Your scheduled Larry’s salary . . . . . . . . . . . . . . . . . $39,900 line and $5,666 in the blank. They subtract
payments will be acknowledged when you file State tax refund (they itemized one-half of that amount, $2,833, and their
your tax return. deductions in 2008) . . . . . . . . . . . 600 $1,000 adjustment for IRA contributions from
Payments scheduled through EFW can be Anne’s net profit from self-employment 40,100 their $89,589 total income to find their expected
cancelled up to 8 p.m. Eastern time, 2 business Net rental income . . . . . . . . . . . . . . 2,784 AGI, $85,756. They enter that amount on line 1
Interest income . . . . . . . . . . . . . . . 6,205 of the worksheet.
days before the scheduled payment date, by
contacting the U.S. Treasury Financial Agent at Total . . . . . . . . . . . . . . . . . . . . . . $89,589
Expected taxable income. The Joneses fig-
1-888-353-4537.
They also use the following expected items ure their standard deduction, $11,400, in Work-
to figure their estimated tax. sheet 2-3. They cannot increase their standard
Pay by Credit Card deduction for the other allowed expenses. This
Adjustment to income for IRA is smaller than their expected itemized deduc-
You can use your American Express Card,
contributions . . . . . . . . . . . . . . . . $ 1,000 tions, so they enter $11,825 on line 2 of the
Discover Card, MasterCard card, or Visa Itemized deductions . . . . . . . . . . . . 11,825 worksheet. They subtract the amount on line 2
card to make estimated tax payments. Call Deduction for exemptions ($3,650 × 2) 7,300 from the amount on line 1 and enter the result,
toll-free or visit the website of either service 2008 total tax . . . . . . . . . . . . . . . . 14,347 $73,931, on line 3. They enter their deduction for
provider listed below and follow the instructions.
exemptions, $7,300, on line 4. After subtracting
A convenience fee will be charged by the service
provider based on the amount you are paying.
Fees may vary between providers. You will be
Worksheet 2-2. 2009 Estimated Tax Worksheet—Lines 1 and 11
told what the fee is during the transaction and Expected Self-Employment Tax and Deduction
you will have the option to either continue or —Illustrated (Anne Jones)
cancel the transaction. You also can find out
what the fee will be by calling the provider’s 1. a. Enter your expected income and profits subject
toll-free automated customer service number or to self-employment tax* . . . . . . . . . . . . . . . . . 1a. $40,100
visiting the provider’s website shown below.
b.If you will have farm income and also receive
Official Payments Corporation social security retirement or disability benefits,
1-800-2PAY-TAXSM (1-800-272-9829) enter your expected Conservation Reserve
1-877-754-4413 (Customer Service) Program payments that will be included on
www.officialpayments.com Schedule F (Form 1040) or listed on Schedule
K-1 (Form 1065) . . . . . . . . . . . . . . . . . . . . . . 1b.
2. Subtract line 1b from line 1a . . . . . . . . . . . . . . 2. 40,100
Link2Gov Corporation 3. Multiply line 2 by 92.35% (.9235) . . . . . . . . . . . 3. 37,032
1-888-PAY-1040SM (1-888-729-1040)
1-888-658-5465 (Customer Service) 4. Multiply line 3 by 2.9% (.029) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. 1,074
www.PAY1040.com 5. Social security tax maximum income . . . . . . . . 5. $106,800
6. Enter your expected wages (if subject to social
security tax or the 6.2% 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 12.4% (.124) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9. 4,592
10. Add line 4 and line 9. Enter the result here and on line 11 of your 2009
Estimated Tax Worksheet (or line 13 of the Annualized ES Worksheet
(Worksheet 2-10)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10. $ 5,666
11. Multiply line 10 by 50% (.50). This is your
expected deduction for one-half of your
self-employment tax. Subtract this amount when
figuring your expected AGI on line 1 of your
2009 Estimated Tax Worksheet (or Annualized
Estimated Tax Worksheet (Worksheet 2-10)) . . 11. $ 2,833
*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.

this amount, their expected taxable income on First Period would be entered on line 16, so they enter $800
line 5 is $66,631. on line 16. After subtracting their Making Work
On April 1, 2009, the Joneses complete the first Pay credit from their total tax, the Joneses’ 2009
Expected taxes and credits. The Joneses column of the worksheet for the period January estimated tax for the period is $5,777 ($6,577 –
use the 2009 Tax Rate Schedule Y-1 on page 40 1 through March 31. They had the following $800). They enter $5,777 on line 17.
to figure their expected income tax, and enter income for the period.
Required estimated tax payment. The
$9,160 on line 6 of the worksheet. They do not Joneses’ annualized income installment on lines
expect to owe any other taxes that would be Larry’s salary . . . . . . . . . . . . . . . . . $ 9,975
State tax refund . . . . . . . . . . . . . . . 600 19 and 21 of Section A is $1,300 ($5,777 ×
entered on lines 7 or 12. They use Worksheet Anne’s net profit from self-employment 3,000 22.5%). On lines 22 and 24 they enter $3,156,
2-9 on page 43 to figure their Making Work Pay Net rental income . . . . . . . . . . . . . . -0- one-fourth of their $12,623 required annual pay-
credit of $800. They do not have any other Interest income . . . . . . . . . . . . . . . 990 ment (line 14c of their 2009 Estimated Tax
credits that would be entered on lines 9 or 13b, Total . . . . . . . . . . . . . . . . . . . . . . $14,565 Worksheet). Because $1,300 is smaller, they
so they leave line 9 blank and enter $800 on enter that amount on lines 25 and 26.
line13b. They also take into account the following Larry’s total expected withholding for the
The Joneses’ total estimated tax on line 13c, items for the period. year is $3,372. The Joneses can treat
after adding Anne’s self-employment tax from one-fourth of that amount, $843, as paid on April
Adjustment to income for IRA
line 11, is $14,026 ($14,826 – $800). 15, or they can use Larry’s actual withholding for
contributions . . . . . . . . . . . . . . . . $ 150
Itemized deductions . . . . . . . . . . . . 1,375
the period. The Joneses enter $843 on line 27.
Estimated tax. The Joneses multiply their to- Making Work Pay credit . . . . . . . . . . 800 On line 28, the Joneses’ required estimated
tal estimated tax by 90% and enter $12,623 on Withholding . . . . . . . . . . . . . . . . . . 843 tax payment for the period under the annualized
line 14a of the worksheet. They enter their 2008 income installment method is $457 ($1,300 −
tax on line 14b. Their required annual payment $843). They will send in an estimated tax pay-
on line 14c is the smaller amount, $12,623. ment of $457 for the first period.
Annualized AGI. Before the Joneses figure
They enter Larry’s expected withholding, their AGI for the period, they first figure Anne’s
$3,372, on line 15 and subtract it from their self-employment tax in Section B, and then her Second, Third, and Fourth Periods
required annual payment. Their estimated tax adjustment to income for self-employment tax.
on line 16a is $9,251. On line 29 of Section B, they enter $2,771, After the end of each remaining payment period,
They are required to pay estimated tax be- which is Anne’s net profit from self-employment the Joneses complete the column of the work-
cause their estimated withholding (line 15) is: sheet for that period (from the beginning of the
for the period ($3,000 x .9235). The prorated
year through the end of that payment period) in
• Less than their “required annual payment social security tax limit is preprinted on line 30.
the same way they did for the first period. They
to avoid a penalty” (line 14c), and She has no social security wages, so they enter had the following income for each period.
zero on line 31, and $26,700 on line 32. Anne’s
• Not within $1,000 of their “total 2009 esti- annualized social security tax on line 34 is Second Third Fourth
mated tax” (line 13c). Period Period Period
$1,374 ($2,771 × .496). Her annualized Medi-
care tax on line 36 is $321 ($2,771 × .116). Her Jan. 1- Jan. 1- Jan. 1-
Required estimated tax payment. The total annualized self-employment tax on line 37 May 31 Aug. 31 Dec. 31
Joneses must pay their first estimated tax pay- is $1,695. They enter that amount on line 13 of Larry’s salary . . . . . . $16,625 $26,600 $39,900
ment by April 15, 2009. They enter one-fourth of Section A. State tax refund . . . . . 600 600 600
their estimated tax (line 16a), $2,313, on line 17 Anne’s net profit from
of the worksheet and on their Form 1040-ES The Joneses figure their adjustment to in- self-employment . . . 6,000 16,000 40,100
come for Anne’s self-employment tax on lines Net rental income . . . 696 2,784 2,784
payment voucher that shows “Due April 15, Interest income . . . . . 1,575 3,250 6,205
2009.” They mail the voucher with their payment 38 and 39 (Section B). That amount is $212 Total . . . . . . . . . . . $25,496 $49,234 $89,589
to the address shown for their area in the Form ($1,695 ÷ 8). They subtract that amount and
1040-ES instructions and record the payment on their $150 IRA contributions from their $14,565 They also take into account the following
the Record of Estimated Tax Payments in the total income and enter their AGI for the period, items for each period.
instructions. $14,203, on line 1 of Section A. They multiply
Second Third Fourth
If their estimated tax does not change during that amount by 4 and enter their annualized AGI,
Period Period Period
the year, the Joneses also will pay $2,313 esti- $56,812, on line 3.
Jan. 1- Jan. 1- Jan. 1-
mated tax by June 15 and September 15, 2009, May 31 Aug. 31 Dec. 31
and January 15, 2010. Annualized taxable income. The Joneses Adjustment to income
for IRA contributions $ 250 $ 400 $ 1,000
figure their annualized itemized deductions
Example 2—Annualized ($1,375 × 4) on lines 4 through 6 of Section A.
Itemized deductions . .
Making Work Pay credit
3,120
800
7,250 11,825
800 800
Income Installment Method Because the result is smaller than their standard Withholding . . . . . . . 843 843 843
deduction, they enter their $11,400 standard For the second period, as for the first, the
The facts are the same as in Example 1 —
deduction on line 8. After subtracting that annualized income installment method allows
Regular Installment Method, except that the
amount and their $7,300 deduction for exemp- the Joneses to pay less than their required pay-
Joneses do not expect to receive their income
tions, the Joneses’ annualized taxable income ment under the regular installment method of
evenly throughout the year. Anne expects to
receive the largest portion of her on line 11 is $38,112. figuring estimated tax payments. They make up
self-employment income during the last few the difference in the third and fourth periods
months of the year, and the Joneses’ rental Annualized taxes and credits. The Joneses when their income is higher.
income is from a vacation home rented only in Because the Joneses are using the annual-
use the 2009 Tax Rate Schedule Y-1 on page 40
the summer months. ized income installment method, they must file
to figure their annualized income tax, $4,882,
Form 2210 with their tax return for 2009.
After completing their 2009 Estimated Tax which they enter on line 12 of Section A.
Worksheet, the Joneses decide to use the annu- They have no other taxes for the period that
alized income installment method to see if they would be entered on line 14, so they leave that
can pay less than $2,313 estimated tax for one line blank and enter $6,577 ($4,882 + $1,695)
or more payment periods. They complete the
on line 15.
2009 Annualized Estimated Tax Worksheet
(Worksheet 2-10) in this chapter. See their fil- They use Worksheet 2-15 on page 49 to
led-in worksheet (Figure 2-E) on pages 32 and figure their Making Work Pay credit of $800.
33. They have no other credits for the period that

Figure 2-D. Regular Installment Method—Illustrated Example 1

(Anne and Larry Jones)
1 Adjusted gross income you expect in 2009 (see instructions below) 1 85,756
其
reduced. See Pub. 505 for details. 2 11,825
Worksheet 2-3.
3 Subtract line 2 from line 1 3 73,931
of household; $166,800 if single; or $125,100 if married filing separately 4 7,300
5 Subtract line 4 from line 3 5 66,631
or housing exclusion, see Pub. 505 to figure the tax 6 9,160
Form 1040A, line 28 8 9,160
10 Subtract line 9 from line 8. If zero or less, enter -0- 10 9,160
$ 37,032 ; if $106,800 or less, multiply the amount by 15.3%; if more than $106,800, multiply the
security tax or the 6.2% portion of tier 1 Railroad Retirement tax, see Pub. 505 to figure the amount to enter 11 5,666
13a Add lines 10 through 12 13a 14,826
b Earned income credit, additional child tax credit, and credits from Forms 4136, 5405, 8801 (line 27), and 8885 13b 800
c Total 2009 estimated tax. Subtract line 13b from line 13a. If zero or less, enter -0- 䊳 13c 14,026
14a Multiply line 13c by 90% (66 2⁄3 % for farmers and fishermen) 14a 12,623
more than $150,000 or, if married filing separately for 2009, more than $75,000) 14b 14,347
c Required annual payment to avoid a penalty. Enter the smaller of line 14a or 14b 䊳 14c 12,623
annuities, certain deferred income, etc.) 15 3,372
16a Subtract line 15 from line 14c 16a 9,251
X No. Go to line 16b.
b Subtract line 15 from line 13c 16b 10,654
X No. Go to line 17 to figure your required payment.
you are paying by check or money order. (Note: Household employers, see instructions below.) 17 2,313

EPS Filename: 15008e26 Size - Width = 44 picas Depth = page
Figure 2-E. Annualized Income Installment Method—Illustrated Example 2

Note. For instructions, see Annualized Income Installment Method in chapter 2.
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)–(d): (a) (b) (c) (d)
1/1/09–3/31/09 1/1/09–5/31/09 1/1/09–8/31/09 1/1/09–12/31/09
2/28/2009, 4/30/2009, 7/31/2009, 11/30/2009
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 14,203 24,822 47,704 85,756
3 Annualized income. Multiply line 1 by line 2 3 56,812 59,573 71,556 85,756
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 1,375 3,120 7,250 11,825
6 Multiply line 4 by line 5 (see instructions and Worksheet 2-11 if line 3 is
more than $83,400) 6 5,500 7,488 10,875 11,825
7 Standard deduction from Worksheet 2-3 7 11,400 11,400 11,400 11,400
8 Enter the larger of line 6 or line 7 8 11,400 11,400 11,400 11,825
9 Subtract line 8 from line 3 9 45,412 48,173 60,156 73,931
10 In each column, multiply $3,650 by your total expected number of
exemptions (see instructions and Worksheet 2-12 if line 3 is more than
$125,100 or you expect to house individuals displaced by a
Midwestern disaster). (Estates and trusts, see instructions) 10 7,300 7,300 7,300 7,300
11 Subtract line 10 from line 9. If zero or less, enter -0- 11 38,112 40,873 52,856 66,631
12 Figure your tax on the amount on line 11 (see instructions) 12 4,882 5,296 7,093 9,160
13 Self-employment tax from line 37 of Section B 13 1,695 2,035 3,391 5,666
15 Total tax. Add lines 12, 13, and 14 15 6,577 7,331 10,484 14,826
16 Enter credits for each period (see instructions for type of credits
allowed). Do not include any income tax withholding on this line 16 800 800 800 800
19 Multiply line 17 by line 18 19 1,300 2,939 6,537 12,623
Complete lines 20-25 of one column before going to line 20 of the next column.
20 Enter the total of the amounts in all previous columns of line 25 20 1,480 1,300 2,939 6,537
21 Annualized income installment. Subtract line 20 from line 19. If zero
or less, enter -0- 21 1,300 1,639 3,598 6,086
22 Enter 25% (.25) of line 14c of the Form 1040-ES Estimated Tax
Worksheet in each column 22 3,156 3,156 3,156 3,156
column 23 1,480 1,856 3,373 2,931
24 Add lines 22 and 23 24 3,156 5,012 6,529 6,087
25 Enter the smaller of line 21 or line 24 (see instructions) 25 1,300 1,639 3,598 6,086
26 Total required payments for the period. Add lines 20 and 25 26 1,300 2,939 6,537 12,623
27 Estimated tax payments made (line 28 of all previous columns) plus
tax withholding through the due date for the period 27 843 2,143 3,782 7,380
28 Estimated tax payment required by the next due date. Subtract line
27 from line 26 and enter the result (but not less than zero) here and
on your payment voucher 28 457 796 2,755 5,243

Figure 2-E. Annualized Income Installment Method—Illustrated Example 2 (Continued)

Section B (For Figuring Your Annualized Estimated Self-Employment Tax)—Complete each column after end of period shown.
(a) (b) (c) (d)
(Form 1040 filers only) 1/1/09–3/31/09 1/1/09–5/31/09 1/1/09–8/31/09 1/1/09–12/31/09
29 Net earnings from self-employment for the period 29 2,771 5,541 14,776 37,032
31 Enter actual wages for the period subject to social security tax or the
6.2% portion of the 7.65% railroad retirement (tier 1) tax 31 0 0 0 0
34 Multiply line 33 by the smaller of line 29 or line 32 34 1,374 1,649 2,748 4,592
36 Multiply line 29 by line 35 36 321 386 643 1,074
37 Add lines 34 and 36. Enter the result here and on line 13 of Section A 37 1,695 2,035 3,391 5,666
38 Annualization amounts 38 8 4.8 3 2
39 Deduction for one-half of self-employment tax. Divide line 37 by line 38.
Enter the result here. Use this result to figure your AGI on line 1 39 212 424 1,130 2,833

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 2009 Estimated Tax Worksheet (ES Worksheet) 22, 35
to estimate your taxable social security and railroad retirement benefits — line 1 of ES Worksheet (or
Annualized ES Worksheet (Worksheet 2-10)) Worksheet 2-1 36
to estimate your self-employment (SE) tax and your deduction for one-half of your SE tax — lines 1 and
11 of ES Worksheet (lines 1 and 13 of Annualized ES Worksheet (Worksheeet 2-10)) Worksheet 2-2 37
to estimate your standard deduction — line 2 of ES Worksheet (line 7 of Annualized ES Worksheet
(Worksheet 2-10)) Worksheet 2-3 38
to reduce your itemized deductions because your estimated AGI is more than $166,800 ($83,400 if
married filing separately) — line 2 of ES Worksheet Worksheet 2-4 39
to reduce your exemption amount because your estimated AGI is more than $125,100 — line 4 of ES
Worksheet Worksheet 2-5 39
to estimate your additional exemption amount if you house individuals displaced by a Midwestern
disaster — line 4 of ES Worksheet (line 10 of Annualized ES Worksheet (Worksheet 2-10)) Worksheet 2-6 40
to estimate your income tax if line 1 of your ES Worksheet includes a net capital gain or qualified
dividends — line 6 of ES Worksheet Worksheet 2-7 41
to estimate your income tax if you expect to claim a foreign earned income exclusion or foreign housing
exclusion or deduction on Form 2555 or Form 2555-EZ — line 6 of ES Worksheet Worksheet 2-8 42
to estimate your Making Work Pay credit — line 13b of ES Worksheet Worksheet 2-9 43
the 2009 Annualized Estimated Tax Worksheet (Annualized ES Worksheet) Worksheet 2-10 44 – 45
to reduce your itemized deductions because your estimated annualized AGI is more than $166,800
($83,400 if married filing separately) — line 6 of Annualized ES Worksheet Worksheet 2-11 45
to reduce your exemption amount because your estimated annualized AGI is more than $125,100 —
line 10 of Annualized ES Worksheet Worksheet 2-12 46
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 2-13 47
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 2-14 48
to estimate your Making Work Pay credit — line 16 of Annualized ES Worksheet Worksheet 2-15 49
to refigure (amend) your estimated tax during the year Worksheet 2-16 48
2009 Tax Rate Schedules 40

Page 4 of the Instructions for 2009 Form 1040-ES

The 2009 Estimated Tax Worksheet is found on page 4 of the instructions for Form 1040-ES. When this worksheet refers you to
instructions (for example, “see instructions below”) or to specific page numbers, you can find the information on pages 1-7 of the
CAUTION
instructions for 2009 Form 1040-ES.

1 Adjusted gross income you expect in 2009 (see instructions below) 1
其
reduced. See Pub. 505 for details. 2
Worksheet 2-3.
of household; $166,800 if single; or $125,100 if married filing separately 4
or housing exclusion, see Pub. 505 to figure the tax 6
Form 1040A, line 28 8
$ ; if $106,800 or less, multiply the amount by 15.3%; if more than $106,800, multiply the
security tax or the 6.2% portion of tier 1 Railroad Retirement tax, see Pub. 505 to figure the amount to enter 11
13a Add lines 10 through 12 13a
b Earned income credit, additional child tax credit, and credits from Forms 4136, 5405, 8801 (line 27), and 8885 13b
c Total 2009 estimated tax. Subtract line 13b from line 13a. If zero or less, enter -0- 䊳 13c
14a Multiply line 13c by 90% (66 2⁄3 % for farmers and fishermen) 14a
more than $150,000 or, if married filing separately for 2009, more than $75,000) 14b
c Required annual payment to avoid a penalty. Enter the smaller of line 14a or 14b 䊳 14c
annuities, certain deferred income, etc.) 15
16a Subtract line 15 from line 14c 16a
No. Go to line 16b.
b Subtract line 15 from line 13c 16b
No. Go to line 17 to figure your required payment.
you are paying by check or money order. (Note: Household employers, see instructions below.) 17

Worksheet 2-1. 2009 Estimated Tax Worksheet—Line 1

Estimated Taxable Social Security and Railroad Retirement Benefits
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 the total of any exclusions or adjustments for:
• Qualified U.S. savings bond interest
• Adoption benefits
• Foreign earned income or housing
• Income of bona fide residents of American Samoa 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 2009 Estimated Tax Worksheet (or Annualized ES
Worksheet (Worksheet 2-10)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 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 2009 Estimated Tax Worksheet (or Annualized ES
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. Expected taxable social security and railroad retirement benefits. Enter the smaller of line 17 or line
18. Include this amount in the total on line 1 of your 2009 Estimated Tax Worksheet (or Annualized ES

Worksheet 2-2. 2009 Estimated Tax Worksheet—Lines 1 and 11

Estimated Self-Employment Tax and Deduction
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) . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
4. Multiply line 3 by 2.9% (.029) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5. Social security tax maximum income . . . . . . . . . . . . . . . . . . . . . . . 5. $106,800
6. Enter your expected wages (if subject to social security tax or the
6.2% portion of tier 1 railroad retirement tax) . . . . . . . . . . . . . . . . . . 6.
7. Subtract line 6 from line 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
Note. If line 7 is zero or less, enter -0- on line 9 and skip to line 10.
8. Enter the smaller of line 3 or line 7 . . . . . . . . . . . . . . . . . . . . . . . . 8.
9. Multiply line 8 by 12.4% (.124) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.
10. Add line 4 and line 9. Enter the result here and on line 11 of your 2009 Estimated Tax Worksheet (or
line 13 of the Annualized ES Worksheet (Worksheet 2-10)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.
11. Multiply line 10 by 50% (.50). This is your expected deduction for
one-half of your self-employment tax. Subtract this amount when
figuring your expected AGI on line 1 of your 2009 Estimated Tax
Worksheet (or Annualized ES Worksheet (Worksheet 2-10)) . . . . . . . 11.
*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.


