Publication 505

Cat. No. 15008E Contents

Tax
Introduction . . . . . . . . . . . . . . . . . . 1
Department
of the What's New for 2023 . . . . . . . . . . . . . 2

Withholding
Treasury
Internal Reminders . . . . . . . . . . . . . . . . . . . 2
Revenue

and Estimated
Service Chapter 1. Tax Withholding
for 2023 . . . . . . . . . . . . . . . . . . 2
Salaries and Wages . . . . . . . . . . . 3

Tax Tips . . . . . . . . . . . . . . .
Taxable Fringe Benefits . . . .
Sick Pay . . . . . . . . . . . . .
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9
9
9
Pensions and Annuities . . . . . . . . 10
Gambling Winnings . . . . . . . . . . 11

2023
Unemployment Compensation . . . . 11
For use in Federal Payments . . . . . . .
Backup Withholding . . . . . .
.
.
.
.
.
.
.
.
11
11

Chapter 2. Estimated Tax for 2023 . . . 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 . . . . . 22
How To Figure Each Payment . . . . 23
How To Pay Estimated Tax . . . . . . 26

How To Get Tax Help . . . . . . . . . . . 40

Index . . . . . . . . . . . . . . . . . . . . . 43

Introduction
The federal income tax is a pay-as-you-go tax.
You must pay the tax as you earn or receive in-
come during the year. There are two ways to
pay as you go.
• Withholding. If you are an employee, your
employer probably withholds income tax
from your pay. In addition, tax may be with-
held from certain other income, such as
pensions, bonuses, commissions, and
gambling winnings. The amount withheld is
paid to the IRS in your name.
• Estimated tax. If you don’t pay your tax
through withholding, or don’t pay enough
tax that way, you might have to pay esti-
mated tax. People who are in business for
themselves will generally have to pay their
tax this way. You may have to pay estima-
ted tax if you receive income such as divi-
dends, interest, capital gains, rents, and
royalties. Estimated tax is used to pay not
only income tax, but other taxes such as
self-employment tax and alternative mini-
mum tax.
This publication explains both of these meth-
ods. It also explains how to take credit on your
return for the tax that was withheld and for your
estimated tax payments.
If you didn’t pay enough tax during the year,
either through withholding or by making estima-
ted tax payments, you may have to pay a pen-
alty. Generally, the IRS can figure this penalty
Get forms and other information faster and easier at: for you.
• IRS.gov (English) • IRS.gov/Korean (한국어) Nonresident aliens. Before completing
• IRS.gov/Spanish (Español) • IRS.gov/Russian (Pусский) Form W-4, Employee's Withholding Certificate,
• IRS.gov/Chinese (中文) • IRS.gov/Vietnamese (Tiếng Việt) nonresident alien employees should see Notice

Oct 04, 2022

1392, Supplemental Form W-4 Instructions for increased for all filers, and the amounts are as Access your online account (Individual tax-
Nonresident Aliens (Rev. January 2020), which follows. payers only). Go to IRS.gov/Account to se-
provides nonresident aliens who are not exempt • Single or Married Filing Sepa- curely access information about your federal tax
from withholding instructions for completing rately—$13,850. account.
Form W-4, and the Instructions for Form 8233, • Married Filing Jointly or Qualifying Surviv- • View the amount you owe and a break-
Exemption From Withholding on Compensation ing Spouse—$27,700. down by tax year.
for Independent (and Certain Dependent) Per- • Head of Household—$20,800. • See payment plan details or apply for a
sonal Services of a Nonresident Alien Individ- new payment plan.
Retirement savings contribution credit in-
ual. Also, see chapter 8 of Pub. 519, U.S. Tax come limits increased. In order to claim this • Make a payment, view 5 years of payment
Guide for Aliens, for important information on history and any pending or scheduled pay-
credit for 2023, your MAGI must not be more
withholding. ments.
than $36,500 ($73,000 if married filing jointly;
$54,750 if head of household). • Access your tax records, including key
Final regulations on income tax with- data from your most recent tax return, your
holding. Final regulations on income tax with- Adoption credit or exclusion. The maximum economic impact payment amounts, and
holding were published in the Federal Register adoption credit or exclusion for employer-provi- transcripts.
on October 6, 2020 (at 85 FR 63019). The regu- ded adoption benefits has increased to • View digital copies of select notices from
lations implement changes made by the Tax $15,950. In order to claim either the credit or ex- the IRS.
Cuts and Jobs Act and reflect the redesigned clusion, your MAGI must be less than $279,230. • Approve or reject authorization requests
withholding certificate (Form W-4). See the reg- from tax professionals.
ulations for detailed information on income tax • Update your address or manage your com-
withholding.
Reminders munication preferences.
Comments and suggestions. We welcome Photographs of missing children. The IRS is
your comments about this publication and sug- Future developments. The IRS has created a a proud partner with the National Center for
gestions for future editions. page on IRS.gov for information about Pub. 505 Missing & Exploited Children® (NCMEC). Pho-
at IRS.gov/Pub505. Information about any fu- tographs of missing children selected by the
You can send us comments through
ture developments affecting Pub. 505 (such as Center may appear in this publication on pages
IRS.gov/FormComments. Or, you can write to
legislation enacted after we release it) will be that would otherwise be blank. You can help
the Internal Revenue Service, Tax Forms and
posted on that page. bring these children home by looking at the
Publications, 1111 Constitution Ave. NW,
IR-6526, Washington, DC 20224. Social security tax. Generally, each employer photographs and calling 800-THE-LOST
Although we can’t respond individually to for whom you work during the tax year must (800-843-5678) if you recognize a child.
each comment received, we do appreciate your withhold social security tax up to the annual
feedback and will consider your comments and limit. The annual limit is $160,200 in 2023.
suggestions as we revise our tax forms, instruc- Individual taxpayer identification number
tions, and publications. Don’t send tax ques- (ITIN) renewal. If you were assigned an ITIN
tions, tax returns, or payments to the above ad- before January 1, 2013, or if you have an ITIN
dress.
Getting answers to your tax questions.
that you haven’t included on a tax return in the
last 3 consecutive years, you may need to re- 1.
new it. For more information, see the Instruc-
If you have a tax question not answered by this tions for Form W-7.
publication or the How To Get Tax Help section
at the end of this publication, go to the IRS In-
Advance payments of the premium tax
credit. If you buy health insurance through the
Tax Withholding
teractive Tax Assistant page at IRS.gov/
Health Insurance Marketplace, you may be eli-
Help/ITA where you can find topics by using the