Standard Deduction Worksheet
1. Enter the amount shown below for your filing status.
• Single or married filing separately — $5,700
• Married filing jointly or Qualifying widow(er) — $11,400
• Head of household — $8,350 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
2. Can you (or your spouse if filing jointly) be claimed as a dependent?
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, 1945, or blind?
No. Go to line 6.
Yes. Check if:
a. You were Born before January 2, 1945 Blind
b. Your spouse was Born before January 2, 1945 Blind
c. Total boxes checked in 5a and 5b
© Multiply $1,100 ($1,400 if single or head of household) by the number in the box on line 5c . . . . . . . 5.
Before you continue:

If you will have deductions for net disaster losses, real estate taxes, or taxes on the purchase of a qualified motor
vehicle, complete lines 6 – 10k as appropriate. If not, skip to line 11.
6. Enter any net disaster loss you expect to claim on Form 4684, line 18a . . . . . . . . . . . . ................ 6.
7. Enter the state and local real estate taxes you expect to pay in 2009 that would be
deductible on Schedule A, line 6, if you were itemizing your deductions. Do not include
foreign real estate taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
8. Enter $500 ($1,000 if married filing jointly) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.
9. Enter the smaller of line 7 or line 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ................ 9.
10. a. Enter the total of the state or local sales or excise taxes you expect to pay in 2009 for
the purchase of a qualified motor vehicle** . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10a.
b. Enter the purchase price of the qualified motor vehicle . . . . . . . . 10b.
c. Is the amount in line 10b more than $49,500?
No. Skip this line and enter the amount from line10a on line 10d.
Yes. Divide $49,500 by the amount on line 10b. Enter the result as a decimal
(rounded to at least three places) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10c. .
d. Multiply line 10a by line 10c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10d.
e. Enter the amount from line 1 of your 2009 Estimated Tax
Worksheet (or Worksheet 2-10) . . . . . . . . . . . . . . . . . . . . . . . . 10e.
f. Enter the total of any expected:
• Exclusion of income from Puerto Rico, and
• Amounts from Form 2555, lines 45 and 50; Form 2555-EZ,
line 18; and Form 4563, line 15 . . . . . . . . . . . . . . . . . . . . . 10f.
g. Add lines 10e and 10f . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10g.
h. Is the amount on line 10g more than $125,000 ($250,000 if
married filing jointly)?
No. Skip lines 10h and 10i, enter -0- on line 10j, and go to
line 10k.
Yes. Subtract $125,000 ($250,000 if married filing jointly)
from line 10g . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10h.
i. Divide line 10h by $10,000. Enter the result as a decimal (rounded
to at least three places). If the result is 1.000 or more, enter 1.000 . . . . . . . . . . . . . . . . 10i. .
j. Multiply line 10d by line 10i . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10j.
k. Sales and excise taxes on qualified motor vehicle purchases. Subtract line 10j
from line 10d. Enter the result here . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10k.
11. Standard deduction. Add lines 4, 5, 6, 9, and 10k. Enter the result here and on line 2 of your 2009 Estimated
Tax Worksheet (or line 7 of your 2009 Annualized Estimated Tax Worksheet (Worksheet 2-10)) . . . . . . . . . . . 11.
* 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 it by one-half your self-employment tax.
** Qualified motor vehicle includes certain new cars or light trucks, motorcycles, or motor homes that you purchase. For details, see Publication
553.


Phaseout of Itemized Deductions
1. Enter the estimated total of your itemized deductions (after applying any limits, such as the
7.5%-of-AGI limit on medical expenses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
2. Enter the amount included in line 1 for medical and dental expenses, investment interest, casualty or
theft losses, and gambling losses (after applying the same limits used in line 1) . . . . . . . . . . . . . . . . 2.
3. Subtract line 2 from line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
Note. If line 3 is zero or less, your deduction is not limited. Stop here and enter line 1 of this
worksheet on line 2 of your 2009 Estimated Tax Worksheet.
4. Multiply line 3 by 80% (.80) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5. Enter the amount from line 1 of the 2009 Estimated Tax Worksheet 5.
6. Enter $166,800 ($83,400 if married filing separately) ........... 6.
7. Subtract line 6 from line 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
Note. If line 7 is zero or less, your deduction is not limited. Stop here
and enter line 1 of this worksheet on line 2 of your 2009 Estimated
Tax Worksheet.
8. Multiply line 7 by 3% (.03). Enter the result as a decimal . . . . . . . . . 8. .
9. Enter the smaller of line 4 or line 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.
10. Divide line 9 by 1.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.
12. Total itemized deductions. Subtract line 11 from line 1. Enter the result here and on line 2 of your
2009 Estimated Tax Worksheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.

Reduction of Exemption Amount
1. Multiply $3,650 by the number of exemptions you plan to claim ........................... 1.

2. Enter the amount from line 1 of your 2009 Estimated Tax Worksheet . . 2.
3. Enter the amount shown below for your filing status.
Single — $166,800
Married filing jointly or qualifying widow(er) — $250,200
Married filing separately — $125,100
Head of household — $208,500 . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
4. Subtract line 3 from line 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5. Is line 4 more than $122,500 ($61,250 if married filing separately)?
Yes. Multiply $2,433 by the number of exemptions you plan to claim
and enter the result here and on line 4 of your 2009 Estimated Tax
Worksheet. Do not complete the rest of this worksheet.
No. Divide line 4 by $2,500 ($1,250 if married filing separately). If
the result is not a whole number, increase it to the next higher whole
number (for example, increase 0.0004 to 1) . . . . . . . . . . . . . . . . . 5.
6. Multiply line 5 by 2% (.02). Enter the result as a decimal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6. .
7. Multiply line 1 by line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
8. Divide line 7 by 3.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.
9. Deduction for exemptions. Subtract line 8 from line 1. Enter the result here and on line 4 of your 2009
Estimated Tax Worksheet. Caution. If you expect to house individuals displaced by a Midwestern
disaster, enter the result on line 5 of Worksheet 2-6 and not on your 2009 Estimated Tax Worksheet . . 9.


Additional Exemption Amount for Taxpayers Housing Midwestern Displaced Individuals
1. Maximum additional exemption amount. Enter $2,000 ($1,000 if married filing separately) . . . . . . . . . 1.
2. Did you file Form 8914 in 2008?
Yes. Enter the additional exemption amount claimed in 2008
from Form 8914, line 2.
No. Enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
3. Subtract line 2 from line 1. This is the maximum additional exemption amount you can claim in 2009 . . 3.
4. Multiply $500 by the total number of displaced individuals that you housed in 2009. Do not enter more
than the amount shown on line 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5. Enter the previously computed exemption amount (see Exemptions — line 4 on page 21; Worksheet
2-5, line 9; or Worksheet 2-12, line 9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.
6. Additional deduction for exemptions. Add lines 4 and 5. Enter the result here and on line 4 of your
2009 Estimated Tax Worksheet (line 10 of your 2009 Annualized Estimated Tax Worksheet (Worksheet
2-10)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.
2009 Tax Rate Schedules

Caution. Do not use these Tax Rate Schedules to figure your 2008 taxes. Use them only to figure your 2009 estimated taxes.
Schedule X —Use if your 2009 filing status is Single Schedule Z—Use if your 2009 filing status is
Head of household
If line 5 is: The tax is: of the If line 5 is: The tax is: of the
But not amount But not amount
Over — over — over — Over — over — over —
$0 $8,350 10% $0 $0 $11,950 10% $0

8,350 33,950 $835.00 + 15% 8,350 11,950 45,500 $1,195.00 + 15% 11,950
33,950 82,250 4,675.00 + 25% 33,950 45,500 117,450 6,227.50 + 25% 45,500
82,250 171,550 16,750.00 + 28% 82,250 117,450 190,200 24,215.00 + 28% 117,450
171,550 372,950 41,754.00 + 33% 171,550 190,200 372,950 44,585.00 + 33% 190,200
372,950 ------ 108,216.00 + 35% 372,950 372,950 ------ 104,892.50 + 35% 372,950
Schedule Y-1—Use if your 2009 filing status is Schedule Y-2—Use if your 2009 filing status is
Married filing jointly or Qualifying widow(er) Married filing separately
If line 5 is: The tax is: of the If line 5 is: The tax is: of the
But not amount But not amount
Over — over — over — Over — over — over —
$0 $16,700 10% $0 $0 $8,350 10% $0

16,700 67,900 $1,670.00 + 15% 16,700 8,350 33,950 $835.00 + 15% 8,350
67,900 137,050 9,350.00 + 25% 67,900 33,950 68,525 4,675.00 + 25% 33,950
137,050 208,850 26,637.50 + 28% 137,050 68,525 104,425 13,318.75 + 28% 68,525
208,850 372,950 46,741.50 + 33% 208,850 104,425 186,475 23,370.75 + 33% 104,425
372,950 ------ 100,894.50 + 35% 372,950 186,475 ------ 50,447.25 + 35% 186,475


Qualified Dividends and Capital Gain Tax Worksheet
1. Enter the amount from the appropriate worksheet.

• Line 5 of your 2009 Estimated Tax Worksheet
• Line 3 of Worksheet 2-8 (use if you will exclude or deduct foreign earned income or
housing) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
2. Enter your qualified dividends expected for 20091 2.
3. Enter the net capital gain expected for 20091 . . . . 3.
4. Add lines 2 and 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5. Enter your 28% rate gain or loss expected for 20092 5.
6. Enter the unrecaptured section 1250 gain expected
for 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 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 $67,900 ($33,950 if
single or married filing separately, or $45,500 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 – 28 and go to line 29.
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 – 25 and go to line 26.
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.
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 2009 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 2009 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 2009 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.
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.


Foreign Earned Income Tax Worksheet
Before you begin: If line 5 of your 2009 Estimated Tax Worksheet is zero, do not complete this worksheet.
1. Enter the amount from line 5 of your 2009 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 2009 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 2009 Tax Rate Schedules or Worksheet 2-7,* as appropriate . . . . . 4.
5. Tax on the amount on line 2. Use the 2009 Tax Rate Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.
6. Subtract line 5 from line 4. Enter the result here and on line 6 of your 2009 Estimated Tax Worksheet. If zero
or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.
*If using Worksheet 2-7 (Qualified Dividends and Capital Gain Tax Worksheet), enter the amount from line 3 above
on line 1 of Worksheet 2-7. Complete Worksheet 2-7 through line 9. Next, determine if you have a capital gain excess.
Figuring capital gain excess. To find out if you have a capital gain excess, subtract line 5 of your 2009 Estimated Tax
Worksheet 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. 2009 Estimated Tax Worksheet—Line 13b

Making Work Pay Credit Worksheet
1. Enter the earned income* you (and your spouse, if married filing jointly) expect in 2009 . . . . . . . . . . . . . . . . . 1.
2. Multiply line 1 by 6.2% (.062) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
3. Enter $400 ($800 if married filing jointly) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
4. Enter the smaller of line 2 or line 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5. Enter the amount from line 1 of your 2009 Estimated Tax Worksheet . . . . . . . . . . . . 5.
6. Enter the total of any:
• Amount of income from Puerto Rico you (and your spouse, if married filing
jointly) expect to exclude;
• Amount on Worksheet 2-8, line 2; and
• Amount of income from American Samoa you (and your spouse, if married filing
jointly) expect to exclude . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.
7. Add line 5 and line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
8. Enter $75,000 ($150,000 if married filing jointly) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.
9. Is the amount on line 7 more than the amount on line 8?
No. Skip line 10. Enter the amount from line 4 on line 11 below.
Yes. Subtract line 8 from line 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.
10. Multiply line 9 by 2% (.02) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.
11. Subtract line 10 from line 4. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.
12. Did you (or your spouse, if married filing jointly) receive social security benefits,
supplemental security income, railroad retirement benefits, or veterans disability
compensation or pension benefits in November or December 2008 or January 2009?
No. Enter -0-.
Yes. Enter $250 ($500 if married filing jointly) . . . . . . . . . . . . . . . . . . . . . . 12.
13. Do you (or your spouse, if married filing jointly) expect to receive a pension or annuity
in 2009 for services you performed as an employee of the U.S. government or any
U.S. state or local government? Do not include any pension or annuity that will be
reported on Form W-2.
No. Enter -0-.
Yes. If you checked “No” on line 12, enter $250 ($500 if married filing jointly
and the answer on line 13 is “Yes” for both spouses). If you checked
“Yes” on line 12, enter -0- (exception: enter $250 if married filing jointly
and the spouse who received the pension or annuity did not receive any
of the payments described on line 12) . . . . . . . . . . . . . . . . . . . . . . . . 13.
14. Add lines 12 and 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.
15. Subtract line 14 from line 11. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.
16. Making Work Pay credit (including special credit for government retirees). Add lines 13 and 15. Enter the
result here and include in the total on line 13b of your 2009 Estimated Tax Worksheet . . . . . . . . . . . . . . . . . . 16.
*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 and any nontaxable combat pay that you will include in your
earned income for this purpose. If you will be self-employed, subtract the amount from Worksheet 2-2, line 11, to figure your earned income.


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) – (d): (a) (b) (c) (d)
2/28/2009, 4/30/2009, 7/31/2009, 11/30/2009. 1/1/09 – 1/1/09 – 1/1/09 – 1/1/09 –
3/31/09 5/31/09 8/31/09 12/31/09
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
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 and Worksheet 2-11 if line 3 is more
than $83,400) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 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 $3,650 by your total expected number of exemptions

(see instructions and Worksheet 2-12 if line 3 is more than $125,100 or you
expect to house individuals displaced by a Midwestern disaster). (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 Self-employment tax from line 37 of Section B . . . . . . . . . . . . . . . . . . . . . . 13
14 Enter other taxes for each payment period (see instructions) . . . . . . . . . . . . . 14
15 Total tax. Add lines 12, 13, and 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
16 Enter credits for each period (see instructions for type of credits allowed). Do
not include any income tax withholding on this line . . . . . . . . . . . . . . . . . . . 16
17 Subtract line 16 from line 15. If zero or less, enter -0- . . . . . . . . . . . . . . . . . 17
18 Applicable percentage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 22.5% 45% 67.5% 90%
19 Multiply line 17 by line 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Complete lines 20 – 25 of one column before going to line 20 of the next

column.
20 Enter the total of the amounts in all previous columns of line 25 20
21 Annualized income installment. Subtract line 20 from line 19. If zero or less,
enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
22 Enter 25% (.25) of line 14c of the Form 1040-ES Estimated Tax Worksheet in
each column . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
23 Subtract line 25 of the previous column from line 24 of that column . . . . . . . . . 23
24 Add lines 22 and 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
25 Enter the smaller of line 21 or line 24 (see instructions) . . . . . . . . . . . . . . . . 25
26 Total required payments for the period. Add lines 20 and 25 . . . . . . . . . . . . . 26
27 Estimated tax payments made (line 28 of all previous columns) plus tax
withholding through the due date for the period . . . . . . . . . . . . . . . . . . . . . 27
28 Estimated tax payment required by the next due date. Subtract line 27 from line
26 and enter the result (but not less than zero) here and on your payment
voucher . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(Continued on next page)

Worksheet 2-10. 2009 Annualized Estimated Worksheet (Continued)
Section B (For Figuring Your Annualized Estimated Self-Employment Tax) — Complete each column after end of period shown.
(a) (b) (c) (d)

(Form 1040 filers only) 1/1/09 – 1/1/09 – 1/1/09 – 1/1/09 –
3/31/09 5/31/09 8/31/09 12/31/09
29 Net earnings from self-employment for the period . . . . . . . . . . 29
30 Prorated social security tax limit . . . . . . . . . . . . . . . . . . . . . . 30 $26,700 $44,500 $71,200 $106,800
31 Enter actual wages for the period subject to social security tax
or the 6.2% portion of the 7.65% railroad retirement (tier 1) tax 31
32 Subtract line 31 from line 30. If zero or less, enter -0- . . . . . . . 32
33 Annualization amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 0.496 0.2976 0.186 0.124
34 Multiply line 33 by the smaller of line 29 or line 32 . . . . . . . . . 34
35 Annualization amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 0.116 0.0696 0.0435 0.029
36 Multiply line 29 by line 35 . . . . . . . . . . . . . . . . . . . . . . . . . . 36
37 Add lines 34 and 36. Enter the result here and on line 13 of
Section A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
38 Annualization amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 8 4.8 3 2
39 Deduction for one-half of self-employment tax. Divide line 37 by
line 38. Enter the result here. Use this result to figure your AGI
on line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Worksheet 2-11. 2009 Annualized Estimated Tax Worksheet—Line 6

Phaseout of Itemized Deductions
1. Enter line 4 of Worksheet 2-10, Section A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.

2. Enter the amount included in line 1 for medical and dental expenses, investment interest, casualty or
theft losses, and gambling losses (after applying the same limits used in line 1) . . . . . . . . . . . . . . . . 2.
4. Enter line 5 of Worksheet 2-10, Section A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5. Multiply line 1 by line 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.
Note. If line 3 is zero or less, your deduction is not limited. Stop here and enter line 5 above on line 6
of Worksheet 2-10, Section A.
7. Multiply line 6 by 80% (.80) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
8. Enter line 3 of Worksheet 2-10, Section A . . . . . . . . . . . . . . . . . . 8.
9. Enter $166,800 ($83,400 if married filing separately) . . . . . . . . . . 9.
10. Subtract line 9 from line 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.
Note. If line 10 is zero or less, your deduction is not limited. Stop

here and enter line 5 of this worksheet on line 6 of Worksheet 2-10,
Section A.
11. Multiply line 10 by 3% (.03) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.
12. Enter the smaller of line 7 or line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.
13. Divide line 12 by 1.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.
14. Subtract line 13 from line 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.
15. Total itemized deductions. Subtract line 14 from line 5. Enter the result here and in the appropriate
column of Worksheet 2-10, Section A, line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.


Reduction of Exemption Amount
1. Multiply $3,650 by the number of exemptions you plan to claim . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.

2. Enter line 3 of Worksheet 2-10, Section A . . . . . . . . . . . . . . . . . . . 2.
3. Enter the amount shown below for your filing status
Single — $166,800
Married filing jointly or qualifying widow(er) — $250,200
Married filing separately — $125,100
Head of household — $208,500 . . . . . . . . . . . . . . . . . . . . . . . . . 3.
4. Subtract line 3 from line 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5. Is line 4 more than $122,500 (more than $61,250 if married filing
separately)?
Yes. Multiply $2,433 by the number of exemptions you plan to
claim and enter the result here and on line 10 of Worksheet
2-10, Section A. Do not complete the rest of this worksheet.
No. Divide line 4 by $2,500 ($1,250 if married filing separately).
If the result is not a whole number, increase it to the next higher
whole number (for example, increase 0.0004 to 1) . . . . . . . . . . 5.
6. Multiply line 5 by 2% (.02). Enter the result as a decimal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6. .
8. Divide line 7 by 3.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.
9. Deduction for exemptions. Subtract line 8 from line 1. Enter the result here and in the appropriate
column of Worksheet 2-10, Section A, line 10. Caution. If you expect to house individuals displaced by
a Midwestern disaster, enter the result on line 5 of Worksheet 2-6 and not on Worksheet 2-10 . . . . . . 9.


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 2-10 for the same period.
1. Enter the amount from the appropriate worksheet.

• Line 11 of your 2009 Annualized Estimated Tax Worksheet (Worksheet 2-10)
• Line 3 of Worksheet 2-14 (use if you will exclude or deduct foreign earned income or housing) 1.
2. Enter your annualized qualified dividends
expected for 20091 . . . . . . . . . . . . . . . . . . . 2.
3. Enter the annualized net capital gain expected
for 20091 . . . . . . . . . . . . . . . . . . . . . . . . . 3.
4. Add lines 2 and 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5. Enter your annualized 28% rate gain or loss
expected for 20092 . . . . . . . . . . . . . . . . . . . 5.
6. Enter the annualized unrecaptured section 1250
gain expected for 2009 . . . . . . . . . . . . . . . . 6.
7. Add lines 5 and 6 . . . . . . . . . . . . . . . . . . . . 7.
8. Enter the smaller of line 3 or line 7 . . . . . . . . . . . . . . . . . . . . . . . . . 8.
10. Subtract line 9 from line 1. If zero or less, enter -0- . . . . . . . . . . . . . . . 10.
11. Enter the smaller of line 1 or $67,900 ($33,950
if single or married filing separately, or $45,500
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 – 28 and go to line 29.
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.
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.
26. Add lines 14, 15, 18, and 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.
28. Multiply line 27 by 28% (.28) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.
29. Figure the tax on the amount on line 14 from the 2009 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 2009 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 in the appropriate column of the 2009 Annualized Estimated Tax Worksheet, line 12 (or line 4 of Worksheet 2-14) . . . . . 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.


Before you begin: If line 11 of Worksheet 2-10 (2009 Annualized Estimated Tax Worksheet) is zero for the period, do not complete
this worksheet.
1. Enter the amount from line 11 of your 2009 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 2009 Tax Rate Schedules or Worksheet 2-13,** as appropriate 4.
5. Tax on the amount on line 2. Use the 2009 Tax Rate Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.
6. Subtract line 5 from line 4. Enter the result here and on line 12 of your 2009 Annualized Estimated Tax
Worksheet (Worksheet 2-10). 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 2-10 for the same period.
**If using Worksheet 2-13 (Qualified Dividends and Capital Gain Tax Worksheet), enter the amount from line 3 above on
line 1 of Worksheet 2-13. Complete Worksheet 2-13 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 2-10 from line 9 of Worksheet 2-13. 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 2-13
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 2-13 as instructed above
but in its entirety and with the following additional modifications. Then complete lines 5 and 6 above.
a. Reduce (but not below zero) the amount you otherwise would enter on line 3 of Worksheet 2-13 by your
capital gain excess.
b. Reduce (but not below zero) the amount you otherwise would enter on line 2 of Worksheet 2-13 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 2-13 by your
d. Reduce (but not below zero) the amount you otherwise would enter on line 6 of Worksheet 2-13 by your
Worksheet 2-16. 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, 2009
75% (.75) if next payment is due September 15, 2009
100% (1.00) if next payment is due January 15, 2010 . . . . . . . . . . 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 15, 2010, 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, 2009, enter one-half of
the amount on line 6 here and on the payment vouchers for your payments due September 15,
2009, and January 15, 2010. If the amount on line 4 is due September 15, 2009, enter the full
amount on line 6 here and on the payment voucher for your payment due January 15, 2010 . . . . . 7.


Making Work Pay Credit Worksheet
Note. To figure the annualized entries for lines 1 and 6 below, multiply the expected amount for the period by the
annualization amount on line 2 of Worksheet 2-10 for the same period.
1. Enter the annualized earned income* you (and your spouse, if married filing jointly) expect in 2009 . . . . . 1.
2. Multiply line 1 by 6.2% (.062) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
3. Enter $400 ($800 if married filing jointly) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
4. Enter the smaller of line 2 or line 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5. Enter the amount from line 3 of Worksheet 2-10 . . . . . . . . . . . . . . . . . . . . . . . 5.
6. Enter the total of any:
• Annualized amount** of income from Puerto Rico you (and your spouse,
if married filing jointly) expect to exclude;
• Amount on Worksheet 2-14, line 2; and
• Annualized amount** of income from American Samoa you (and your
spouse, if married filing jointly) expect to exclude . . . . . . . . . . . . . . . . . . 6.
7. Add line 5 and line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
8. Enter $75,000 ($150,000 if married filing jointly) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.
9. Is the amount on line 7 more than the amount on line 8?
No. Skip line 10. Enter the amount from line 4 on line 11 below.
Yes. Subtract line 8 from line 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.
10. Multiply line 9 by 2% (.02) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.
11. Subtract line 10 from line 4. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.
12. Did you (or your spouse, if married filing jointly) receive social security benefits,
supplemental security income, railroad retirement benefits, or veterans disability
compensation or pension benefits in November or December 2008 or January
2009?
No. Enter -0-.
Yes. Enter $250 ($500 if married filing jointly) . . . . . . . . . . . . . . . . . . . . 12.
13. Do you (or your spouse, if married filing jointly) expect to receive a pension or
annuity in 2009 for services you performed as an employee of the U.S.
government or any U.S. state or local government? Do not include any pension
or annuity that you expect to be reported on Form W-2.
No. Enter -0-.
Yes. If you checked “No” on line 12, enter $250 ($500 if married filing
jointly and the answer on line 13 is “Yes” for both spouses). If you
checked “Yes” on line 12, enter -0- (exception: enter $250 if married
filing jointly and the spouse who received the pension or annuity did
not receive a payment described on line 12) . . . . . . . . . . . . . . . . . 13.
14. Add lines 12 and 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.
15. Subtract line 14 from line 11. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.
16. Making Work Pay credit (including special credit for government retirees). Add lines 13 and 15. Enter
the result here and include in the total on line 16 of Worksheet 2-10 . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.
* 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 and any nontaxable combat pay that you will include in your
earned income for this purpose. If you will be self-employed, subtract the amount from Worksheet 2-2, line 11, to figure your earned income.
** To figure the annualized amount for line 6, multiply the expected exclusion or deduction for the period by the annualization amount on line 2 of
Worksheet 2-11 for the same period.

• Form W-2G, Certain Gambling Winnings, deduction on line 28. However, you cannot de-
or duct more than the gambling winnings you re-
3. • A form in the 1099 series. port on Form 1040, line 21.

File Form W-2G with your income tax return
only if it shows any federal income tax withheld
Form W-2 from your winnings.
Credit for Your employer is required to provide or send
The 1099 Series
Form W-2 to you no later than February 2, 2009.
Withholding and You should receive a separate Form W-2 from
each employer you worked for.
Most forms in the 1099 series are not filed with
your return. In general, these forms should be
Estimated Tax If you stopped working before the end of

2008, your employer could have given you your
furnished to you by February 2, 2009. Unless
instructed to file any of these forms with your
Form W-2 at any time after you stopped working. return, keep them for your records.
for 2008 However, your employer must provide or send it
to you by February 2, 2009.
There are several different forms in this se-
ries, including:
If you ask for the form, your employer must • Form 1099-B, Proceeds From Broker and
What’s New for 2008 send it to you within 30 days after receiving your
written request or within 30 days after your final
Barter Exchange Transactions;
wage payment, whichever is later. • Form 1099-C, Cancellation of Debt;

Excess social security or railroad retirement • Form 1099-DIV, Dividends and Distribu-
If Form W-2 is mailed, you should allow ade-
tax withholding. You can claim a credit for tions;
quate time to receive it before contacting your
excess social security or tier 1 railroad retire-
ment tax withholding for 2008 only if your total employer. If you still do not get the form by • Form 1099-G, Certain Government Pay-
wages from two or more employers were more February 17, the IRS can help you by requesting ments;
than $102,000. the form from your employer. The phone num-
ber for the IRS is listed in chapter 5. You will be • Form 1099-INT, Interest Income;
Conservation reserve program (CRP) pay- asked for the following information. • Form 1099-MISC, Miscellaneous Income;
ments. CRP payments are excluded from
self-employment tax for individuals receiving so-
• Your employer’s name, address, city, and • Form 1099-OID, Original Issue Discount;
state, including zip code.
cial security benefits for retirement or disability. • Form 1099-Q, Payments From Qualified
• Your name, address, city and state, in- Education Programs;
cluding zip code, and social security num-
• Form 1099-R, Distributions From Pen-
ber.
Introduction • An estimate of the wages you earned, the
sions, Annuities, Retirement or
Profit-Sharing Plans, IRAs, Insurance
When you file your 2008 income tax return, take federal income tax withheld, and the pe- Contracts, etc.;
credit for all the income tax and excess social riod you worked for that employer. The
• Form SSA-1099, Social Security Benefit
security or railroad retirement tax withheld from estimate should be based on year-to-date
Statement; and
your salary, wages, pensions, etc. Also take information from your final pay stub or
credit for the estimated tax you paid for 2008. leave-and-earnings statement, if possible. • Form RRB-1099, Payments by the Rail-
These credits are subtracted from your tax. Be- road Retirement Board.
cause these credits are refundable, you should Form W-2 shows your total pay and other
file a return and claim these credits, even if you compensation and the income tax, social secur- If you received the types of income reported
do not owe tax. ity tax, and Medicare tax that was withheld dur- on some forms in the 1099 series, you may not
If the total of your withholding and your esti- ing the year. Include the federal income tax be able to use Form 1040A or Form 1040EZ.
mated tax payments for any payment period is withheld (as shown on Form W-2) on: See the instructions to these forms for details.
less than the amount you needed to pay by the
due date for that period, you may be charged a
• Line 62, if you file Form 1040;
Form 1099-R. Attach Form 1099-R to your
penalty, even if the total of these credits is more • Line 38, if you file Form 1040A; or return if federal income tax withholding is shown
than your tax for the year. in box 4. Include the amount withheld in the total
• Line 7, if you file Form 1040EZ.
on line 62 of Form 1040, or on line 38 of Form
Topics In addition, Form W-2 is used to report any 1040A. You cannot use Form 1040EZ if you
This chapter discusses: taxable sick pay you received and any income received payments reported on Form 1099-R.
tax withheld from your sick pay.
• How to take credit for withholding, Backup withholding. If you were subject to
Always file Form W-2 with your income tax
• How to take credit for estimated taxes you backup withholding on income you received dur-
return.
paid, and ing 2008, include the amount withheld, as
shown in box 4 of your Form 1099, in the total on
• How to take credit for excess social secur- Form W-2G line 62 of Form 1040, line 38 of Form 1040A, or
ity or railroad retirement tax withholding. line 7 of Form 1040EZ.
If you had gambling winnings in 2008, the payer
may have withheld income tax. If tax was with-
held, the payer will give you a Form W-2G show- Form Not Correct
ing the amount you won and the amount of tax
If you receive a form with incorrect information,
Withholding withheld.
you should ask the payer for a corrected form.
Report the amounts you won on line 21 of Call the telephone number or write to the ad-
If you had income tax withheld during 2008, you Form 1040. Take credit for the tax withheld on dress given for the payer on the form. The cor-
generally should be sent a statement by Febru- line 62 of Form 1040. If you had gambling win- rected Form W-2G or Form 1099 you receive will
ary 2, 2009, showing your income and the tax nings, you must use Form 1040; you cannot use have an “X” in the “CORRECTED” box at the top
withheld. Depending on the source of your in- Form 1040A or Form 1040EZ. of the form. A special form, Form W-2c, Cor-
come, you will receive: Gambling losses can be deducted on Sched- rected Wage and Tax Statement, is used to
• Form W-2, Wage and Tax Statement, ule A (Form 1040) as a miscellaneous itemized correct a Form W-2.
Page 50 Chapter 3 Credit for Withholding and Estimated Tax for 2008
Form Received After Filing Fiscal Years (FY) Backup withholding. If income tax has been
withheld under the backup withholding rule, take
If you file your return and you later receive a If you file your tax return on the basis of a fiscal credit for it on your tax return for the fiscal year in
form for income that you did not include on your year (a 12-month period ending on the last day which you received the income.
return, you should report the income and take of any month except December), you must fol-
credit for any income tax withheld by filing Form low special rules, described below, to determine Example. Emily Smith’s records show that
1040X, Amended U.S. Individual Income Tax your credit for federal income tax withholding. she received income in November 2008 and
Return. February 2009 from which there was backup
Normal withholding. You can claim credit on withholding ($100 and $50, respectively). Emily
Separate Returns your tax return only for the tax withheld during takes credit for the entire $150 of backup with-
holding on her tax return for the fiscal year end-
the calendar year ending within your fiscal year.
If you are married but file a separate return, you You cannot claim credit for any of the tax with- ing September 30, 2009.
can take credit only for the tax withheld from held during the calendar year beginning in your
your own income. Do not include any amount fiscal year. You will be able to claim credit for
withheld from your spouse’s income. However, that withholding on your return for your next
different rules may apply if you live in a commu- fiscal year. Estimated Tax
nity property state. The Form W-2 or 1099-R you receive for the
calendar year that ends during your fiscal year Take credit for all your estimated tax payments
Community property states. The following will show the tax withheld and the income you for 2008 on line 63 of Form 1040 or line 39 of
are community property states. received during that calendar year. Form 1040A. Include any overpayment from
• Arizona. Although you take credit for all the withheld 2007 that you had credited to your 2008 esti-
tax shown on the form, report only the part of the mated tax. You must use Form 1040 or Form
• California. income shown on the form that you received 1040A if you paid estimated tax. You cannot use
• Idaho. during your fiscal year. Add to that the income Form 1040EZ.
you received during the rest of your fiscal year. If you were a beneficiary of an estate or trust,
• Louisiana. you should receive a Schedule K-1 (Form 1041),
• Nevada. Example. Miles Hanson files his return for a Beneficiary’s Share of Income, Deductions,
fiscal year ending June 30, 2008. In January Credits, etc., from the fiduciary. If you have esti-
• New Mexico. 2008, he received a Form W-2 that showed that mated taxes credited to you from the estate or
• Texas. his wages for 2007 were $31,200 and that his trust (from Schedule K-1 (Form 1041), box 13,
income tax withheld was $3,432. His records code A), you must use Schedule E (Form 1040).
• Washington. show that he had received $15,000 of the wages On the dotted line next to the entry space for line
• Wisconsin. by June 30, 2007, and $16,200 from July 1 37 of Schedule E (Form 1040), enter “ES pay-
through December 31, 2007. See Table 3-1 be- ment claimed” and the amount. However, do not
Generally, if you live in a community property low. include this amount in the total on line 37. In-
state and file a separate return, you and your On his return for the fiscal year ending June stead, enter the amount on Form 1040, line 63.
spouse each must report half of all community 30, 2008, Miles will report the $16,200 he was The payment is treated as being made by you on
income in addition to your own separate income. paid in July through December of 2007, plus the January 15, 2009.
If you are required to report half of all community $18,125 he was paid during the rest of the fiscal
income, you are entitled to take credit for half of year, January 1, 2008, to June 30, 2008. How- Name changed. If you changed your name,
all taxes withheld on the community income. If ever, he takes credit for all $3,432 that was and you made estimated tax payments using
you were divorced during the year, each of you withheld during 2007. your former name, attach a statement to the
generally must report half the community in- On his return for the fiscal year ending June front of your tax return indicating:
come and can take credit for half the withholding 30, 2007, he reported the $15,000 he was paid
on that community income for the period before • When you made the payments,
in January through June 2007, but took no credit
the divorce. for the tax withheld during that time. On his • The amount of each payment,
For more information on these rules, and return for the fiscal year ending June 30, 2009,
• The IRS address to which you sent the
some exceptions, see Publication 555, Commu- he can take credit for any tax withheld during
payments,
nity Property. 2008 but not for any tax withheld during 2009.
• Your name when you made the payments,
Table 3-1. Example for Fiscal Year Ending June 30, 2008 — Miles Hanson and
Tax return for FY Tax return for FY • The social security number under which
Form W-2 Miles’ records ending 6/30/20071 ending 6/30/2008 you made the payments.
With- With- With- With- The statement should cover payments you
Date Wages holding Wages holding Wages holding Wages holding made jointly with your spouse as well as any you
CY 20072 $31,200 $3,432
made separately.
1/1 – 6/30/ $15,000 $1,650 $15,000

Be sure to report the change to your local
2007 Social Security Administration office before filing
your 2009 tax return. This prevents delays in
7/1 – 12/31/ 16,200 1,782 $16,200 $3,432 processing your return and issuing refunds. It
2007
also safeguards your future social security ben-
CY 2008 $37,700 $4,3683 efits. For more details, call the Social Security
Administration at 1-800-772-1213.
1/1 – 6/30/ $18,125 $2,100 $18,125
2008
7/1 – 12/31/ 19,5754 2,268
Separate Returns
2008
If you and your spouse made separate esti-
1 Miles’ tax return for FY ending 6/30/2007 also included his wages for 7/1 – 12/31/2006 and the withholding shown on mated tax payments for 2008 and you file sepa-
his 2006 Form W-2. rate returns, you can take credit only for your
2 Calendar year (January 1 – December 31).
3 Withholding shown on 2008 Form W-2 ($4,368) will be included in Miles’ tax return for FY ending 6/30/2009, the fiscal own payments.
year in which calendar year 2008 ends. If you made joint estimated tax payments,
4 Wages for 7/1 – 12/31/2008 ($19,575) will be included in Miles’ tax return for FY ending 6/30/2009, the fiscal year in
you must decide how to divide the payments
which the wages were received.
between your returns. One of you can claim all
Chapter 3 Credit for Withholding and Estimated Tax for 2008 Page 51
of the estimated tax paid and the other none, or Table 3-2. Maximum Social Where to claim credit for excess social se-
you can divide it in any other way you agree on. Security and RRTA curity withholding. If you file Form 1040,
If you cannot agree, you must divide the pay- Withholding for 2008 enter the excess on line 65.
ments in proportion to each spouse’s individual
tax as shown on your separate returns for 2008. Maximum If you file Form 1040A, include the excess in
wages Maximum the total on line 43. Write “Excess SST” and
Example. James and Evelyn Brown made subject Tax tax to be show the amount of the credit in the space to the
joint estimated tax payments for 2008 totaling Type of tax to tax rate withheld left of the line.
$3,000. They file separate 2008 Forms 1040. Social security . $102,000 6.2% $6,324.00 You cannot claim excess social security tax
James’ tax is $4,000 and Evelyn’s is $1,000. If Tier 1 RRTA . . $102,000 6.2% $6,324.00 withholding on Form 1040EZ.
they do not agree on how to divide the $3,000, Tier 2 RRTA . . $75,900 3.9% $2,960.10
they must divide it proportionately between their
Example. In 2008, Tom Martin earned
returns. Because James’ tax ($4,000) is 80% of
$58,000 working for Company A and $47,200
the total tax ($5,000), his share of the estimated
tax is $2,400 (80% of $3,000). The balance, Joint returns. If you are filing a joint return, working for Company B. Company A withheld
$600 (20% of $3,000), is Evelyn’s share. you cannot add any social security or tier 1 $3,596 for social security tax. Company B with-
RRTA tax withheld from your spouse’s income held $2,926.40 for social security tax. Because
Divorced Taxpayers to the amount withheld from your income. You he worked for two employers and earned more
must figure the excess separately for both you than $102,000, he had too much social security
If you made joint estimated tax payments for and your spouse to determine if either of you has tax withheld. Tom figures his credit of $198.40,
2008, and you were divorced during the year, excess withholding. as shown on the illustrated Worksheet 3-1 be-
either you or your former spouse can claim all of low.
the joint payments, or you each can claim part of Note. All wages are subject to Medicare tax
them. If you cannot agree on how to divide the
payments, you must divide them in proportion to
withholding. Worksheets for
each spouse’s individual tax as shown on your Railroad Employees
separate returns for 2008. See Example above Employer’s error. If any one employer with-
under Separate Returns. held too much social security or tier 1 RRTA tax, If you worked for a railroad during 2008, figure
If you claim any of the joint payments on your you cannot claim the excess as a credit against your excess withholding on Worksheets 3-2 and
tax return, enter your former spouse’s social your income tax. The employer should adjust 3-3 on the next page.
security number (SSN) in the space provided at the tax for you. If the employer does not adjust
the top of page 1 of Form 1040 or Form 1040A. If the overcollection, you can file a claim for refund Where to claim credit for excess tier 1 RRTA
you divorced and remarried in 2008, enter your using Form 843, Claim for Refund and Request withholding. If you file Form 1040, enter the
present spouse’s SSN in that space. Enter your
for Abatement. excess on line 65.
former spouse’s SSN, followed by “DIV,” under
Payments to the left of Form 1040, line 63, or in If you file Form 1040A, include the excess in
the blank space to the left of Form 1040A, line Worksheet for the total on line 43. Write “Excess SST” and
39. Nonrailroad Employees show the amount of the credit in the space to the
left of the line.
If you did not work for a railroad during 2008,
figure the excess social security withholding on You cannot claim excess tier 1 RRTA with-
Excess Social Security Worksheet 3-1 (see blank worksheet on the next holding on Form 1040EZ.
page).
or Railroad Retirement How to claim refund of excess tier 2 RRTA.
Note. If you worked for both a railroad em-
Tax Withholding ployer and a nonrailroad employer, use Work-
To claim a refund of tier 2 tax, use Form 843. Be
sure to attach a copy of all of your W-2 forms.
sheet 3-2 on the next page to figure excess
Most employers must withhold social security social security and tier 1 RRTA tax.
tax from your wages. In some cases, however,
the federal government and state and local gov-
ernments do not have to withhold social security
Worksheet 3-1. Excess Social Security—Nonrailroad Employees
tax from their employees’ wages. If you work for
—Illustrated (Tom Martin)
a railroad employer, that employer must with-
hold tier 1 railroad retirement (RRTA) tax and 1. Add all social security tax withheld (but not more than $6,324 for
tier 2 RRTA tax. each employer). This tax should be shown in box 4 of your
Two or more employers. If you worked for
Forms W-2. Enter the total here . . . . . . . . . . . . . . . . . . . . . . . 1. $6,522.40
two or more employers in 2008, too much social 2. Enter any uncollected social security tax on tips or group-term
security tax or tier 1 RRTA tax may have been life insurance included in the total on Form 1040, line 61 . . . . . 2. -0-
withheld from your pay. You may be able to
claim the excess as a credit against your income 3. Add lines 1 and 2. If $6,324 or less, stop here. You cannot claim
tax when you file your return. Table 3-2 shows the credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. 6,522.40
the maximum amount that should have been 4. Social security limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. $6,324
withheld for any of these taxes for 2008. Figure
the excess withholding on the appropriate work- 5. Excess. Subtract line 4 from line 3 . . . . . . . . . . . . . . . . . . . . . 5. $198.40
sheet on page 53.
Page 52 Chapter 3 Credit for Withholding and Estimated Tax for 2008
Worksheet 3-1. Excess Social Security—Nonrailroad Employees
1. Add all social security tax withheld (but not more than $6,324 for
each employer). This tax should be shown in box 4 of your
Forms W-2. Enter the total here . . . . . . . . . . . . . . . . . . . . . . . 1.
2. Enter any uncollected social security tax on tips or group-term
life insurance included in the total on Form 1040, line 61 . . . . . 2.
3. Add lines 1 and 2. If $6,324 or less, stop here. You cannot claim
the credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
4. Social security limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. $6,324
5. Excess. Subtract line 4 from line 3 . . . . . . . . . . . . . . . . . . . . . 5.
Worksheet 3-2. Excess Social Security and Tier 1 RRTA—Railroad

Employees
1. Add all social security and tier 1 RRTA tax withheld (but not
more than $6,324 for each employer). Social security tax should
be shown in box 4 and tier 1 RRTA should be shown in box 14
of your Forms W-2. Enter the total here . . . . . . . . . . . . . . . . . 1.
2. Enter any uncollected social security and tier 1 RRTA tax on tips
or group-term life insurance included in the total on Form 1040,
line 61 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
3. Add lines 1 and 2. If $6,324 or less, stop here. You cannot claim
the credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
4. Social security and tier 1 RRTA tax limit . . . . . . . . . . . . . . . . . 4. $6,324
5. Excess. Subtract line 4 from line 3 . . . . . . . . . . . . . . . . . . . . . 5.
Worksheet 3-3. Excess Tier 2 RRTA—Railroad Employees
1. Add all tier 2 RRTA tax withheld (but not more than $2,960.10
for each employer). Box 14 of your Forms W-2 should show tier
2 RRTA tax. Enter the total here . . . . . . . . . . . . . . . . . . . . . . 1.
2. Enter any uncollected tier 2 RRTA tax on tips or group-term life
insurance included in the total on Form 1040, line 61 . . . . . . . . 2.
3. Add lines 1 and 2. If $2,960.10 or less, stop here. You cannot
claim the credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
4. Tier 2 RRTA tax limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. $2,960.10
5. Excess. Subtract line 4 from line 3. . . . . . . . . . . . . . . . . . . . . 5.
Chapter 3 Credit for Withholding and Estimated Tax for 2008 Page 53
• You did not have a tax liability for 2007. Special rules for certain individuals. There
are special rules for farmers and fishermen, and
• You did not have any withholding taxes
4. and your current year tax less any house-
hold employment taxes is less than
for certain higher income taxpayers.
Farmers and fishermen. If at least
$1,000. two-thirds of your gross income for 2007 or 2008
Underpayment
is from farming or fishing, substitute 662/3% for
Special rules apply if you are a farmer or fisher- 90% in (1) above.
man. See Farmers and Fishermen on page 60.
Penalty IRS can figure the penalty for you. If you Higher income taxpayers. If your AGI for
2007 was more than $150,000 ($75,000 if your
think you owe the penalty, but you do not want to
for 2008 figure it yourself when you file your tax return,
you may not have to. Generally, the IRS will
2008 filing status is married filing a separate
return), substitute 110% for 100% in (2) above.
This rule does not apply to farmers or fishermen.
figure the penalty for you and send you a bill. For 2007, AGI is the amount shown on Form
What’s New for 2008 You only need to figure your penalty in the
following three situations.
1040, line 37; Form 1040A, line 21; and Form
1040EZ, line 4.
You should consider the items in this section • You are requesting a waiver of part, but Penalty figured for each period. Because
when figuring any underpayment penalty for not all, of the penalty. the penalty is figured separately for each pay-
2008. ment period, you may owe a penalty for a pay-
• You are using the annualized income in- ment period even if you later paid enough to
Penalty rate. The penalty for underpayment stallment method to figure the penalty. make up the underpayment. If you did not pay
of 2008 estimated tax is figured at an annual rate
of 6% for the number of days the underpayment
• You are treating the federal income tax enough tax by the due date of any of the pay-
withheld from your income as paid on the ment periods, you may owe a penalty even if you
remained unpaid from April 16, 2008, through are due a refund when you file your income tax
June 30, 2008; 5% for the number of days the dates actually withheld.
return.
underpayment remained unpaid from July 1, However, if these situations do not apply to you,
2008, through September 30, 2008; 6% for the and you think you can lower or eliminate your Example. You did not make estimated tax
number of days the underpayment remained penalty, complete Form 2210 or Form 2210-F payments for 2008 because you thought you
unpaid from October 1, 2008, through Decem- and attach it to your return. See Form 2210 on had enough tax withheld from your wages. Early
ber 31, 2008; and 5% from January 1, 2009, in January 2009, you made an estimate of your
page 55.
through April 15, 2009. total 2008 tax. Then you realized that your with-
Topics holding was $2,000 less than the amount
Waiver of penalty for certain federally de-
needed to avoid a penalty for underpayment of
clared disasters. Generally, required esti- This chapter discusses: estimated tax.
mated tax payment deadlines were extended for
On January 10, you made an estimated tax
taxpayers affected by federally declared disas- • The general rule for the underpayment payment of $3,000, which is the difference be-
ters. You will be granted a waiver of all or part of penalty, tween your withholding and your estimate of
your underpayment of tax penalty for late pay-
ments due to such disaster. See the Instructions • Special rules for certain individuals, your total tax. Your final return shows your total
tax to be $50 less than your estimate, so you are
for Form 2210, Underpayment of Estimated Tax • Exceptions to the underpayment penalty, due a refund.
by Individuals, Estates, and Trusts, for more
details. • How to figure your underpayment and the You do not owe a penalty for your payment
amount of your penalty on Form 2210, and due January 15, 2009. However, you may owe a
penalty through January 10, 2009, the day you
• How to ask the IRS to waive the penalty. made the $3,000 payment, for your underpay-
Introduction Useful Items
ments for the earlier payment periods.
Minimum required each period. You will
If you did not pay enough tax, either through owe a penalty for any 2008 payment period for
You may want to see:
withholding or by making estimated tax pay- which your estimated tax payment plus your
ments, you will have underpaid your estimated withholding for the period and overpayments for
Form (and Instructions)
tax and may have to pay a penalty. previous periods was less than the smaller of:
You may understand this chapter better if ❏ 2210 Underpayment of Estimated Tax by
you can refer to copies of your latest federal Individuals, Estates, and Trusts 1. 22.5% of your 2008 tax, or
income tax returns.
❏ 2210-F Underpayment of Estimated Tax 2. 25% of your 2007 tax. (Your 2007 tax re-
No penalty. Generally, you will not have to by Farmers and Fishermen turn must cover a 12-month period.)
pay a penalty for 2008 if any of the following
situations apply. See chapter 5 for information about getting Note. If you are subject to the rule for higher
these forms. income taxpayers, discussed earlier, substitute
• The total of your withholding and esti-
27.5% for 25% in (2) above.
mated tax payments was at least as much
as your 2007 tax (or 110% of your 2007 When penalty is charged. If you miss a
tax if your adjusted gross income (AGI) payment or you paid less than the minimum
was more than $150,000, $75,000 if your General Rule required in a period, you may be charged an
2008 filing status is married filing sepa- underpayment penalty from the date the amount
rately), and you paid all required estimated In general, you may owe a penalty for 2008 if the was due to the date the payment is made.
tax payments on time. total of your withholding and estimated tax pay-
Estate or trust payments of estimated tax. If
• The tax balance due on your return is no ments did not equal at least the smaller of: you have estimated taxes credited to you from
more than 10% of your total 2008 tax, and 1. 90% of your 2008 tax, or an estate or trust (Schedule K-1 (Form 1041),
you paid all required estimated tax pay- box 13, code A), treat the payment as made by
ments on time. 2. 100% of your 2007 tax. (Your 2007 tax you on January 15, 2009.
return must cover a 12-month period.)
• Your total 2008 tax (defined on page 55) Amended returns. If you file an amended re-
minus your withholding is less than Your 2008 tax, for this purpose, is defined under turn by the due date of your original return, use
$1,000. Total tax for 2008 on page 55. the tax shown on your amended return to figure
Page 54 Chapter 4 Underpayment Penalty for 2008

your required estimated tax payments. If you file the penalty to your tax due and show your total • Tax on Archer MSA, Medicare Advantage
an amended return after the due date of the payment on line 47. If you are due a refund, MSA, or health savings account distribu-
original return, use the tax shown on the original subtract the penalty from the overpayment and tions not used for qualified medical ex-
return. enter the result on line 44. penses (included on line 61).
However, if you and your spouse file a joint
return after the due date to replace separate Lowering or eliminating the penalty. You • Additional tax on a health savings account
may be able to lower or eliminate your penalty if because you did not remain an eligible
returns you originally filed by the due date, use
you file Form 2210. You must file Form 2210 individual during the test period (included
the tax shown on the joint return to figure your
with your return if any of the following applies. on line 61).
required estimated tax payments. This rule ap-
plies only if both original separate returns were • You request a waiver. See Waiver of Pen- • Section 72(m)(5) excess benefits tax (in-
filed on time. alty on page 60. cluded on line 61).
2007 separate returns and 2008 joint return. • You use the annualized income install- • Advance earned income credit payments
If you file a joint return with your spouse for ment method. See the explanation of this (line 60).
2008, but you filed separate returns for 2007, method under Annualized Income Install- • Tax on accumulation distribution of trusts
your 2007 tax is the total of the tax shown on ment Method (Schedule AI) beginning on (included on line 61).
your separate returns. You filed a separate re- page 57.
turn if you filed as single, head of household, or • Interest due under sections 453(l)(3) and
married filing separately. • You use your actual withholding for each 453A(c) on certain installment sales of
payment period for estimated tax pur- property (included on line 61).
2007 joint return and 2008 separate returns. poses. See Actual withholding method
If you file a separate return for 2008, but you under Figuring Your Underpayment (Part • An increase or decrease in tax as a share-
IV, Section A) on page 57. holder in a qualified electing fund (in-
filed a joint return with your spouse for 2007,
cluded on line 61).
your 2007 tax is your share of the tax on the joint
• You base any of your required install-
return. You are filing a separate return if you file
ments on the tax shown on your 2007 re-
• Tax on electing small business trusts in-
as single, head of household, or married filing cluded on Form 1041, Schedule G, line 7
turn and you filed or are filing a joint return
separately. (included on line 61).
for either 2007 or 2008, but not for both
To figure your share of the taxes on a joint
return, first figure the tax both you and your
years. • Tax on income not effectively connected
with a U.S. trade or business from Form
spouse would have paid had you filed separate
1040NR, lines 52 and 55 (included on line
returns for 2007 using the same filing status as
61).
for 2008. Then multiply the tax on the joint return
by the following fraction. Exceptions • Household employment taxes, including
any advance EIC payments made to your
The tax you would have paid employees (line 60). See the Instructions
had you filed a separate return Generally, you do not have to pay an underpay-
ment penalty if either: for Form 2210, Line 2, for an exception to
The total tax you and your including this amount.
spouse would have paid had • Your total tax is less than $1,000, or
you filed separate returns
• Additional tax on income you received
• You had no tax liability last year. from a nonqualified deferred compensa-
tion plan that fails to meet certain require-
Example. Lisa and Paul filed a joint return ments (included on line 61).
for 2007 showing taxable income of $49,000 Less Than $1,000 Due
and a tax of $6,571. Of the $49,000 taxable • Additional tax on recapture of a charitable
You do not owe a penalty if the total tax shown contribution deduction relating to the con-
income, $41,000 was Lisa’s and the rest was
on your return minus the amount you paid tribution of a fractional interest in tangible
Paul’s. For 2008, they file married filing sepa-
through withholding (including excess social se- personal property (included on line 61).
rately. Lisa figures her share of the tax on the
curity and tier 1 railroad retirement (RRTA) tax
2007 joint return as follows.
withholding) is less than $1,000. From the total of Form 1040, line 56 and the
2007 tax on $41,000 based on a other taxes listed above, subtract the following
separate return . . . . . . . . . . . . . . . $ 6,680 Total tax for 2008. For 2008, your total tax on refundable credits.
2007 tax on $8,000 based on a Form 1040 is the amount on line 56 increased by
separate return . . . . . . . . . . ..... 813
• Earned income credit (line 64a).
certain other taxes and reduced by certain re-
Total . . . . . . . . . . . . . . . . . . . . . . . $ 7,493 fundable credits. • Additional child tax credit (line 66).
Lisa’s percentage of total tax
($6,680 ÷ $ 7,493) . . . . . . . . . . . . . 89.15% Add the total of the following taxes to the • Credit for federal tax paid on fuels (in-
Lisa’s part of tax on joint return amount on Form 1040, line 56. cluded on line 68, box b).
($6,571 × 89.15%) . . . . . . . . . . . . . $ 5,858
• Self-employment tax (line 57). • Refundable credit for prior year minimum
• Tax from recapture of investment credit, tax (line 68, box c).
Form 2210. In most cases, you do not need to
file Form 2210. The IRS will figure the penalty for low-income housing credit, qualified elec- • Health coverage tax credit (included on
you and send you a bill. If you want us to figure tric vehicle credit, Indian employment line 68, box d).
the penalty for you, leave the penalty line on credit, new markets credit, alternative mo-
tor vehicle credit, alternative fuel vehicle
• First-time homebuyer credit (line 69).
your return blank. Do not file Form 2210.
To determine if you should file Form 2210, refueling property credit, or credit for em- • Recovery rebate credit (line 70).
see Part II of Form 2210. If you decide to figure ployer-provided childcare facilities (in-
your penalty, complete Part I, Part II, and either cluded on line 61). Your total tax on Form 1040A is the amount
Part III or Part IV of Form 2210. If you use Form on line 37 minus the amount on lines 40a, 41,
• Tax on early distributions from (a) an IRA and 42. Your total tax on Form 1040EZ is the
2210, you cannot file Form 1040EZ. or other qualified retirement plan, (b) an
On Form 1040, enter the amount of your amount on line 11 minus the amount on lines 8a
annuity, or (c) a modified endowment con-
penalty on line 76. If you owe tax on line 75, add and 9.
tract entered into after June 20, 1988 (in-
the penalty to your tax due and show your total
cluded on line 59).
payment on line 75. If you are due a refund, Paid through withholding. For 2008, the
subtract the penalty from the overpayment and • Tax on distributions from a Coverdell edu- amount you paid through withholding on Form
enter the result on line 72. cation savings account or a qualified tui- 1040 is the amount on line 62 plus any excess
On Form 1040A, enter the amount of your tion program not used for qualified social security or tier 1 RRTA tax withholding on
penalty on line 48. If you owe tax on line 47, add education expenses (included on line 59). line 65. On Form 1040A, the amount you paid
Chapter 4 Underpayment Penalty for 2008 Page 55

through withholding is the amount on line 38 • Tax on accumulation distribution of trusts tax ($10,000) and less than 90% of her 2008 tax,
plus any excess social security or tier 1 RRTA (included on line 63). and does not meet an exception, Ivy knows that
tax withholding included on line 43. On Form she owes a penalty for underpayment of esti-
• Interest due under sections 453(l)(3) and mated tax. The IRS will figure the penalty for Ivy,
1040EZ, it is the amount on line 7.
453A(c) on certain installment sales of
but she decides to figure it herself on Form 2210
property (included on line 63).
No Tax Liability Last Year and pay it with her $2,600 tax balance when she
• An increase or decrease in tax as a share- files her tax return.
You do not owe a penalty if you had no tax holder in a qualified electing fund (in- Ivy’s required annual payment is $9,900
liability last year and you were a U.S. citizen or cluded on line 63). ($11,000 × 90%) because that is smaller than
resident for the whole year. For this rule to apply, • Tax on electing small business trusts in- her 2007 tax.
your tax year must have included all 12 months cluded on Form 1041, Schedule G, line 7 Figure 4-A on page 62 shows page 1 of Ivy’s
of the year. (included on line 63). filled-in Form 2210. Her required annual pay-
You had no tax liability for 2007 if your total ment of $9,900 is shown on line 9.
tax was zero or you were not required to file an • Tax on income not effectively connected
income tax return. with a U.S. trade or business from Form Different 2007 filing status. If you file a sepa-
1040NR, lines 53 and 56 (included on line rate return for 2008, but you filed a joint return
Example. Ray, who is single and 22 years 63). with your spouse for 2007, see 2007 joint return
and 2008 separate returns on page 55 to figure
old, was unemployed for most of 2007. He • Household employment taxes, including
earned $2,700 in wages before he was laid off, the amount to enter as your 2007 tax on line 8 of
any advance EIC payments made to your
and he received $2,500 in unemployment com- Form 2210.
employees (line 62). See the Instructions
pensation afterwards. He had no other income. for Form 2210, Line 2, for an exception to
Even though he had gross income of $5,200, he including this amount.
did not have to pay income tax because his
gross income was less than the filing require- • Additional tax on income you received
from a nonqualified deferred compensa-
Short Method for
ment for a single person under age 65 ($8,750
for 2007). He filed a return only to have his tion plan that fails to meet certain require- Figuring the Penalty
ments (included on line 63).
withheld income tax refunded to him.
In 2008, Ray began regular work as an inde- • Additional tax on recapture of a charitable (Part III)
pendent contractor. Ray made no estimated tax contribution deduction relating to the con-
You may be able to use the short method in Part
payments in 2008. Even though he did owe tax tribution of a fractional interest in tangible
III of Form 2210 to figure your penalty for un-
at the end of the year, Ray does not owe the personal property (included on line 63).
derpayment of estimated tax. If you qualify to
underpayment penalty for 2008 because he had
use this method, it will result in the same penalty
no tax liability in 2007. From the total of Form 1040, line 57 and the
amount as the regular method. However, either
other taxes listed above, subtract the following
the annualized income installment method or
Total tax for 2007. For 2007, your total tax on refundable credits.
the actual withholding method, explained later,
Form 1040 is the amount on line 57 increased by • Earned income credit (line 66a). may result in a smaller penalty.
certain other taxes and reduced by certain re- You can use the short method only if you
fundable credits. • Additional child tax credit (line 68).
meet one of the following requirements.
Add the total of the following taxes to the • Credit for federal tax paid on fuels (in-
amount on Form 1040, line 57. cluded on line 70, box b). • You made no estimated tax payments for
2008 (it does not matter whether you had
• Self-employment tax (line 58). • Health coverage tax credit (included on income tax withholding).
line 70, box c).
• Tax from recapture of investment credit, • You paid the same amount of estimated
low-income housing credit, qualified elec- • Refundable credit for prior year minimum tax on each of the four payment due
tric vehicle credit, Indian employment tax (line 71). dates.
credit, new markets credit, alternative mo-
tor vehicle credit, alternative fuel vehicle Your total tax on Form 1040A is the amount If you do not meet either requirement, figure
refueling property credit, or credit for em- on line 37 minus the amount on lines 40a and your penalty using the regular method in Form
ployer-provided childcare facilities (in- 41. Your total tax on Form 1040EZ is the amount 2210, Part IV.
cluded on line 63). on line 10 minus the amount on line 8a.
Note. If any payment was made before the
• Tax on early distributions from (a) an IRA
due date, you can use the short method, but the
or other qualified retirement plan, (b) an
penalty may be less if you use the regular
annuity, or (c) a modified endowment con-
tract entered into after June 20, 1988 (in- Figuring Your Required method. However, if the payment was only a few
days early, the difference is likely to be small.
cluded on line 60).
Annual Payment You cannot use the short method if any of the
• Tax on distributions from a Coverdell edu- following applies.
cation savings account or a qualified tui- (Part I) • You made any estimated tax payments
tion program not used for qualified
Figure your required annual payment in Part I of late.
education expenses (included on line 60).
• Tax on Archer MSA, Medicare Advantage
Form 2210, following the line-by-line instruc- • You checked box C or D in Part II of Form
tions. If you rounded the entries on your tax 2210.
MSA, or health savings account distribu-
return to whole dollars, you can round on Form
tions not used for qualified medical ex-
2210. • You are filing Form 1040NR or
penses (included on line 63). 1040NR-EZ and you did not receive
wages as an employee subject to U.S. in-
• Additional tax on a health savings account Example. The tax on Ivy Fields’ 2007 return
was $10,000. Her AGI was not more than come tax withholding.
because you did not remain an eligible
individual during the test period (included $150,000. The tax on her 2008 return (Form
on line 63). 1040, line 44) is $11,000. She does not claim If you use the short method, you can-
• Section 72(m)(5) excess benefits tax (in-
any credits or pay any other taxes.
For 2008, Ivy had $1,600 income tax with-
!
CAUTION
not use the annualized income install-
ment method to figure your
cluded on line 63).
held and paid $6,800 estimated tax. Her total underpayment for each payment period. Also,
• Advance earned income credit payments payments were $8,400. 90% of her 2008 tax is you cannot use your actual withholding during
(line 61). $9,900. Because she paid less than her 2007 each period to figure your payments for each

period. These methods, which may give you a Actual withholding method. Instead of us-
smaller penalty amount, are explained starting
on this page under Figuring Your Underpayment
Regular Method for ing one-fourth of your withholding for each quar-
ter, you can choose to use the amounts actually
(Part IV, Section A). Figuring the Penalty withheld by each due date. You can make this
choice separately for the tax withheld from your
Completing Part III. Complete Part III of Form

(Part IV) wages and for all other withholding. This in-
cludes any excess social security and tier 1
2210 following the line-by-line instructions. You may use the regular method in Part IV of RRTA tax withheld.
First, figure your total underpayment for the Form 2210 to figure your penalty for underpay- Using your actual withholding may result in a
year (line 14) by subtracting the total of your ment of estimated tax if you paid one or more smaller penalty if most of your withholding oc-
withholding and estimated tax payments (line estimated tax payments earlier than the due curred early in the year.
13) from your required annual payment (line 10). date. If you use your actual withholding, you must
Then figure the penalty you would owe if the You must use the regular method in Part IV check box D in Form 2210, Part II. Then com-
underpayment remained unpaid up to April 15, of Form 2210 to figure your penalty for un- plete Form 2210 and file it with your return.
2009. This amount (line 15) is the maximum derpayment of estimated tax if any of the follow-
estimated tax penalty on your underpayment. ing apply to you.
Regular Installment Method
Next, figure any part of the maximum penalty • You paid one or more estimated tax pay-
you do not owe (line 16) because your un- ments on a date after the due date. If you received your income evenly throughout
derpayment was paid before the due date of the year, use the regular installment method to
your return. For example, if you filed your 2008 • You paid at least one, but less than four, figure your estimated tax underpayment for the
return and paid the tax balance on April 3, 2009, installments of estimated tax. year.
you do not owe the penalty for the 12-day period • You paid estimated tax payments in un-
from April 4 through April 15. Therefore, you equal amounts. Example. Ben Brown’s 2008 total tax (Form
would figure the amount to enter on line 16 using 1040, line 61) is $7,031, the total of his $4,685
12 days. • You use the annualized income install- income tax and $2,346 self-employment tax. His
ment method to figure your underpayment 2007 AGI was less than $150,000. He does not
Finally, subtract from the maximum penalty for each payment period. owe any other taxes or claim any credits other
amount (line 15) any part you do not owe (line than for withholding. His 2007 tax was $6,116.
16). The result (line 17) is the penalty you owe. • You use your actual withholding during
See Figure 4-B on page 64 to see Ben’s com-
Enter that amount on line 76 of Form 1040 or each payment period to figure your pay-
pleted Form 2210, Part I.
line 48 of Form 1040A. Attach Form 2210 to your ments.
Ben’s employer withheld $3,228 income tax
return only if you checked one of the boxes in during 2008. Ben paid no estimated tax for either
Part II. If you use the regular method, figure your
the first or second period, but he paid $1,000
underpayment for each payment period in Sec-
each on August 29, 2008, and January 12, 2009,
Example. Assume the same facts for Ivy tion A, then figure your penalty for each payment
for the third and fourth periods. Because the
Fields as in the previous example on page 56. period in Section B.
total of his withholding and estimated tax pay-
Ivy paid her estimated tax payments in four ments, $5,228 ($3,228 + $1,000 + $1,000), was
installments of $1,700 ($6,800 ÷ 4) each on the Figuring Your Underpayment less than both 90% of his 2008 tax (90% x
dates it was due. (Part IV, Section A) $7,031 = $6,328), and 100% of his 2007 tax
Ivy qualifies to use the short method to figure ($6,116), Ben knows he owes a penalty for un-
her estimated tax penalty. Using the annualized Figure your underpayment of estimated tax for derpayment of estimated tax. He decides to fig-
income installment method or actual withholding each payment period in Section A following the ure the penalty on Form 2210 and pay it with his
will not give her a smaller penalty amount be- line-by-line instructions. Complete lines 20 $1,803 tax balance ($7,031 − $5,228) when he
cause her income and withholding were distrib- through 26 of the first column before going to files his tax return on April 15, 2009.
uted evenly throughout the year. Therefore, she line 20 of the next column. Ben’s required annual payment (Part I, line
figures her penalty in Part III of Form 2210 (see 9) is $6,116. Because his income and withhold-
Figure 4-A (Continued) on page 63) and leaves Required installments — line 18. Your re- ing were distributed evenly throughout the year,
Part IV (not shown) blank. quired payment for each payment period (line Ben enters one-fourth of his required annual
18) is usually one-fourth of your required annual payment, $1,529, in each column of line 18 (see
Ivy figures her $1,500 total underpayment for Figure 4-B (Continued) on page 65). On line 19,
payment (Part I, line 9). However, if you are
the year (line 14) by subtracting the total of her he enters one-fourth of his withholding, $807, in
using the annualized income installment method
withholding and estimated tax payments the first two columns and $1,807 ($807 plus
(described beginning on this page), first com-
($8,400) from her $9,900 required annual pay- $1,000 estimated tax payment) in the last two
plete Schedule AI (Form 2210), and then enter
ment (line 10). The maximum penalty on her columns.
the amounts from line 25 of that schedule on line
underpayment (line 15) is $54 ($1,500 × Ben has an underpayment (line 25) for each
18 of Form 2210, Part IV.
.03571). payment period even though his withholding and
Ivy plans to file her return and pay her $2,600 Payments. On line 19, enter in each column estimated tax payments for the third and fourth
tax balance on March 16, 2009, 30 days before periods were more than his required install-
the total of:
April 15. Therefore, she does not owe part of the ments (line 18). This is because the estimated
maximum penalty amount. The part she does • Your estimated tax paid after the due date tax payments made in the third and fourth peri-
not owe (line 16) is figured as follows. for the previous column and by the due ods are first applied to underpayments for the
date shown at the top of the column, and earlier periods.
$1,500 × 30 × .00014 = $6 • One-fourth of your withholding.
Ivy subtracts the $6 from the $54 maximum For special rules for figuring your payments, see Annualized Income Installment
penalty and enters the result, $48, on Form the Instructions for Form 2210. Method (Schedule AI)
2210, line 17, and on Form 1040, line 76. She If you file Form 1040, your withholding is the If you did not receive your income evenly
adds $48 to her $2,600 tax balance and enters amount on line 62, plus any excess social secur- throughout the year (for example, your income
the result, $2,648 on line 75 of her Form 1040. ity or tier 1 RRTA tax withholding on line 65. If from a repair shop you operated was much
Ivy files her return on March 16 and attaches a you file Form 1040A, your withholding is the larger in the summer than it was during the rest
check for $2,648. Because Ivy did not check any amount on line 38 plus any excess social secur- of the year), you may be able to lower or elimi-
of the boxes in Part II, she does not attach Form ity or tier 1 RRTA tax withholding included in line nate your penalty by figuring your underpayment
2210 to her tax return. 43. using the annualized income installment

method. Under this method, your required in- April through May . . . . . . . . . . . . . . . $3,600 EIC on Schedule AI, line 16, for each period
stallment (line 18) for one or more payment June through August . . . . . . . . . . . . . 5,000 using her annualized earned income for that
periods may be less than one-fourth of your September through December . . . . . . . 8,000 period. Figure 4-C on page 66 shows her com-
required annual payment. pleted Parts I and II of Schedule AI.
Self-employment tax and deduction.
To figure your underpayment using this
Before Laura can figure her AGI for each period Underpayment. Laura then figures her un-
method, complete Schedule AI of Form 2210
(Schedule AI, line 1), she must figure her deduc- derpayment in Part IV, Section A (see Figure
(see Figure 4-C on page 66 for an example).
tion for self-employment tax for each period. To 4-C (Continued) on page 67). She finds that she
The schedule annualizes your tax at the end of
do this, she first completes Schedule AI, Part II, overpaid her estimated tax for the first three
each payment period based on your income,
(see Figure 4-C on page 66). payment periods, but underpaid her estimated
deductions, and other items relating to events
that occurred from the beginning of the tax year Laura had no self-employment income for tax for the last payment period.
through the end of the period. the first period, so she leaves the lines in that
If you use the annualized income installment column blank. Her self-employment income was Figuring Your Penalty
method, you must check box C in Part II of Form $3,600 for the second period, $8,600 ($3,600 +
$5,000) for the third period, and $16,600
(Part IV, Section B)
2210. You also must attach Form 2210 and
Schedule AI to your return. ($8,600 + $8,000) for the fourth period. She Figure the amount of your penalty in Section B
multiplies each amount by 92.35% (.9235) to following the instructions. The penalty is im-
If you use Schedule AI for any payment find the amounts to enter on line 26. She then
! due date, you must use it for all pay-
ment due dates.
fills out the rest of Part II. See Figure 4-C on
posed on each underpayment shown in Section
A, line 25, for the number of days that it re-
CAUTION
page 66. mained unpaid. (You may find it helpful to show
Laura figures the deduction for one-half of the date of payment beside each amount on line
Completing Schedule AI. Follow the Form the self-employment tax by dividing the amounts 25.)
2210 instructions to complete Schedule AI. For on line 34 by the annualization amounts for each For 2008, there are four rate periods to figure
each period shown on Schedule AI, figure your period. The annualization amounts are: the penalty. Use Rate Period 1 (lines 27 and 28)
income and deductions based on your method to apply the 6% rate in effect from April 16, 2008,
of accounting. If you use the cash method of • 8 for the first period,
through June 30, 2008. Use Rate Period 2 (lines
accounting (used by most people), include all • 4.8 for the second period, 29 and 30) to apply the 5% rate in effect from
income actually or constructively received dur-
ing the period and all deductions actually paid • 3 for the third period, and July 1, 2008, through September 30, 2008. Use
Rate Period 3 (lines 31 and 32) to apply the 6%
during the period. • 2 for the fourth period. rate in effect from October 1, 2008, through
December 31, 2008. Use Rate Period 4 (lines 33
Note. Each period includes amounts from Line 1 — AGI. Laura figures the amounts to and 34) to apply the 5% rate in effect from
the previous period(s). enter on Schedule AI, line 1, as follows. January 1, 2009, through April 15, 2009.
• Period (a) includes items for January 1 Column (a) — 1/1/08 to 3/31/08:
through March 31. $1,250 per month × 3 months . . . . . . . $ 3,750 Aid for counting days. Table 4-1 (see page
• Period (b) includes items for January 1 61) provides a simple method for counting the
Column (b) — 1/1/08 to 5/31/08:
through May 31. number of days between payment dates or be-
$1,250 per month × 5 months . . . . . . . $6,250
Plus: Self-employment income tween a due date and a payment date.
• Period (c) includes items for January 1 through 5/31/08 . . . . . . . . . . 3,600
through August 31. Less: Self-employment tax deduction
1. Find the number for the date the payment
($1,221 ÷ 4.8) . . . . . . . . . . . . was due by going across to the column of
• Period (d) includes items for the entire (254)
the month the payment was due and mov-
year. $9,596
Column (c) — 1/1/08 to 8/31/08: ing down the column to the due date.
$1,250 per month × 8 months . . . . . . . $10,000
Plus: Self-employment income 2. In the same manner, find the number for
Example. Laura Maple files as head of house-
through 8/31/08 . . . . . . . . . . 8,600 the date the payment was made.
hold with two exemptions. Her 2008 total tax
(Form 1040, line 61) is $3,937, the total of her Less: Self-employment tax deduction 3. Subtract the due date “number” from the
($1,822 ÷ 3) . . . . . . . . . . . . . (607)
$1,591 income tax and $2,346 self-employment payment date “number.”
$17,993
tax. Laura also has an earned income credit Column (d) — 1/1/08 to 12/31/08: For example, if a payment was due on June
(EIC) of $571, so the amount she owes is $3,366 $1,250 per month × 12 months . . . . . . $15,000 15 (61), but was not paid until November 4
($3,937 less the $571 EIC). She does not owe Plus: Self-employment income (203), the payment was 142 (203 − 61) days
any other taxes. Her 2007 AGI was less than through 12/31/08 . . . . . . . . . . 16,600
late.
$150,000. Her 2007 tax was $3,530. Her re- Less: Self-employment tax deduction
quired annual payment on Form 2210, Part I, ($2,346 ÷ 2) . . . . . . . . . . . . . (1,173)
line 9, is $3,029 (the smaller of her $3,530 tax for $30,427 Payments. Before completing Section B,
2007 or 90% of her $3,366 tax after credits for make a list of the payments you made after the
2008). Line 4 — Itemized deductions. Laura had due date (or the last day payments could be
Laura’s employer withheld $1,488 income $9,000 in itemized deductions for 2008 — $200 made on time) for the earliest payment period an
tax during 2008. Laura paid no estimated tax for per month withheld for state and local taxes, and underpayment occurred. For example, if you
either the first or second period, but she paid $550 per month for mortgage interest — for a had an underpayment for the first payment pe-
$100 on August 15, 2008, and $500 on Decem- total of $750 each month. She divided them by riod, list your payments after April 15, 2008. You
ber 3, 2008, for the third and fourth periods. period in the following manner. can use the table in the Form 2210 instructions
Laura did not receive her income evenly to make your list. Follow those instructions for
• 1st period: $2,250 ($750 × 3 months). listing income tax withheld and payments made
throughout the year. Therefore, she decides to
figure her required installment for each period • 2nd period: $3,750 ($750 × 5 months). with your return. Use the list to determine when
(Part IV, line 18) using the annualized income each underpayment was paid.
• 3rd period: $6,000 ($750 × 8 months).
installment method. To use this method, Laura
completes Schedule AI before starting Part IV. • 4th period: $9,000 ($750 × 12 months). Underpayment paid in two or more parts. If
Figure 4-C, beginning on page 66, shows an underpayment was paid in two or more parts
She enters each amount on line 4 in the proper
Laura’s filled-in Schedule AI and Part IV. on different dates, you must figure the penalty
column for that period.
Laura’s wages during 2008 were $15,000 separately for each part. You may find it helpful
($1,250 a month). Her net earnings from a busi- Now that Laura has figured her entries for to show the underpayment on Section A, line 25,
ness she started during the year were $16,600, lines 1 and 4, she can complete the rest of broken down into the amounts paid on different
received as follows. Schedule AI to determine the amounts to put on dates. See lines 29 and 30 of Figure 4-B (Con-
Form 2210, Part IV, line 18. Laura figures her tinued) on page 65 for an example of this.

Figuring the penalty. For each underpay- 2008. The $722 remained unpaid 61 days (April Penalty for fourth payment period (Janu-
ment on line 25, columns (a) – (d), figure the 16 through June 15, 2008). Ben enters “61” on ary 15, 2009) — column (d). Ben figures his
penalty by: line 27 and figures this part of the penalty on line fourth period underpayment as follows.
28 ($722 × (61 ÷ 366) × .06 = $7.22). See his
1. Determining the date(s) an underpayment completed Section B in Figure 4-B (Continued) 1. Of the $1,807 he paid for the fourth period,
was paid, on page 65. $1,166 is applied to the underpayment re-
2. Determining the number of days between Penalty for second payment period (June maining from the third period.
the due date and the payment date(s), and 15, 2008) — column (b). Ben figures his sec- 2. That leaves $641 ($1,807 − $1,166) to ap-
3. Multiplying the amount of underpayment ond period underpayment as follows. ply to his fourth period required installment
by the number of days unpaid and the ap- of $1,529.
1. Of the $807 he paid for the second period,
propriate penalty rate.
$722 is applied to the underpayment re- 3. The result, $888 ($1,529 − $641) is Ben’s
If an underpayment remained unpaid for maining from the first period. underpayment for the fourth period.
more than one rate period, the penalty on that
2. That leaves $85 ($807 – $722) to apply to The $888 underpayment was paid April 15,
underpayment will be figured using more than
his second period required installment of 2009, with his tax return. The $888 remained
one rate.
$1,529. unpaid 90 days (January 16 through April 15,
Use lines 27, 29, 31, and 33 to figure the
number of days the underpayment remained 3. The result, $1,444 ($1,529 − $85), is Ben’s 2009). Ben enters that number on line 33 and
unpaid. Use lines 28, 30, 32, and 34 to figure the underpayment for the second period. shows the result of the penalty computation on
actual penalty amount by applying the rate The $1,444 underpayment is paid in two line 34 (see Figure 4-B (Continued) on page 65).
against the underpayment for the number of parts by applying the $1,000 paid on August 29 Total penalty. Ben’s total penalty for 2008
days it remained unpaid. and $444 of his $807 September 15 payment. on line 35 is $56.55, the total of all amounts on
If an underpayment remained unpaid for the To help him figure his penalty, Ben shows the lines 28, 30, 32, and 34 in all columns. Ben
entire period, use Table 4-2 to determine the date of each payment on line 25. enters that amount on line 76 of his Form 1040.
number of days to enter for each period.
All of the underpayment remained unpaid for He also adds $57 to his $1,803 tax balance and
Table 4-2. Chart of Total Days 15 days (June 16 through June 30). $1,000 of enters the $1,860 total on line 75. He files his
the underpayment remained unpaid for 60 addi- return on April 15 and includes a check for
Column Column Column Column tional days (July 1 through August 29) and $444 $1,860. He keeps his completed Form 2210 for
(a) (b) (c) (d)
remained unpaid for 77 additional days (July 1 his records.
line 27 76 15 — — through September 15). Ben enters “15” on line
27, column (b), and “60” and “77” on line 29,
line 29 92 92 15 — column (b). He shows the result of all penalty Example 2. In the previous example for Laura
line 31 92 92 92 — computations on lines 28 and 30 (see Figure 4-B Maple (under Completing Schedule AI on page
(Continued) on page 65). 58), her first underpayment was for the last pay-
line 33 105 105 105 90 ment period. See Laura’s completed Section A
Penalty for third payment period (Septem-
ber 15, 2008) — column (c). Ben figures his in Figure 4-C (Continued) on page 67.
To figure the total penalty, add the amounts third period underpayment as follows. This example illustrates completion of Part
on lines 28, 30, 32, and 34 in all columns. Enter IV, Section B, of Laura’s Form 2210 under the
the total on line 35. 1. Of the $1,807 he paid for the third period,
annualized income installment method.
$1,444 is applied to the underpayment re-
maining from the second period. Laura made the following payments for tax
Example 1. In the previous example for Ben year 2008.
Brown (see Regular Installment Method on page 2. That leaves $363 ($1,807 − $1,444) to ap-
57), he determined that he had an underpay- ply to his third period required installment April 15, 20081 . . . . . . . . . . . . . . $ 372
ment for all four payment periods. See Ben’s of $1,529. June 15, 20081 . . . . . . . . . . . . . . 372
completed Section A in Figure 4-B (Continued) 3. The result, $1,166 ($1,529 − $363), is August 15, 20082 . . . . . . . . . . . . . 100
on page 65. Ben’s underpayment for the third period. September 15, 20081 . . . . . . . . . . 372
Ben’s 2008 tax is $7,031. His minimum re- December 3, 20082 . . . . . . . . . . . 500
The $1,166 underpayment is paid in two
quired payment for each period is $1,529 January 15, 20091 . . . . . . . . . . . . 372
parts by applying his $1,000 payment on Janu-
($6,116 ÷ 4). His $3,228 withholding is consid-
ary 12, 2009, and $166 of his $807 payment on 1 One-fourth of withholding
ered paid in four equal installments of $807, one 2 Estimated tax payment
January 15. On line 25, Ben shows the date of
on each payment due date. Therefore, he must
each payment.
make estimated tax payments of $722 ($1,529 − Penalty for fourth payment period — col-
$807) each period. However, Ben made only For Rate Period 2, the entire underpayment umn (d). Laura’s $940 underpayment for the
two estimated tax payments — $1,000 on Au- ($1,166) remained unpaid 15 days (September
gust 29, 2008, and $1,000 on January 12, 2009. fourth payment period was paid on April 15,
16 through September 30). Ben enters “15” on
He plans to file his return and pay his balance 2009, with her tax return. The entire amount
line 29. He shows the result of the penalty com-
due on April 15, 2009. He is considered to have putation on line 30 (see Figure 4-B (Continued) remained unpaid 90 days (January 16 through
made the following payments for tax year 2008. on page 65). April 15, 2009). Laura enters that number on line
33. She shows the result of the penalty compu-
April 15, 20081 . . . . . . . . . . . . . . $ 807 For Rate Period 3, the entire underpayment tation on line 34 (see Figure 4-C (Continued) on
June 15, 20081 . . . . . . . . . . . . . . 807 ($1,166) remained unpaid 92 days (October 1 page 67).
August 29, 20082 . . . . . . . . . . . . . 1,000 through December 31). Ben enters “92” on line
September 15, 20081 . . . . . . . . . . 807 31. He shows the result of the penalty computa- Total penalty. Laura’s total penalty for 2008
January 12, 20092 . . . . . . . . . . . . 1,000 tion on line 32 (see Figure 4-B (Continued) on on line 35 is $11.59, the amount on line 34.
January 15, 20091 . . . . . . . . . . . . 807 page 65). Laura enters that amount on line 76 of her Form
1040. She also adds $12 to her $1,278 tax
1 One-fourth of withholding For Rate Period 4, $1,000 of the underpay-
balance and enters the $1,290 total on line 75.
2 Estimated tax payment ment remained unpaid for 12 days (January 1
through January 12) and $166 remained unpaid She files her return on April 15 and includes a
Penalty for first payment period (April 15, for 15 days (January 1 through January 15). Ben check for $1,290. Because she used the annual-
2008) — column (a). Ben’s $722 underpay- enters “12” and “15” on line 33. He shows the ized income installment method, she must at-
ment for the first payment period was paid by result of both penalty computations on line 34 tach Form 2210, including Schedule AI, to her
applying $722 of his $807 payment on June 15, (see Figure 4-B (Continued) on page 65). return and check box C in Part II.

2. You retired (after reaching age 62) or be- 1. Check box 1a in Part I.
Farmers and came disabled in 2007 or 2008 and both
the following requirements are met.
2. Complete line 2 through line 20 without
Fishermen a. You had a reasonable cause for not
regard to the waiver.
3. Enter the amount you want waived in pa-
If you are a farmer or fisherman, the following making the payment. rentheses on the dotted line next to line
special rules for underpayment of estimated tax b. Your underpayment was not due to will- 21.
apply to you. ful neglect. 4. Subtract this amount from the total penalty
1. The penalty for underpaying your 2008 es- you figured without regard to the waiver.
timated tax will not apply if you file your How to request a waiver. To request a Enter the result on line 21.
return and pay all the tax due by March 2, waiver, complete Form 2210 as follows. 5. Attach Form 2210-F and a statement to
2009. If you are a fiscal year taxpayer, the your return explaining the reasons you
1. Check box A or B in Part II.
penalty will not apply if you file your return were unable to meet the estimated tax re-
and pay the tax due by the first day of the 2. If you checked box A, complete only page quirements.
third month after the end of your tax year. 1 of Form 2210.
6. If you are requesting a penalty waiver due
2. Any penalty you owe for underpaying your 3. If you checked box B: to retirement or disability, attach documen-
2008 estimated tax will be figured from one tation that shows your retirement date (and
payment due date, January 15, 2009. a. Complete line 1 through line 16 (or lines your age on that date) or the date you
1 through 9 and 18 through 34 if you became disabled.
3. The underpayment penalty for 2008 is fig- use the regular method) without regard
ured on the difference between the amount to the waiver. 7. If you are requesting a penalty waiver due
of 2008 withholding plus estimated tax to a casualty, disaster, or other unusual
paid by the due date and the smaller of: b. Enter the amount you want waived in circumstance, attach documentation such
parentheses on the dotted line next to as police and insurance company reports.
a. 662/3% (rather than 90%) of your 2008 line 17 (line 35 for the regular method).
tax, or The IRS will review the information you pro-
c. Subtract this amount from the total pen- vide and will decide whether or not to grant your
b. 100% of the tax shown on your 2007 alty you figured without regard to the request for a waiver.
return. waiver. Enter the result on line 17 (line
35 for the regular method). Federally declared disaster. Certain esti-
Even if these special rules apply to you, you mated tax payment deadlines for taxpayers who
will not owe the penalty if you meet either of 4. Attach Form 2210 and a statement to your reside or have a business in a federally declared
the two conditions discussed on page 55 under return explaining the reasons you were un- disaster area are postponed for a period during
Exceptions. able to meet the estimated tax require- and after the disaster. During the processing of
See Who Must Pay Estimated Tax in chapter ments and the time period for which you your tax return, the IRS automatically identifies
2 for the definition of a farmer or fisherman who are requesting a waiver. taxpayers located in a covered disaster area (by
is eligible for these special rules. county or parish) and applies the appropriate
5. If you are requesting a penalty waiver due penalty relief. Do not file Form 2210 if your
Form 2210-F. Use Form 2210-F to figure any to retirement or disability, attach documen- underpayment was due to a federally declared
underpayment penalty. Do not attach it to your tation that shows your retirement date (and disaster. If you still owe a penalty after the auto-
return unless you check box 1a or box 1b. How- your age on that date) or the date you matic waiver is applied, we will send you a bill.
ever, if neither box applies to you and you owe a became disabled. Individuals, estates, and trusts not in a cov-
penalty, you do not need to complete Form ered disaster area but whose books, records, or
2210-F. The IRS can figure your penalty and 6. If you are requesting a penalty waiver due
to a casualty, disaster, or other unusual tax professionals’ offices are in a covered area
send you a bill. are also entitled to relief. Also eligible are relief
circumstance, attach documentation such
as police and insurance company reports. workers affiliated with a recognized government
See later on this page for special proce- or charitable organization assisting in the relief
activities in a covered disaster area. If you meet
Waiver of Penalty dures that apply for federally declared di-
sasters. either of these eligibility requirements, you must
call the IRS disaster hotline at 1-866-562-5227
The IRS can waive the penalty for underpay- The IRS will review the information you pro- and identify yourself as eligible for this relief.
ment if either of the following applies. vide and will decide whether or not to grant your Details on the applicable disaster postpone-
request for a waiver. ment period can be found at http://www.irs.gov/
1. You did not make a payment because of a
Farmers and fishermen. To request a individuals/index.html. Select Tax Relief in Dis-
casualty, disaster, or other unusual circum-
waiver, you must complete Form 2210-F as fol- aster Situations and then the federally declared
stance and it would be inequitable to im-
lows. disaster that affected you.
pose the penalty.

Table 4-1. Calendar To Determine the Number of Days a Payment Is Late

Instructions. Use this table with Form 2210 if you are completing Part IV, Section B. First, find the number for the payment
due date by going across to the column of the month the payment was due and moving down the column to the due date.
Then, in the same manner, find the number for the date the payment was made. Finally, subtract the due date number from
the payment date number. The result is the number of days the payment is late.
Example. The payment due date is June 15 (61). The payment was made on November 4 (203). The payment is 142 days
late (203 − 61).
Tax Year 2008

Day of 2008 2008 2008 2008 2008 2008 2008 2008 2008 2009 2009 2009 2009
Month April May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr.
1 16 47 77 108 139 169 200 230 261 292 320 351
2 17 48 78 109 140 170 201 231 262 293 321 352
3 18 49 79 110 141 171 202 232 263 294 322 353
4 19 50 80 111 142 172 203 233 264 295 323 354
5 20 51 81 112 143 173 204 234 265 296 324 355
6 21 52 82 113 144 174 205 235 266 297 325 356

7 22 53 83 114 145 175 206 236 267 298 326 357
8 23 54 84 115 146 176 207 237 268 299 327 358
9 24 55 85 116 147 177 208 238 269 300 328 359
10 25 56 86 117 148 178 209 239 270 301 329 360
11 26 57 87 118 149 179 210 240 271 302 330 361

12 27 58 88 119 150 180 211 241 272 303 331 362
13 28 59 89 120 151 181 212 242 273 304 332 363
14 29 60 90 121 152 182 213 243 274 305 333 364
15 0 30 61 91 122 153 183 214 244 275 306 334 365
16 1 31 62 92 123 154 184 215 245 276 307 335

17 2 32 63 93 124 155 185 216 246 277 308 336
18 3 33 64 94 125 156 186 217 247 278 309 337
19 4 34 65 95 126 157 187 218 248 279 310 338
20 5 35 66 96 127 158 188 219 249 280 311 339
21 6 36 67 97 128 159 189 220 250 281 312 340

22 7 37 68 98 129 160 190 221 251 282 313 341
23 8 38 69 99 130 161 191 222 252 283 314 342
24 9 39 70 100 131 162 192 223 253 284 315 343
25 10 40 71 101 132 163 193 224 254 285 316 344
26 11 41 72 102 133 164 194 225 255 286 317 345

27 12 42 73 103 134 165 195 226 256 287 318 346
28 13 43 74 104 135 166 196 227 257 288 319 347
29 14 44 75 105 136 167 197 228 258 289 348
30 15 45 76 106 137 168 198 229 259 290 349
31 46 107 138 199 260 291 350

Figure 4-A. Form 2210—Illustrated (Ivy Fields)

Underpayment of
2210
OMB No. 1545-0140
Form
Estimated Tax by Individuals, Estates, and Trusts 2008
䊳
See separate instructions.
Department of the Treasury Attachment
Internal Revenue Service 䊳 Attach to Form 1040, 1040A, 1040NR, 1040NR-EZ, or 1041. Sequence No. 06
Name(s) shown on tax return Identifying number
Ivy Fields 222-00-2222
Do You Have To File Form 2210?

Yes
Complete lines 1 through 7 below. Is line 7 less than $1,000? 䊳 Do not file Form 2210. You do not owe a penalty.
No
䊲
Yes You do not owe a penalty. Do not file Form 2210
Complete lines 8 and 9 below. Is line 6 equal to or more 䊳 (but if box E in Part II applies, you must file page 1
than line 9? of Form 2210).
No
䊲
Yes You must file Form 2210. Does box B, C, or
You may owe a penalty. Does any box in Part II below apply? 䊳 D in Part II apply?
No Yes
No 䊳 You must figure your penalty.
䊳
䊲
Do not file Form 2210. You are not required to figure You are not required to figure your penalty because
your penalty because the IRS will figure it and send the IRS will figure it and send you a bill for any unpaid
you a bill for any unpaid amount. If you want to figure amount. If you want to figure it, you may use Part III
it, you may use Part III or Part IV as a worksheet and or Part IV as a worksheet and enter your penalty
enter your penalty amount on your tax return, but do amount on your tax return, but file only page 1 of
not file Form 2210. Form 2210.
Part I Required Annual Payment

1 Enter your 2008 tax after credits from Form 1040, line 56 (see instructions if not filing Form 1040) 1 11,000
2 Other taxes, including self-employment tax (see page 2 of the instructions) 2
3 Refundable credits. Enter the total of your earned income credit, additional child tax credit, credit
for federal tax paid on fuels, health coverage tax credit, refundable credit for prior year minimum
tax, first-time homebuyer credit, and recovery rebate credit 3 ( )
4 Current year tax. Combine lines 1, 2, and 3. If less than $1,000, you do not owe a penalty;
do not file Form 2210 4 11,000
5 Multiply line 4 by 90% (.90) 5 9,900
6 Withholding taxes. Do not include estimated tax payments. (see page 2 of the instructions) 6 1,600
7 Subtract line 6 from line 4. If less than $1,000, you do not owe a penalty; do not file Form 2210 7 9,400
8 Maximum required annual payment based on prior year’s tax (see page 2 of the instructions) 8 10,000
9 Required annual payment. Enter the smaller of line 5 or line 8 9 9,900
Next: Is line 9 more than line 6?
No. You do not owe a penalty. Do not file Form 2210 unless box E below applies.
X Yes. You may owe a penalty, but do not file Form 2210 unless one or more boxes in Part II below applies.
● If box B, C, or D applies, you must figure your penalty and file Form 2210.
● If only box A or E (or both) applies, file only page 1 of Form 2210. You are not required to figure your penalty; the IRS
will figure it and send you a bill for any unpaid amount. If you want to figure your penalty, you may use Part III or IV as
a worksheet and enter your penalty on your tax return, but file only page 1 of Form 2210.
Part II Reasons for Filing. Check applicable boxes. If none apply, do not file Form 2210.
A You request a waiver (see page 2 of the instructions) of your entire penalty. You must check this box and file page 1
of Form 2210, but you are not required to figure your penalty.
B You request a waiver (see page 2 of the instructions) of part of your penalty. You must figure your penalty and waiver
amount and file Form 2210.
C Your income varied during the year and your penalty is reduced or eliminated when figured using the annualized
income installment method. You must figure the penalty using Schedule Al and file Form 2210.
D Your penalty is lower when figured by treating the federal income tax withheld from your income as paid on the
dates it was actually withheld, instead of in equal amounts on the payment due dates. You must figure your penalty
and file Form 2210.
E You filed or are filing a joint return for either 2007 or 2008, but not for both years, and line 8 above is smaller than
line 5 above. You must file page 1 of Form 2210, but you are not required to figure your penalty (unless box B,
C, or D applies).
For Paperwork Reduction Act Notice, see page 6 of separate instructions. Cat. No. 11744P Form 2210 (2008)

Figure 4-A. Form 2210—Illustrated (Ivy Fields) (Continued)
Form 2210 (2008) Page 2

Part III Short Method
Can You Use You may use the short method if:
the Short Method? ● You made no estimated tax payments (or your only payments were
withheld federal income tax), or
● You paid the same amount of estimated tax on each of the four
payment due dates.
Must You Use You must use the regular method (Part IV) instead of the short method if:
the Regular Method? ● You made any estimated tax payments late,
● You checked box C or D in Part II, or
● You are filing Form 1040NR or 1040NR-EZ and you did not receive
wages as an employee subject to U.S. income tax withholding.
Note: If any payment was made earlier than the due date, you may use the short method, but using it may cause
you to pay a larger penalty than the regular method. If the payment was only a few days early, the difference is
likely to be small.
10 Enter the amount from Form 2210, line 9 10 9,900
11 Enter the amount, if any, from Form 2210, line 6 11 1,600
12 Enter the total amount, if any, of estimated tax payments you made 12 6,800
13 Add lines 11 and 12 13 8,400

14 Total underpayment for year. Subtract line 13 from line 10. If zero or less, stop here; you do
not owe the penalty. Do not file Form 2210 unless you checked box E in Part II 14 1,500
15 Multiply line 14 by .03571 15 54
16 ● If the amount on line 14 was paid on or after 4/15/09, enter -0-.

● If the amount on line 14 was paid before 4/15/09, make the following computation to find the
amount to enter on line 16.
Amount on Number of days paid
line 14 ⫻ before 4/15/09 ⫻ .00014 16 6
17 Penalty. Subtract line 16 from line 15. Enter the result here and on Form 1040, line 76; Form
1040A, line 48; Form 1040NR, line 74; Form 1040NR-EZ, line 26; or Form 1041, line 26. Do not
file Form 2210 unless you checked a box in Part II 䊳 17 48
Form 2210 (2008)

Figure 4-B. Regular Installment Method—Illustrated (Ben Brown)

Underpayment of
2210
OMB No. 1545-0140
Form
Estimated Tax by Individuals, Estates, and Trusts 2008
䊳 See separate instructions.
Department of the Treasury Attachment
Internal Revenue Service 䊳 Attach to Form 1040, 1040A, 1040NR, 1040NR-EZ, or 1041. Sequence No. 06
Name(s) shown on tax return Identifying number
Ben Brown 333 - 00 - 3333
Do You Have To File Form 2210?

Yes
Complete lines 1 through 7 below. Is line 7 less than $1,000? 䊳 Do not file Form 2210. You do not owe a penalty.
No
䊲
Yes You do not owe a penalty. Do not file Form 2210
Complete lines 8 and 9 below. Is line 6 equal to or more 䊳 (but if box E in Part II applies, you must file page 1
than line 9? of Form 2210).
No
䊲
Yes You must file Form 2210. Does box B, C, or
You may owe a penalty. Does any box in Part II below apply? 䊳 D in Part II apply?
No Yes
No 䊳 You must figure your penalty.
䊳
䊲
Do not file Form 2210. You are not required to figure You are not required to figure your penalty because
your penalty because the IRS will figure it and send the IRS will figure it and send you a bill for any unpaid
you a bill for any unpaid amount. If you want to figure amount. If you want to figure it, you may use Part III
it, you may use Part III or Part IV as a worksheet and or Part IV as a worksheet and enter your penalty
enter your penalty amount on your tax return, but do amount on your tax return, but file only page 1 of
not file Form 2210. Form 2210.
Part I Required Annual Payment

1 Enter your 2008 tax after credits from Form 1040, line 56 (see instructions if not filing Form 1040) 1 4,685
2 Other taxes, including self-employment tax (see page 2 of the instructions) 2 2,346
3 Refundable credits. Enter the total of your earned income credit, additional child tax credit, credit
for federal tax paid on fuels, health coverage tax credit, refundable credit for prior year minimum
tax, first-time homebuyer credit, and recovery rebate credit 3 ( )
4 Current year tax. Combine lines 1, 2, and 3. If less than $1,000, you do not owe a penalty;
do not file Form 2210 4 7,031
5 Multiply line 4 by 90% (.90) 5 6,328
6 Withholding taxes. Do not include estimated tax payments. (see page 2 of the instructions) 6 3,228
7 Subtract line 6 from line 4. If less than $1,000, you do not owe a penalty; do not file Form 2210 7 3,803
8 Maximum required annual payment based on prior year’s tax (see page 2 of the instructions) 8 6,116
9 Required annual payment. Enter the smaller of line 5 or line 8 9 6,116
Next: Is line 9 more than line 6?
No. You do not owe a penalty. Do not file Form 2210 unless box E below applies.
X Yes. You may owe a penalty, but do not file Form 2210 unless one or more boxes in Part II below applies.
● If box B, C, or D applies, you must figure your penalty and file Form 2210.
● If only box A or E (or both) applies, file only page 1 of Form 2210. You are not required to figure your penalty; the IRS
will figure it and send you a bill for any unpaid amount. If you want to figure your penalty, you may use Part III or IV as
a worksheet and enter your penalty on your tax return, but file only page 1 of Form 2210.
Part II Reasons for Filing. Check applicable boxes. If none apply, do not file Form 2210.
A You request a waiver (see page 2 of the instructions) of your entire penalty. You must check this box and file page 1
of Form 2210, but you are not required to figure your penalty.
B You request a waiver (see page 2 of the instructions) of part of your penalty. You must figure your penalty and waiver
amount and file Form 2210.
C Your income varied during the year and your penalty is reduced or eliminated when figured using the annualized
income installment method. You must figure the penalty using Schedule Al and file Form 2210.
D Your penalty is lower when figured by treating the federal income tax withheld from your income as paid on the
dates it was actually withheld, instead of in equal amounts on the payment due dates. You must figure your penalty
and file Form 2210.
E You filed or are filing a joint return for either 2007 or 2008, but not for both years, and line 8 above is smaller than
line 5 above. You must file page 1 of Form 2210, but you are not required to figure your penalty (unless box B,
C, or D applies).
For Paperwork Reduction Act Notice, see page 6 of separate instructions. Cat. No. 11744P Form 2210 (2008)

Figure 4-B. Regular Installment Method—Illustrated (Ben Brown) (Continued)

Form 2210 (2008) Page 3
Part IV Regular Method (See page 3 of the instructions if you are filing Form 1040NR or 1040NR-EZ.)
Payment Due Dates
Section A—Figure Your Underpayment (a) (b) (c) (d)
4/15/08 6/15/08 9/15/08 1/15/09
18 Required installments. If box C in Part II applies, enter

the amounts from Schedule AI, line 25. Otherwise, enter
25% (.25) of line 9, Form 2210, in each column 18 1,529 1,529 1,529 1,529
19 Estimated tax paid and tax withheld (see page 3 of 8/29 +1,000 1/12 +1,000
the instructions). For column (a) only, also enter the 9/15 807 1/15 807
amount from line 19 on line 23. If line 19 is equal to
or more than line 18 for all payment periods, stop
here; you do not owe a penalty. Do not file Form
2210 unless you checked a box in Part II 19 807 807 1,807 1,807
Complete lines 20 through 26 of one column
before going to line 20 of the next column.
20 Enter the amount, if any, from line 26 in the previous
column 20
21 Add lines 19 and 20 21 807 1,807 1,807
22 Add the amounts on lines 24 and 25 in the previous column 22 722 1,444 1,166
23 Subtract line 22 from line 21. If zero or less, enter -0-.
For column (a) only, enter the amount from line 19 23 807 85 363 641
24 If line 23 is zero, subtract line 21 from line 22. 0 0
Otherwise, enter -0- 24
25 Underpayment. If line 18 is equal to or more than 6/15 8/29 1,000 1/12 1,000 4/15 888
9/15 444 1/15 166
line 23, subtract line 23 from line 18. Then go to line
20 of the next column. Otherwise, go to line 26 䊳 25 722 1,444 1,166 888
26 Overpayment. If line 23 is more than line 18, subtract line
18 from line 23. Then go to line 20 of the next column 26
Section B—Figure the Penalty (Complete lines 27 through 34 of one column before going to the next column.)
April 16, 2008—June 30, 2008 4/15/08 6/15/08
Rate Period 1
Days: Days:
27 Number of days from the date shown above
line 27 to the date the amount on line 25 was paid
27 61 15 107
or 6/30/08, whichever is earlier
28 Underpayment on line 25 Number of
(see page 4 of days on line 27
⫻ ⫻ .06
the instructions) 366 䊳 28 $ 7.22 $ 3.55 27.35
July 1, 2008—September 30, 2008 6/30/08 6/30/08 9/15/08
Rate Period 2
Days: Days: Days:

29 Number of days from the date shown above 8/29
line 29 to the date the amount on line 25 was paid 60 9/15
or 9/30/08, whichever is earlier 29 77 15 91
30 Underpayment on line 25 Number of $8.20
⫻ ⫻ .05
the instructions) 366 䊳 30 $ $ $4.67 $ 2.39 15.46
October 1, 2008—December 31, 2008 9/30/08 9/30/08 9/30/08
Rate Period 3
Days: Days: Days:

80.87
or 12/31/08, whichever is earlier 31 92
⫻ ⫻ .06
the instructions) 366 䊳 32 $ $ $ 17.59
January 1, 2009—April 15, 2009 12/31/08 12/31/08 12/31/08 1/15/09
Rate Period 4
Days: Days: Days: Days:

33 Number of days from the date shown above line 1/12
33 to the date the amount on line 25 was paid 1/15
12 90
33 15
or 4/15/09, whichever is earlier
34 Underpayment on line 25 Number of $1.64
⫻ ⫻ .05
the instructions) 365 䊳 34 $ $ $ .34 $ 10.95
35 Penalty. Add all amounts on lines 28, 30, 32, and 34 in all columns. Enter the total here and on Form
1040, line 76; Form 1040A, line 48; Form 1040NR, line 74; Form 1040NR-EZ, line 26; or Form 1041,
line 26. Do not file Form 2210 unless you checked a box in Part II 䊳 35 $ 56.55
Form 2210 (2008)

Figure 4-C. Annualized Income Installment Method—Illustrated (Laura Maple)

Form 2210 (2008) Page 4
Schedule AI—Annualized Income Installment Method (See pages 5 and 6 of the instructions.)
Estates and trusts, do not use the period ending dates
(a) (b) (c) (d)
shown to the right. Instead, use the following: 2/29/08, 1/1/08–3/31/08 1/1/08–5/31/08 1/1/08–8/31/08 1/1/08–12/31/08
4/30/08, 7/31/08, and 11/30/08.
Part I Annualized Income Installments
1 Enter your adjusted gross income for each period (see

instructions). (Estates and trusts, enter your taxable income
without your exemption for each period) 1 3,750 9,596 17,993 30,427
3 Annualized income. Multiply line 1 by line 2 3 15,000 23,030 26,990 30,427
4 If you itemize, enter itemized deductions for the period shown in

each column. All others enter -0-, and skip to line 7. Exception:
Estates and trusts, skip to line 9 and enter amount from line 3 4 2,250 3,750 6,000 9,000
6 Multiply line 4 by line 5 (see instructions if line 3 is more than
$79,975) 6 9,000 9,000 9,000 9,000
7 In each column, enter the full amount of your standard deduction
from Form 1040, line 40, or Form 1040A, line 24 (Form 1040NR
or 1040NR-EZ filers, enter -0-. Exception: Indian students and
business apprentices, see instructions.) 7 8,000 8,000 8,000 8,000
8 Enter the larger of line 6 or line 7 8 9,000 9,000 9,000 9,000
9 Subtract line 8 from line 3 9 6,000 14,030 17,990 21,427
10 In each column, multiply $3,500 by the total number of
exemptions claimed (see instructions if line 3 is more than
$119,975). (Estates, trusts, and Form 1040NR or 1040NR-EZ
filers, (see instructions) 10 7,000 7,000 7,000 7,000
11 Subtract line 10 from line 9. If zero or less, enter -0- 11 0 7,030 10,990 14,427
12 Figure your tax on the amount on line 11 (see instructions) 12 703 1,098 1,591
13 Self-employment tax from line 34 (complete Part II below) 13 1,221 1,822 2,346
15 Total tax. Add lines 12, 13, and 14 15 0 1,924 2,920 3,937
16 For each period, enter the same type of credits as allowed on
Form 2210, Part I, lines 1 and 3 (see instructions) 16 2,917 1,753 1,122 571
17 Subtract line 16 from line 15. If zero or less, enter -0- 17 0 171 1,798 3,366
19 Multiply line 17 by line 18 19 0 77 1,214 3,029
Complete lines 20–25 of one column before going to line 20
of the next column.
20 Enter the total of the amounts in all previous columns of line 25 20 0 77 1,214
21 Subtract line 20 from line 19. If zero or less, enter -0- 21 0 77 1,137 1,815
22 Enter 25% (.25) of line 9 on page 1 of Form 2210 in each column 22 757 757 757 757
column 23 757 1,437 1,057
24 Add lines 22 and 23 24 757 1,514 2,194 1,814
25 Enter the smaller of line 21 or line 24 here and on
Form 2210, line 18 䊳 25 0 77 1,137 1,814
Part II Annualized Self-Employment Tax (Form 1040 filers only)
26 Net earnings from self-employment for the period (see
instructions) 26 3,325 7,942 15,330
28 Enter actual wages for the period subject to social security tax or
the 6.2% portion of the 7.65% railroad retirement (tier 1) tax 28 6,250 10,000 15,000
29 Subtract line 28 from line 27. If zero or less, enter -0- 29 36,250 58,000 87,000
31 Multiply line 30 by the smaller of line 26 or line 29 31 990 1,477 1,901
33 Multiply line 26 by line 32 33 231 345 445
34 Add lines 31 and 33. Enter here and on line 13 above 䊳 34 1,221 1,822 2,346
Form 2210 (2008)

Figure 4-C. Annualized Income Installment Method—Illustrated (Laura Maple) (Continued)

Form 2210 (2008) Page 3
Part IV Regular Method (See page 3 of the instructions if you are filing Form 1040NR or 1040NR-EZ.)
Payment Due Dates
Section A—Figure Your Underpayment (a) (b) (c) (d)
4/15/08 6/15/08 9/15/08 1/15/09
18 Required installments. If box C in Part II applies, enter

the amounts from Schedule AI, line 25. Otherwise, enter
25% (.25) of line 9, Form 2210, in each column 18 0 77 1,137 1,814
19 Estimated tax paid and tax withheld (see page 3 of
8/15 100 12/3 500
the instructions). For column (a) only, also enter the
9/15 372 1/15 372
amount from line 19 on line 23. If line 19 is equal to
or more than line 18 for all payment periods, stop
here; you do not owe a penalty. Do not file Form
2210 unless you checked a box in Part II 19 372 372 472 872
Complete lines 20 through 26 of one column
before going to line 20 of the next column.
20 Enter the amount, if any, from line 26 in the previous
column 20 372 667 2
21 Add lines 19 and 20 21 744 1,139 874
22 Add the amounts on lines 24 and 25 in the previous column 22 0 0 0
23 Subtract line 22 from line 21. If zero or less, enter -0-.
For column (a) only, enter the amount from line 19 23 372 744 1,139 874
24 If line 23 is zero, subtract line 21 from line 22.
Otherwise, enter -0- 24 0 0
25 Underpayment. If line 18 is equal to or more than
line 23, subtract line 23 from line 18. Then go to line
20 of the next column. Otherwise, go to line 26 䊳 25 940
26 Overpayment. If line 23 is more than line 18, subtract line
18 from line 23. Then go to line 20 of the next column 26 372 667 2
Section B—Figure the Penalty (Complete lines 27 through 34 of one column before going to the next column.)
April 16, 2008—June 30, 2008 4/15/08 6/15/08
Rate Period 1
Days: Days:
⫻ ⫻ .06
the instructions) 366 䊳 28 $ $ 1.45
July 1, 2008—September 30, 2008 6/30/08 6/30/08 9/15/08
Rate Period 2
Days: Days: Days:

⫻ ⫻ .05
the instructions) 366 䊳 30 $ $ $ 18.73
October 1, 2008—December 31, 2008 9/30/08 9/30/08 9/30/08
Rate Period 3
Days: Days: Days:

line 31 to the date the amount on line 25 was paid 20.18
or 12/31/08, whichever is earlier 31
⫻ ⫻ .06
the instructions) 366 䊳 32 $ $ $
January 1, 2009—April 15, 2009 12/31/08 12/31/08 12/31/08 1/15/09
Rate Period 4
Days: Days: Days: Days:

33 Number of days from the date shown above line
33 to the date the amount on line 25 was paid
⫻ ⫻ .05 11.59
the instructions) 365 䊳 34 $ $ $ $
35 Penalty. Add all amounts on lines 28, 30, 32, and 34 in all columns. Enter the total here and on Form
1040, line 76; Form 1040A, line 48; Form 1040NR, line 74; Form 1040NR-EZ, line 26; or Form 1041,
line 26. Do not file Form 2210 unless you checked a box in Part II 䊳 35 $ 11.59
Form 2210 (2008)

Worksheet 4-1. 2008 Form 2210, Schedule AI—Line 12

Note. To figure the annualized entries for lines 2, 3, and 5 below, multiply the expected amount for the period by the
annualization amount for the same period.
1. Enter line 11 of your Schedule AI, or line 3 from Worksheet 4-2 . . . . . . . . . . 1.

2. Enter your annualized qualified dividends for the
period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
3. Are you filing Schedule D?
}
M Yes. Enter the smaller of your annualized
amount from line 15 or line 16 of Schedule D.
If either line 15 or line 16 is a loss, enter -0-. 3.
M No. Enter your annualized capital gain or
(loss) from Form 1040, line 13
4. Add lines 2 and 3 . . . . . . . . . . . . . . . . . . . . 4.
5. If you are claiming investment interest
expense on Form 4952, enter your
annualized amount from line 4g of that form.
Otherwise, enter -0- . . . . . . . . . . . . . . . . . . . 5.
6. Subtract line 5 from line 4. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . 6.
7. Subtract line 6 from line 1. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . 7.
8. Enter the smaller of:
• The amount on line 1, or
• $32,550 if single or married filing separately,
$65,100 if married filing jointly or qualifying widow(er),
$43,650 if head of household . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.
9. Is the amount on line 7 equal to or more than the amount on line 8?
M Yes. Skip lines 9 and 10; go to line 11 and check the “No” box.
M No. Enter the amount from line 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.
10. Subtract line 9 from line 8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.
11. Are the amounts on lines 6 and 10 the same?
M Yes. Skip lines 11 through 14; go to line 15.
M No. Enter the smaller of line 1 or line 6 . . . . . . . . . . . . . . . . . . . . . . . . 11.
12. Enter the amount from line 10 (if line 10 is blank, enter -0-) . . . . . . . . . . . . . 12.
13. Subtract line 12 from line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.
14. Multiply line 13 by 15% (.15) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.
15. Figure the tax on the amount on line 7. Use the Tax Table or Tax Computation Worksheet in the 2008
Form 1040 instructions, whichever applies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.
16. Add lines 14 and 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.
17. Figure the tax on the amount on line 1. Use the Tax Table or Tax Computation Worksheet in the 2008
Form 1040 instructions, whichever applies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.
18. Tax on all taxable income. Enter the smaller of line 16 or line 17. Enter this amount on line 12 of
Schedule AI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.

Worksheet 4-2. 2008 Form 2210, Schedule AI—Line 12

Before you begin: If Schedule AI, line 11, is zero for the period, do not complete this worksheet.
1. Enter the amount from line 11 of Schedule AI for the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
2. Enter the annualized amount* of foreign earned income and housing amount excluded or deducted (from Form
2555, lines 45 and 50, or Form 2555-EZ, line 18) in figuring the amount entered for the period on line 1 of
Schedule AI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
3. Add lines 1 and 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
4. Tax on the amount on line 3. Use the Tax Table, Tax Computation Worksheet, Form 8615,** Qualified
Dividends and Capital Gain Worksheet,*** or Schedule D Tax Worksheet,*** whichever applies. See the 2008
Instructions for Form 1040, line 44, to find out which tax computation method to use. (Note. You do not have to
use the same method for each period on Schedule AI.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5. Tax on the amount on line 2. Use the Tax Table or Tax Computation Worksheet, whichever applies, from the
2008 Form 1040 instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.
6. Subtract line 5 from line 4. Enter the result here and on line 12 of Schedule AI. If zero or less,
enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.
* To figure the annualized amount for line 2, multiply the exclusion for the period by the annualization amount on line
2 of Schedule AI for the same period.
** If you use Form 8615 to figure the tax on line 4 above, enter the amount from line 3 above on line 4 of Form 8615.
If the child’s parent files Form 2555 or 2555-EZ, enter the amounts from lines 3 and 4 of the parent’s Foreign
Earned Income Tax Worksheet on lines 6 and 10, respectively, of Form 8615. Complete the rest of Form 8615
according to its instructions. Then complete lines 5 and 6 above.
*** Enter the amount from line 3 above on line 1 of the Qualified Dividends and Capital Gain Tax Worksheet (or
Worksheet 4-1 in this chapter) or the Schedule D Tax Worksheet, whichever worksheet you use to figure the tax on
line 4 above. Complete that worksheet through line 6 (line 10 if you use the Schedule D Tax Worksheet). 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 Schedule AI from line 6 of Worksheet 4-1 or your Qualified Dividends and Capital Gain Tax Worksheet (line 10
of your Schedule D Tax Worksheet). 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 4-1, Qualified
Dividends and Capital Gain Tax Worksheet, or the Schedule D Tax Worksheet according to the worksheet’s
instructions. Then complete lines 5 and 6 above.
Capital gain excess. If you have a capital gain excess, complete a second Worksheet 4-1, Qualified Dividends and
Capital Gain Tax Worksheet, or Schedule D Tax Worksheet (whichever applies) as instructed above but in its
entirety and with the following additional modifications. Then complete lines 5 and 6 above.
a. Reduce (but not below zero) the amount you otherwise would enter on line 3 of your Worksheet 4-1, line 3 of your
Qualified Dividends and Capital Gain Tax Worksheet, or line 7 of your Schedule D Tax Worksheet by your capital
gain excess.
b. Reduce (but not below zero) the amount you otherwise would enter on line 2 of your Worksheet 4-1, Qualified
Dividends and Capital Gain Tax Worksheet, or Schedule D Tax Worksheet by any of your capital gain excess not
used in (a) above.
c. Reduce (but not below zero) the amount on your Schedule D (Form 1040), line 18, by your capital gain excess.
d. Include your capital gain excess as a loss on line 16 of your Unrecaptured Section 1250 Gain Worksheet on page
D-9 of the 2008 Instructions for Schedule D (Form 1040).

claim. To find the nearest VITA or TCE site, call the number, go to
1-800-829-1040. www.irs.gov/localcontacts or look in the
5. As part of the TCE program, AARP offers the
Tax-Aide counseling program. To find the near-
phone book under United States Govern-
ment, Internal Revenue Service.
est AARP Tax-Aide site, call 1-888-227-7669 or • TTY/TDD equipment. If you have access
visit AARP’s website at
How To Get Tax www.aarp.org/money/taxaide.
For more information on these programs, go
to TTY/TDD equipment, call
1-800-829-4059 to ask tax questions or to
order forms and publications.
Help to www.irs.gov and enter keyword “VITA” in the
upper right-hand corner. • TeleTax topics. Call 1-800-829-4477 to lis-
ten to pre-recorded messages covering
Internet. You can access the IRS web- various tax topics.
You can get help with unresolved tax issues, site at www.irs.gov 24 hours a day, 7
order free publications and forms, ask tax ques- days a week to: • Refund information. To check the status of
tions, and get information from the IRS in sev- your 2008 refund, call 1-800-829-1954
eral ways. By selecting the method that is best
• E-file your return. Find out about commer- during business hours or 1-800-829-4477
cial tax preparation and e-file services
for you, you will have quick and easy access to (automated refund information 24 hours a
available free to eligible taxpayers.
tax help. day, 7 days a week). Wait at least 72
• Check the status of your 2008 refund. Go hours after the IRS acknowledges receipt
Contacting your Taxpayer Advocate. The to www.irs.gov and click on Where’s My of your e-filed return, or 3 to 4 weeks after
Taxpayer Advocate Service (TAS) is an inde- Refund. Wait at least 72 hours after the mailing a paper return. If you filed Form
pendent organization within the IRS whose em- IRS acknowledges receipt of your e-filed 8379 with your return, wait 14 weeks (11
ployees assist taxpayers who are experiencing return, or 3 to 4 weeks after mailing a weeks if you filed electronically). Have
economic harm, who are seeking help in resolv- paper return. If you filed Form 8379 with your 2008 tax return available so you can
ing tax problems that have not been resolved your return, wait 14 weeks (11 weeks if provide your social security number, your
through normal channels, or who believe that an you filed electronically). Have your 2008 filing status, and the exact whole dollar
IRS system or procedure is not working as it tax return available so you can provide amount of your refund. Refunds are sent
should. your social security number, your filing out weekly on Fridays. If you check the
You can contact the TAS by calling the TAS status, and the exact whole dollar amount status of your refund and are not given the
toll-free case intake line at 1-877-777-4778 or of your refund. date it will be issued, please wait until the
TTY/TDD 1-800-829-4059 to see if you are eligi-
ble for assistance. You can also call or write to • Download forms, instructions, and publica- next week before checking back.
your local taxpayer advocate, whose phone tions. • Other refund information. To check the
number and address are listed in your local • Order IRS products online. status of a prior year refund or amended
telephone directory and in Publication 1546, return refund, call 1-800-829-1954.
Taxpayer Advocate Service — Your Voice at the
• Research your tax questions online.
IRS. You can file Form 911, Request for Tax- • Search publications online by topic or Evaluating the quality of our telephone
payer Advocate Service Assistance (And Appli- keyword. services. To ensure IRS representatives give
cation for Taxpayer Assistance Order), or ask an accurate, courteous, and professional answers,
IRS employee to complete it on your behalf. For
• View Internal Revenue Bulletins (IRBs) we use several methods to evaluate the quality
published in the last few years. of our telephone services. One method is for a
more information, go to www.irs.gov/advocate.
Low Income Taxpayer Clinics (LITCs). • Figure your withholding allowances using second IRS representative to listen in on or
the withholding calculator online at record random telephone calls. Another is to ask
LITCs are independent organizations that pro-
vide low income taxpayers with representation www.irs.gov/individuals. some callers to complete a short survey at the
end of the call.
in federal tax controversies with the IRS for free • Determine if Form 6251 must be filed by
or for a nominal charge. The clinics also provide using our Alternative Minimum Tax (AMT) Walk-in. Many products and services
tax education and outreach for taxpayers who Assistant. are available on a walk-in basis.
speak English as a second language. Publica-
tion 4134, Low Income Taxpayer Clinic List, • Sign up to receive local and national tax
provides information on clinics in your area. It is news by email. • Products. You can walk in to many post
available at www.irs.gov or at your local IRS • Get information on starting and operating offices, libraries, and IRS offices to pick up
office. a small business. certain forms, instructions, and publica-
tions. Some IRS offices, libraries, grocery
Free tax services. To find out what services stores, copy centers, city and county gov-
are available, get Publication 910, IRS Guide to ernment offices, credit unions, and office
Phone. Many services are available by
Free Tax Services. It contains lists of free tax supply stores have a collection of products
phone.
information sources, including publications, available to print from a CD or photocopy
services, and free tax education and assistance from reproducible proofs. Also, some IRS
programs. It also has an index of over 100 • Ordering forms, instructions, and publica- offices and libraries have the Internal Rev-
TeleTax topics (recorded tax information) you tions. Call 1-800-829-3676 to order cur- enue Code, regulations, Internal Revenue
can listen to on your telephone. rent-year forms, instructions, and Bulletins, and Cumulative Bulletins avail-
Accessible versions of IRS published prod- publications, and prior-year forms and in- able for research purposes.
ucts are available on request in a variety of structions. You should receive your order
alternative formats for people with disabilities. within 10 days. • Services. You can walk in to your local
Taxpayer Assistance Center every busi-
Free help with your return. Free help in pre-
• Asking tax questions. Call the IRS with ness day for personal, face-to-face tax
your tax questions at 1-800-829-1040. help. An employee can explain IRS letters,
paring your return is available nationwide from
IRS-trained volunteers. The Volunteer Income • Solving problems. You can get request adjustments to your tax account,
Tax Assistance (VITA) program is designed to face-to-face help solving tax problems or help you set up a payment plan. If you
help low-income taxpayers and the Tax Coun- every business day in IRS Taxpayer As- need to resolve a tax problem, have ques-
seling for the Elderly (TCE) program is designed sistance Centers. An employee can ex- tions about how the tax law applies to your
to assist taxpayers age 60 and older with their plain IRS letters, request adjustments to individual tax return, or you are more com-
tax returns. Many VITA sites offer free electronic your account, or help you set up a pay- fortable talking with someone in person,
filing and all volunteers will let you know about ment plan. Call your local Taxpayer Assis- visit your local Taxpayer Assistance
credits and deductions you may be entitled to tance Center for an appointment. To find Center where you can spread out your
Page 70 Chapter 5 How To Get Tax Help

records and talk with an IRS representa- DVD for tax products. You can order Small Business Resource Guide
tive face-to-face. No appointment is nec- Publication 1796, IRS Tax Products 2009. This online guide is a must for
essary — just walk in. If you prefer, you DVD, and obtain: every small business owner or any tax-
can call your local Center and leave a payer about to start a business. This year’s
message requesting an appointment to re-
• Current-year forms, instructions, and pub- guide includes:
lications.
solve a tax account issue. A representa-
• Helpful information, such as how to pre-
tive will call you back within 2 business • Prior-year forms, instructions, and publica- pare a business plan, find financing for
days to schedule an in-person appoint- tions.
your business, and much more.
ment at your convenience. If you have an
ongoing, complex tax account problem or
• Tax Map: an electronic research tool and • All the business tax forms, instructions,
finding aid.
a special need, such as a disability, an and publications needed to successfully
appointment can be requested. All other • Tax law frequently asked questions. manage a business.
issues will be handled without an appoint-
• Tax Topics from the IRS telephone re- • Tax law changes for 2009.
ment. To find the number of your local
sponse system. • Tax Map: an electronic research tool and
office, go to www.irs.gov/localcontacts or
look in the phone book under United • Internal Revenue Code — Title 26 of the finding aid.
States Government, Internal Revenue U.S. Code. • Web links to various government agen-
Service.
• Fill-in, print, and save features for most tax cies, business associations, and IRS orga-
forms. nizations.
Mail. You can send your order for
forms, instructions, and publications to • Internal Revenue Bulletins. • “Rate the Product” survey — your opportu-
the address below. You should receive nity to suggest changes for future editions.
• Toll-free and email technical support.
a response within 10 days after your request is • A site map of the guide to help you navi-
received. • Two releases during the year. gate the pages with ease.
– The first release will ship the beginning
Internal Revenue Service of January 2009. • An interactive “Teens in Biz” module that
1201 N. Mitsubishi Motorway – The final release will ship the beginning gives practical tips for teens about starting
Bloomington, IL 61705-6613 of March 2009. their own business, creating a business
plan, and filing taxes.
Purchase the DVD from National Technical
Information Service (NTIS) at The information is updated during the year.
www.irs.gov/cdorders for $30 (no handling fee) Visit www.irs.gov and enter keyword “SBRG” in
or call 1-877-233-6767 toll free to buy the DVD the upper right-hand corner for more informa-
for $30 (plus a $6 handling fee). tion.
To help us develop a more useful index, please let us know if you have ideas for index entries.
Index See “Comments and Suggestions” in the “Introduction” for the ways you can reach us.
A Estimated tax . . . . . . . . . . . . . . 25 Casualty and theft losses . . . . 7 Credits:

Address change . . . . . . . . . . . . . 28 Foreign earned income Waiver of penalty . . . . . . . . . . . 60 2008 withholding and estimated
Adjustments to income: exclusion worksheet, Change of address . . . . . . . . . . 28 taxes . . . . . . . . . . . . . . . . . . . . 50
Estimated tax . . . . . . . . . . . . . . 21 underpayment penalty . . . . 69 Change of name . . . . . . . . . . . . . 51 Annualized taxes and
Form 2210 . . . . . . . . . . . . . . . . . 57 Changing withholding . . . . . . 4-5 credits . . . . . . . . . . . . . . . . . . . 30
Withholding allowances . . . . . . 7
Qualified dividends worksheet, Deductions and Adjustments
Worksheet instructions . . . . 7-8 Charitable contributions . . . . . . 7
underpayment penalty . . . . 68 Worksheet . . . . . . . . . . . . . . . . 8
Age 65 or older: Underpayment penalty . . . . . . 57 Child and dependent care
Exemption from credit: Estimated tax against income
Annuities . . . . . . . . . . . . . . . . . 16-17 tax . . . . . . . . . . . . . . . . . . . . . . 51
withholding . . . . . . . . . . . . . . 13 Personal Allowances
Assistance: Excess withholding on social
AGI: Worksheet . . . . . . . . . . . . . . . . 6
Tax help . . . . . . . . . . . . . . . . . . . 70 security or railroad retirement
Annualized AGI . . . . . . . . . . . . 30 Child tax credit:
taxes . . . . . . . . . . . . . . . . . . . . 52
Deductions and Adjustments Personal Allowances
Exemption from
Worksheet . . . . . . . . . . . . . . . . 7 B Worksheet . . . . . . . . . . . . . . . . 6
withholding . . . . . . . . . . . . . . 13
Expected AGI . . . . . . . . . . 21, 29 Backup withholding . . . . . . 17-18 Claim of right . . . . . . . . . . . . . . . . . 7
Expected taxes and
Aliens: Credit against income Collection of tax:
credits . . . . . . . . . . . . . . . 23, 30
Nonresident aliens . . . . . . . . . 21 tax . . . . . . . . . . . . . . . . . . . . . . 51 Estimated tax . . . . . . . . . . . . . . . 2
Amended returns . . . . . . . . 51, 54 Bankruptcy: Withholding . . . . . . . . . . . . . . . . . 1
Withholding tax, credit
Annualized estimated tax Withholding allowance Comments on publication . . . . 2 for . . . . . . . . . . . . . . . . . . . . . . . 50
worksheets: decrease . . . . . . . . . . . . . . . . . 4 Commodity credit loans . . . . . 17 Criminal penalties:
Capital gains . . . . . . . . . . . . . . . 47 Blind persons: Community property Willfully false or fraudulent Form
Foreign earned income Exemption from states . . . . . . . . . . . . . . . . . . . . . 51 W-4 . . . . . . . . . . . . . . . . . . . . . 14
exclusion or deduction . . . . 48 withholding . . . . . . . . . . . . . . 13 Compensation . . . . . . . . . . . . . . . 4 Crop insurance
Making work pay credit . . . . . 49 Independent contractors, payments . . . . . . . . . . . . . . . . . 17
Qualified dividends . . . . . . . . . 47 C backup withholding . . . . . . . 17 Cumulative wage method of
Annualized income installment Capital gains and losses: Supplemental wages . . . . . . . 13 withholding . . . . . . . . . . . . . . . 12
method . . . . . . . . . . . . . . . . . . . 30 Annualized estimated Tips . . . . . . . . . . . . . . . . . . . . . . . 15
Blank worksheet, estimated tax . . . . . . . . . . . . . . . . . . . . . . 26 Wages and salaries . . . . . . 4-15
tax . . . . . . . . . . . . . . . . . . . . . . 44 Estimated tax on net capital Credit cards . . . . . . . . . . . . . . . . . 29 D
Capital gains worksheet, gain . . . . . . . . . . . . . . . . . . . . . 23 Crediting of Deductions:
underpayment penalty . . . . 68 Qualified dividends . . . . . . . . . 23 overpayment . . . . . . . . . . . . . . 28 Home mortgage interest . . . . . 7
Chapter 5 How To Get Tax Help Page 71

Deductions: (Cont.) Change of name . . . . . . . . . . . 51 Itemized deductions Form 1040-ES . . . . . . . . 19, 21, 28
Withholding allowance Credit against income phaseout . . . . . . . . . . . . 39, 45 Form 1040-ES (NR) . . . . . . . . . . 21
decrease . . . . . . . . . . . . . . . . . 4 tax . . . . . . . . . . . . . . . . . . . . . . 51 Making work pay credit . . . . . 43 Form 1040X . . . . . . . . . . . . . . . . . 51
Worksheet instructions . . . . 7-8 Credit card, payment by . . . . 29 Qualified dividends . . . . . . . . . 23 Form 1041-ES . . . . . . . . . . . . . . . 21
Deferred compensation, Crediting of Railroad retirement Form 1099 series . . . . . . . . 17, 50
nonqualified . . . . . . . . . . . . . . 16 overpayment . . . . . . . . . . . . . 28 benefits . . . . . . . . . . . . . . . . . . 36
Form 2210 . . . . . . . . . . . . 55, 58, 59
Dependents: Divorced taxpayers . . . . . . . . . 52 Self-employment tax . . . . . . . . 37
Self-employment tax, Form 2210-F . . . . . . . . . . . . . . . . . 60
Exemptions . . . . . . . . . . . . . . . . . 6 Domestic help . . . . . . . . . . . . . . 25
Electronic funds illustrated . . . . . . . . . . . . . . . . 29 Form 8822 . . . . . . . . . . . . . . . . . . . 28
Withholding allowance
decrease . . . . . . . . . . . . . . . . . 4 withdrawal . . . . . . . . . . . . . . . 29 Social security benefits . . . . . 36 Form W-2 . . . . . . . . . . . . . . . . . . . 50
Disabled persons: Estates and trusts . . . . . . . . . . 21 Standard deduction . . . . . . . . . 38 Form W-2c . . . . . . . . . . . . . . . . . . 50
Impairment-related work Exemptions . . . . . . . . . . . . . . . . 21 Excess social security or Form W-2G . . . . . . . . . . . . . . 17, 50
expenses . . . . . . . . . . . . . . . . . 7 Expected AGI . . . . . . . . . . 21, 29 railroad retirement tax Form W-4:
Disaster: Expected taxable withholding . . . . . . . . . . . 50, 52 Illustrated example . . . . 9, 10-11
Waiver of penalty . . . . . . . . . . . 60 income . . . . . . . . . . . . . . 21, 29 Nonrailroad employees Form W-4 worksheets . . . . . . . . 5
Dividends: Expected taxes and worksheet . . . . . . . . . . . . . . . 52 2009 Form W-4 and
Backup withholding . . . . . . . . . 17 credits . . . . . . . . . . . . . . . 23, 30 Railroad employees worksheets . . . . . . . . . . . . . . . 9
Qualified dividends, estimated Farmers and fishermen . . . . 20, worksheets . . . . . . . . . . . . . . 52 Completing of . . . . . . . . . . . . . . . 5
tax . . . . . . . . . . . . . . . . . . . . . . 23 23, 24, 54 Exemption from Deductions and Adjustments
Underreported . . . . . . . . . . . . . 18 Fiscal year taxpayers . . . . . . . 24 withholding . . . . . . . . . . . . . . . 13 Worksheet . . . . . . . . . . . . . . . . 9
Form 1040-ES . . . . . . . . . . . . . 21 Age 65 or older . . . . . . . . . . . . . 13 Deductions and adjustments
Divorced taxpayers:
Higher income Blind persons . . . . . . . . . . . . . . 13 worksheet instructions . . . . . 7
Estimated tax credit . . . . . . . . 52
individuals . . . . . . . . . . . . . . . 23 Claiming . . . . . . . . . . . . . . . . . . . 13 Number of allowances
Withholding . . . . . . . . . . . . . . . 4, 5
How to figure . . . . . . . . . . . 21, 25 Good for only one year . . . . . 13 claimed . . . . . . . . . . . . . . . . . 6, 9
Domestic help . . . . . . . . . . . . . . . . 4 Personal Allowances
How to pay . . . . . . . . . . . . . . . . 28 Itemized deductions . . . . . . . . 13
Definition . . . . . . . . . . . . . . . . . . . 4 Worksheet . . . . . . . . . . . . . . 6, 9
Illustrated examples . . . . . . . . 29 Students . . . . . . . . . . . . . . . . . . . 13
Estimated tax, regular Two-Earners/Multiple Jobs
Instructions for Worksheet 2-10, Exemptions:
installment method . . . . . . . 25 Worksheet . . . . . . . . . . . . . . . . 9
annualized estimated Dependents . . . . . . . . . . . . . . . . . 6
Withholding . . . . . . . . . . . . . . . . . 4 Withholding allowances . . . . . . 5
tax . . . . . . . . . . . . . . . . . . . . . . 25 Expected taxable
Itemized deductions . . . . . . . . 21 income . . . . . . . . . . . . . . 21, 39 Form W-4, Employee’s
E Married taxpayers . . . . . . . . . . 19 Personal Allowances Allowance Withholding
Net capital gain . . . . . . . . 23, 26 Worksheet . . . . . . . . . . . . . . . . 6 Certificate . . . . . . . . . . . . . . . 4-13
Electronic funds
withdrawal . . . . . . . . . . . . . . . . 29 No standard deduction . . . . . . 21 Reduction of . . . . . . . . . 6, 21, 26 Form W-4P . . . . . . . . . . . . . . . . . . 16
Nonresident aliens . . . . . 25, 26 Self . . . . . . . . . . . . . . . . . . . . . . . . . 6 Form W-4S . . . . . . . . . . . . . . . . . . 15
Eligible rollover
Overpayment . . . . . . . . . . . . . . 28 Spouse . . . . . . . . . . . . . . . . . . . . . 6 Form W-4V . . . . . . . . . . . . . . . . . . 17
distributions . . . . . . . . . . . . . . 16
Payments not required . . . . . . 26 Withholding allowances . . . . . . 5 Form W-7 . . . . . . . . . . . . . . . . . . . 18
Employee business expenses: Payment-vouchers . . . . . . . . . 28 Worksheets . . . . . . . . . . . . 39, 46
Accountable plans . . . . . . . . . . 14 Form W-9 . . . . . . . . . . . . . . . . . . . 18
Qualified dividends . . . . . . . . . 23 Expenses . . . . . . . . . . . . . . . . . . . . 7
Excess reimbursements or Fraud:
Railroad retirement Allowances . . . . . . . . . . . . . . . . 14
allowances . . . . . . . . . . . . . . 14 Form W-4 statements . . . . . . . 14
benefits . . . . . . . . . . . . . . . . . . 21 Standard mileage rates . . . . . . 2
Nonaccountable plans . . . . . . 14 Regular installment Free tax services . . . . . . . . . . . . 70
Reimbursements . . . . . . . . . . . 14 method . . . . . . . . . . . . . . 25, 29 Fringe benefits . . . . . . . . . . . . . . 15
Employer Identification Required annual F
Numbers (EINs) . . . . . . . . . . . 18 payment . . . . . . . . . . . . . 23, 30 Farmers:
Employers . . . . . . . . . . . . . . . . . . 13
G
Required estimated tax Estimated tax . . . . . . 20, 23, 24, Gambling:
Excess withholding on social payment . . . . . . . . . . . . . . . . . 30 54
security and railroad Form W-2G . . . . . . . . . . . . . . . . 50
Self-employment Fiscal years . . . . . . . . . . . . . . . . 24 Losses . . . . . . . . . . . . . . . . . . 7, 50
retirement taxes . . . . . . . . . . 52 income . . . . . . . . . . . . . . 21, 25 Gross income . . . . . . . . . . . . . . 20
Repaying withheld tax . . . . . . 13 Winnings . . . . . . . . . . . . . . . . . . 50
Separate returns . . . . . . . . . . . 51 Joint returns . . . . . . . . . . . . . . . 20
Tips . . . . . . . . . . . . . . . . . . . . . . . 15 Gross income . . . . . . . . . . . . . . . 20
Sick pay . . . . . . . . . . . . . . . . . . . 16 Required annual
Errors: Farming . . . . . . . . . . . . . . . . . . . 20
Small businesses . . . . . . . . . . . 20 payment . . . . . . . . . . . . . . . . . 23
Excess withholding of social Fishing . . . . . . . . . . . . . . . . . . . . 20
Social security benefits . . . . . 21 Underpayment penalty . . . . . 54,
security or railroad retirement Standard deduction . . . . . 21, 25 60
taxes by employer . . . . . . . . 52 Total estimated tax Waiver of underpayment H
Estate beneficiaries: payments . . . . . . . . . . . . . . . . 24 penalty . . . . . . . . . . . . . . . . . . 60 Head of household:
Underpayment penalty . . . . . . 54 Types of taxes included . . . . . 19 Withholding for Personal Allowances
Estate tax: Underpayment penalty . . . . . 25, farmworkers . . . . . . . . . . . . . . 4 Worksheet . . . . . . . . . . . . . . . . 6
Income in respect of a 54 Figures: Withholding allowance . . . . . . . 6
decedent . . . . . . . . . . . . . . . . . 7 When to pay . . . . . . . . . . . . . . . 24 Tables and figures . . . . . . . . . . 13 Help:
Estates: When to start payments . . . . . 24 Fiscal years: Tax help . . . . . . . . . . . . . . . . . . . 70
Estimated tax . . . . . . . . . . . . . . 21 Who does not have to Estimated tax . . . . . . . . . . . . . . 24 Higher income individuals:
Estimated tax: pay . . . . . . . . . . . . . . . . . . . . . . 19 Farmers and fishermen . . . . . 24 Required annual
Adjustments to income . . . . . 21 Who must pay . . . . . . . . . . . . . 19 Withholding tax credit . . . . . . . 51 payment . . . . . . . . . . . . . . . . . 23
Aliens . . . . . . . . . . . . . . . . . 21, 26 Estimated tax Fishermen: Underpayment penalty . . . . . . 54
Amended tax . . . . . . . . . . . . . . . 25 worksheets . . . . . . . . . . . . . . . 36 Estimated tax . . . . . . 20, 23, 24, Household workers . . . . . . . . . . 4
Annualized AGI . . . . . . . . . . . . 30 2009 annualized estimated tax 54
Annualized income installment worksheet . . . . . . . . . . . . 44-45 Fiscal years . . . . . . . . . . . . . . . . 24
method . . . . . . . . . . . . . . 25, 30 2009 estimated tax Gross income . . . . . . . . . . . . . . 20 I
Blank worksheet . . . . . . . . . 44 worksheet . . . . . . . . . . . . . . . 35 Joint returns . . . . . . . . . . . . . . . 20 Individual retirement
Annualized taxable Amended estimated tax . . . . . 25 Required annual arrangements (IRAs) (See
income . . . . . . . . . . . . . . . . . . 30 Capital gains . . . . . . . . . . . . . . . 41 payment . . . . . . . . . . . . . . . . . 23 also Pensions; Retirement
Annualized taxes and Exemption amount Underpayment penalty . . . . . 54, plans) . . . . . . . . . . . . . . . . . . . . . 16
credits . . . . . . . . . . . . . . . . . . . 30 reduction . . . . . . . . . . . . 39, 46 60 Interest income:
Change in amount . . . . . . . . . . 25 Housing Midwestern displaced Waiver of underpayment Backup withholding . . . . . . . . . 17
Change of address . . . . . . . . . 28 individuals . . . . . . . . . . . . . . . 40 penalty . . . . . . . . . . . . . . . . . . 60 Underreported . . . . . . . . . . . . . 18

Itemized deductions: Pensions . . . . . . . . . . . . . . . . . 16-17 Taxpayer identification numbers Underpayment penalty,

Deductions and Adjustments New job . . . . . . . . . . . . . . . . . . . . 4 (TINs) . . . . . . . . . . . . . . . . . . . 18 calendar to determine number
Worksheet . . . . . . . . . . . . . . . . 7 Rollovers . . . . . . . . . . . . . . . . . . 16 Spouse (See also Married of days payment is late (Table
Estimated tax, expected taxable Wages and salaries withholding taxpayers) . . . . . . . . . . . . . . . . . . 5 4-1) . . . . . . . . . . . . . . . . . . . . . 61
income . . . . . . . . . . . . . . . . . . 21 rules compared . . . . . . . . . . 16 Exemption . . . . . . . . . . . . . . . . . . 6 Worksheets, where to find
Exemption from Personal allowances: Marital status . . . . . . . . . . . . . . . 5 (Table 2-2) . . . . . . . . . . . . . . . 34
withholding . . . . . . . . . . . . . . 13 Reduction of . . . . . . . . . . . . . . . . 6 Personal Allowances Tax help . . . . . . . . . . . . . . . . . . . . . 70
Gambling losses . . . . . . . . . . . 50 Personal Allowances Worksheet . . . . . . . . . . . . . . . . 6 Tax Rate Schedules . . . . . . . . . 40
Phaseout of . . . . . . . . . . . . . . 7, 21 Worksheet . . . . . . . . . . . . . . . 6-7 Standard deduction . . . . . 21, 25 Taxpayer Advocate . . . . . . . . . . 70
Reduction . . . . . . . . . . . . . . . . 7, 21 Personal exemptions . . . . . . . . . 6 Standard mileage rates . . . . . . . 2 Taxpayer identification
Worksheets . . . . . . . . . . 8, 39, 45 Publication 919 . . . . . . . . . . . . . . 12 numbers (TINs) . . . . . . . . . . . 18
State and local income taxes
Publications: and property taxes . . . . . . . . . 7 Tips . . . . . . . . . . . . . . . . . . . . . . . . . 15
J Tax help . . . . . . . . . . . . . . . . . . . 70 State or local deferred Total income . . . . . . . . . . . . . . . . 21
Joint returns: compensation plan Trust beneficiaries:
Excess withholding on social payments . . . . . . . . . . . . . . . . . 16 Underpayment penalty . . . . . . 54
Q Students . . . . . . . . . . . . . . . . . . . . 13
security and railroad TTY/TDD information . . . . . . . . 70
Qualified dividends . . . . . . . . . . 23 Suggestions for
retirement taxes . . . . . . . . . . 52 Two-Earners/Multiple Jobs
Farmers and fishermen . . . . . 20 publication . . . . . . . . . . . . . . . . . 2 Worksheet . . . . . . . . . . . . . . . . . 9
Underpayment penalty . . . . . . 55 R Supplemental wages . . . . . 13-14
Railroad retirement benefits:
Choosing to withhold . . . . . . . 17
U
M Estimated tax . . . . . . . . . . . . . . 21 T Underpayment
Marital status: Tables and figures: penalty . . . . . . . . . . . . . . . . . 54-69
Railroad retirement tax:
Form W-4 worksheet . . . . . . . . 5 2009 estimated tax worksheet Actual withholding
Excess withholding . . . . . 50, 52
Withholding rate . . . . . . . . . . . . . 5 (Figure 2-B) . . . . . . . . . . . . . . 22 method . . . . . . . . . . . . . . . . . . 57
Worksheets . . . . . . . . . . . . . . 53
Married taxpayers (See also Annualized income installment Amended estimated tax . . . . . 25
Refund claims . . . . . . . . . . . . . . 52
Joint returns) . . . . . . . . . . . . . . . 52 method worksheet, estimated Amended returns . . . . . . . . . . . 54
Regular installment method, Annualized income installment
Estimated tax . . . . . . . . . . . . . . 19 tax (Figure 2-C) . . . . . . . 27-28
estimated tax . . . . . . . . . 25, 29 method . . . . . . . . . . . . . . . . . . 57
Marital status . . . . . . . . . . . . . . . 5 Annualized income installment
Reimbursements . . . . . . . . . . . . 14 method, Form 2210 (Figure Beneficiaries of estates and
Excess . . . . . . . . . . . . . . . . . . . . 14 4-C) . . . . . . . . . . . . . . . . . . 66-67 trusts . . . . . . . . . . . . . . . . . . . . 54
Medical and dental
Reporting: Annualized income installment Capital gains . . . . . . . . . . . . . . . 68
expenses . . . . . . . . . . . . . . . . . . 7
Fringe benefits . . . . . . . . . . . . . 15 method, illustrated example Exceptions . . . . . . . . . . . . . . . . . 55
Military retirement pay . . . . 4, 16 Gambling winnings . . . . . . . . . 17 estimated tax (Figure Farmers and fishermen . . . . 54,
Missing children, photographs Tips to employer . . . . . . . . . . . 15 2-E) . . . . . . . . . . . . . . . . . . 32-33 60
of . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Required annual Annualized income installment Figuring . . . . . . . . 54, 56, 57, 58
More information: payment . . . . . . . . . . . . . . . . . . 23 Foreign earned income
method, underpayment
Tax help . . . . . . . . . . . . . . . . . . . 70 Required estimated tax worksheet, annualized
penalty (Figure
Multiple jobs: payment . . . . . . . . . . . . . . . . . . 30 4-C) . . . . . . . . . . . . . . . . . . 66-67 income . . . . . . . . . . . . . . . . . . 69
Withholding allowances . . . . . . 5 Retirement plans: Calendar to determine days Higher income
Pension plans . . . . . . . . . . . . . . 16 payment late (Table individuals . . . . . . . . . . . . . . . 54
Pensions . . . . . . . . . . . . . . . . . . 16 4-1) . . . . . . . . . . . . . . . . . . . . . 61 Joint returns . . . . . . . . . . . . . . . 55
N Late payments, calendar to
Rollovers . . . . . . . . . . . . . . . . . . 16 Credits for Form W-4
Name change . . . . . . . . . . . . . . . 51 determine number of days
State or local deferred deductions and adjustments
Noncitizens: compensation plan worksheet (Table 1-1) . . . . . 9 (Table 4-1) . . . . . . . . . . . . . . . 61
Estimated tax . . . . . . . . . . . . . . 21 payments . . . . . . . . . . . . . . . . 16 Do you have to pay estimated Lowering or eliminating . . . . . 55
Withholding . . . . . . . . . . . . . . . 5, 6 tax? (Figure 2-A) . . . . . . . . . 20 Minimum required each
Rollovers . . . . . . . . . . . . . . . . . . . . 16
Nonqualified deferred Due dates, estimated tax (Table period . . . . . . . . . . . . . . . . . . . 54
Royalties:
compensation . . . . . . . . . . . . . 16 2-1) . . . . . . . . . . . . . . . . . . . . . 24 No penalty . . . . . . . . . . . . . . . . . 54
Backup withholding . . . . . . . . . 17
Nonresident aliens: Exemption from withholding on No tax liability last year
Estimated tax . . . . . . . . . . 21, 26 Form W-4 (Figure exception . . . . . . . . . . . . . . . . 56
Individual taxpayer identification S 1-B) . . . . . . . . . . . . . . . . . . . . . 12 Paid through
numbers (ITINs) . . . . . . . . . . 18 Salaries . . . . . . . . . . . . . . . . . . . . . . 4 Form 2210, short method withholding . . . . . . . . . . 55, 57
Sales taxes on qualified motor illustrated (Figure Penalty figured for each
vehicle purchases . . . . . . . . . . 7 4-A) . . . . . . . . . . . . . . . . . . 62-63 period . . . . . . . . . . . . . . . . . . . 54
O Form W-4, illustrated example Penalty thresholds . . . . . . . . . . 54
Saturday, Sunday, holiday
Overpayment: (Figure 1-A) . . . . . . . . . . . 10-11 Qualified dividends . . . . . . . . . 68
rule . . . . . . . . . . . . . . . . . . . . . . . 24
Crediting to estimated Railroad retirement, maximum Regular installment
tax . . . . . . . . . . . . . . . . . . . . . . 28 Self-employment tax . . . . 21, 25
withholding (Table method . . . . . . . . . . . . . . . . . . 57
Separate returns: Required annual
3-1) . . . . . . . . . . . . . . . . . . . . . 52
Estimated tax credit . . . . . . . . 51 payment . . . . . . . . . . . . . . . . . 56
Regular installment method,
P Underpayment penalty . . . . . . 55
illustrated example estimated Schedule AI . . . . . . . . . . . . . . . . 57
Part-year method of Withholding tax credit . . . . . . . 51 Separate returns . . . . . . . . . . . 55
tax (Figure 2-D) . . . . . . . . . . 31
withholding . . . . . . . . . . . . . . . 12 Sick pay . . . . . . . . . . . . . . . . . . 15-16 Regular installment method, Waiver . . . . . . . . . . . . . . . . . . . . . 60
Patronage dividends: Single marital status . . . . . . . . . 5 illustrated example Form When charged . . . . . . . . . . . . . 54
Backup withholding . . . . . . . . . 17 Small businesses: 2210 (Figure 4-B) . . . . . 64-65 Unemployment
Payment-vouchers . . . . . . . . . . 28 Estimated tax . . . . . . . . . . . . . . 20 Regular installment method, compensation . . . . . . . . . . . . . 17
Penalties: Social security benefits: illustrated example
Backup withholding . . . . . . . . . 18 Choosing to withhold . . . . . . . 17 underpayment penalty (Figure
Underpayment of estimated Estimated tax . . . . . . . . . . . . . . 21 4-B) . . . . . . . . . . . . . . . . . . 64-65 W
tax . . . . . . . . . . . . . . . . . . . . . . 54 Social security taxes: Social security, maximum Wages and salaries . . . . . . . . . . 4
Waiver of . . . . . . . . . . . . . . . . . . 60 Excess withholding . . . . . 50, 52 withholding (Table Waiver of penalty . . . . . . . . . . . . 60
Willfully false or fraudulent Form Worksheet . . . . . . . . . . . . . . . 52 3-1) . . . . . . . . . . . . . . . . . . . . . 52 What’s New for 2008:
W-4 . . . . . . . . . . . . . . . . . . . . . 14 FICA tax, withholding Total days, chart (Table Conservation reserve program
Withholding allowances . . . . . 14 obligation . . . . . . . . . . . . . . . . . 3 4-2) . . . . . . . . . . . . . . . . . . . . . 59 payments . . . . . . . . . . . . . . . . 50
Chapter 5 How To Get Tax Help Page 73

What’s New for 2008: (Cont.) Backup withholding . . . . . . . . . 17 Repaying withheld tax . . . . . . 13 Excess social security tax,
Estimated tax penalty Bankruptcy . . . . . . . . . . . . . . . . . 4 Rollovers . . . . . . . . . . . . . . . . . . 16 nonrailroad employee
rates . . . . . . . . . . . . . . . . . . . . 54 Changing . . . . . . . . . . . . . . . . . . . 4 Salaries and wages . . . . . . . . . 4 (Worksheet 3-1) . . . . . . . . . . 53
Excess social security or Checking amount of . . . . . . . . . 5 Separate returns . . . . . . . . . . . 51 Excess social security tax,
railroad retirement tax Choosing not to withhold . . . . 16 Sick pay . . . . . . . . . . . . . . . . . . . 15 nonrailroad employee,
withholding . . . . . . . . . . . . . . 50 Community property Single taxpayers . . . . . . . . . . . . 5 illustrated (Worksheet
Underpayment penalty . . . . . . 54 states . . . . . . . . . . . . . . . . . . . 51 Social security (FICA) 3-1) . . . . . . . . . . . . . . . . . . . . . 52
Waiver of penalty for certain Credit against income tax . . . . . . . . . . . . . . . . . . . . 3, 17 Excess tier 2 railroad retirement
federally declared tax . . . . . . . . . . . . . . . . . . . . . . 50 Tips . . . . . . . . . . . . . . . . . . . . . . . 15 tax (Worksheet 3-3) . . . . . . 53
disasters . . . . . . . . . . . . . . . . 54 Cumulative wage Types of income . . . . . . . . . . . . 4 Exemption amount reduction:
What’s New for 2009: method . . . . . . . . . . . . . . . . . . 12 Underpayment penalty . . . . . 55, Worksheet 2-12 . . . . . . . . . . 46
Additional child tax credit . . . . 3 Deductions and Adjustments 57 Worksheet 2-5 . . . . . . . . . . . 39
Alternative minimum tax Worksheet . . . . . . . . . . . . . . . . 9 Unemployment Foreign earned income
exemption amount Deductions and adjustments compensation . . . . . . . . . . . . 17 exclusion:
increases. . . . . . . . . . . . . . . . . 2 worksheet instructions . . . . . 7 Worksheets: Worksheet 2-14 . . . . . . . . . . 48
Divorced or separated Divorced taxpayers . . . . . . . . 4, 5 2009 annualized estimated tax Worksheet 2-8 . . . . . . . . . . . 42
parents . . . . . . . . . . . . . . . . . . . 2 Domestic help . . . . . . . . . . . . . . . 4 worksheet (Worksheet Worksheet 4-2 . . . . . . . . . . . 69
Earned income credit . . . . . . . . 3 Employers’ rules . . . . . . . . . . . 13 2-10) . . . . . . . . . . . . . . . . . 44-45 Form W-4 . . . . . . . . . . . . . . . . . . . 5
Elective salary deferrals . . . . . 2 Estimated tax . . . . . . . . . . . . . . 24 2009 estimated tax Housing Midwestern displaced
Exclusion of gain on sale of Excess social security and worksheet . . . . . . . . . . . . . . . 35 individuals (Worksheet
main home . . . . . . . . . . . . . . . 2 railroad retirement Additional exemption amount for 2-6) . . . . . . . . . . . . . . . . . . . . . 40
First-time homebuyer taxes . . . . . . . . . . . . . . . . 50, 52 housing Midwestern Itemized deductions phaseout:
credit . . . . . . . . . . . . . . . . . . . . . 3 Exemption from . . . . . . . . . . . . 13 displaced individuals . . . . . 40 Worksheet 2-11 . . . . . . . . . . 45
Increased standard Farmworkers . . . . . . . . . . . . . . . . 4 Age 65 or older or blind Worksheet 2-4 . . . . . . . . . . . 39
deduction . . . . . . . . . . . . . . . . . 2 Federal income tax exemption from withholding Itemized deductions, Form W-4
IRA contribution limits . . . . . . . 2 collection . . . . . . . . . . . . . . . . . 1 (Worksheet 1-3) . . . . . . . . . . 14 (Worksheet 1-2) . . . . . . . . . . . 8
IRA deduction . . . . . . . . . . . . . . . 2 Federal payments . . . . . . . . . . 17 Amended estimated tax Making work pay credit:
Minimum required Fiscal years . . . . . . . . . . . . . . . . 51 (Worksheet 2-16) . . . . . . . . 48 Worksheet 2-15 . . . . . . . . . . 49
distributions . . . . . . . . . . . . . . . 2 Form received after Amended estimated tax, Worksheet 2-9 . . . . . . . . . . . 43
Nonbusiness energy property filing . . . . . . . . . . . . . . . . . . . . . 51 illustrated (Worksheet Personal allowances reduction
credit . . . . . . . . . . . . . . . . . . . . . 3 Form W-2 . . . . . . . . . . . . . . . . . . 50 2-16) . . . . . . . . . . . . . . . . . . . . 25 (Worksheet 1-1) . . . . . . . . . . . 6
Personal casualty and theft Form W-2c . . . . . . . . . . . . . . . . . 50 Capital gains: Personal Allowances
loss . . . . . . . . . . . . . . . . . . . . . . 2 Form W-2G . . . . . . . . . . . . 17, 50 Worksheet 2-13 . . . . . . . . . . 47 Worksheet . . . . . . . . . . . . . . 6-7
Residential energy efficient Form W-4 . . . . . . . . . . . . . . . . . . . 4 Worksheet 2-7 . . . . . . . . . . . 41 Qualified dividends:
property credit . . . . . . . . . . . . 3 Fringe benefits . . . . . . . . . . . . . 15 Worksheet 4-1 . . . . . . . . . . . 68 Worksheet 2-13 . . . . . . . . . . 47
Retirement savings contribution Gambling winnings . . . . . 17, 50 Dependents age 65 or older or Worksheet 2-7 . . . . . . . . . . . 41
credit . . . . . . . . . . . . . . . . . . . . . 2 Getting right amount of tax blind exemption from Worksheet 4-1 . . . . . . . . . . . 68
Retirement savings credit . . . . 2 withheld . . . . . . . . . . . . . . . 9-12 withholding (Worksheet Railroad retirement benefits
Retirement savings plans . . . . 2 Household workers . . . . . . . . . . 4 1-4) . . . . . . . . . . . . . . . . . . . . . 14 (Worksheet 2-1) . . . . . . . . . . 36
Standard mileage rates . . . . . . 2 Marital status . . . . . . . . . . . . . . . 5 Estimated tax . . . . . . . . . . . . . . 36 Self-employment tax, illustrated
Tax on children’s income . . . . 3 Married taxpayers . . . . . . . . . . . 5 Excess railroad retirement tax (Worksheet 2-2) . . . . . . . . . . 29
Withholding . . . . . . . . . . . . . . . . . 18 Multiple jobs . . . . . . . . . . . . . . . . 5 withholding (Worksheet Social security benefits
Allowances . . . . . . . . . . . . 5, 6, 9 Noncitizens . . . . . . . . . . . . . . . 5, 6 3-2) . . . . . . . . . . . . . . . . . . . . . 52 (Worksheet 2-1) . . . . . . . . . . 36
Personal Allowances Nonperiodic payments . . . . . . 16 Excess social security and tier 1
Part-year method . . . . . . . . . . . 12 railroad retirement tax
■
Worksheet . . . . . . . . . . . . 6, 9
Amended returns . . . . . . . . . . . 51 Penalties . . . . . . . . . . . . . . . . . . 14 (Worksheet 3-2) . . . . . . . . . . 53
Amount of tax withheld, Form Pensions . . . . . . . . . . . . . . . . . . 16 Excess social security tax
W-4 . . . . . . . . . . . . . . . . . . . . . . 4 Periodic payments . . . . . . . . . . 16 withholding (Worksheet
Annuities . . . . . . . . . . . . . . . 16-17 Railroad retirement 3-1) . . . . . . . . . . . . . . . . . . . . . 52
benefits . . . . . . . . . . . . . . . . . . 17

Tax Withholding and Estimated Tax: Pager/Sgml

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Page 1 of 74 of Publication 505 11:22 - 30-MAR-2009

Mar 30, 2009

Page 2 Publication 505 (March 2009)

Publication 505 (March 2009) Page 3

Military retirees. Military retirement pay is New Job

Page 4 Chapter 1 Tax Withholding for 2009

Chapter 1 Tax Withholding for 2009 Page 5

Page 6 Chapter 1 Tax Withholding for 2009

Chapter 1 Tax Withholding for 2009 Page 7

Page 8 Chapter 1 Tax Withholding for 2009

Chapter 1 Tax Withholding for 2009 Page 9

Figure 1-A. Form W-4—Illustrated (John and Joyce Green)

Form W-4 Employee’s Withholding Allowance Certificate OMB No. 1545-0074

Department of the Treasury

Page 10 Chapter 1 Tax Withholding for 2009

Figure 1-A. Form W-4—Illustrated (John and Joyce Green) (Continued)

Chapter 1 Tax Withholding for 2009 Page 11

Figure 1-B. Exemption From Withholding on Form W-4

For 2008, did you have a

Will your 2009 income No

Will your 2009 total income be

Page 12 Chapter 1 Tax Withholding for 2009

Chapter 1 Tax Withholding for 2009 Page 13

65 or older M Blind M 2. Minimum amount . . . . . . . . . . . . . . . . . . . . 2. $ 950

65 or older M Blind M 4. Limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. 5,700

Page 14 Chapter 1 Tax Withholding for 2009

Chapter 1 Tax Withholding for 2009 Page 15

Page 16 Chapter 1 Tax Withholding for 2009

Chapter 1 Tax Withholding for 2009 Page 17

Page 18 Chapter 1 Tax Withholding for 2009

Jane’s answer to the chart’s first question is

for 2009 See chapter 1. tax.

you may have to pay a penalty. If you do not pay

Chapter 2 Estimated Tax for 2009 Page 19

Page 20 of 74 of Publication 505 11:22 - 30-MAR-2009

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

Page 20 Chapter 2 Estimated Tax for 2009

Aliens Expected AGI—Line 1 • File a separate return and your spouse

Chapter 2 Estimated Tax for 2009 Page 21

Figure 2-B. Page 4 of the Instructions for 2009 Form 1040-ES

2009 Estimated Tax Worksheet Keep for Your Records

Page 22 Chapter 2 Estimated Tax for 2009

Chapter 2 Estimated Tax for 2009 Page 23

1. The amounts on lines 58, 64a, 66, and 69.

Page 24 Chapter 2 Estimated Tax for 2009

Amended estimated tax. If you 2009 Annualized Estimated Tax Worksheet

Chapter 2 Estimated Tax for 2009 Page 25

Page 26 Chapter 2 Estimated Tax for 2009

The type and EPS

Figure 2-C. Worksheet for Annualized Income Installment Method

Chapter 2 Estimated Tax for 2009 Page 27

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

29 Net earnings from self-employment for the period 29

Page 28 Chapter 2 Estimated Tax for 2009

by calling 1-800-733-4829. Call 1-800-244-4829 Making Work Pay credit . . . . . . . . . . 800

Chapter 2 Estimated Tax for 2009 Page 29

Page 30 Chapter 2 Estimated Tax for 2009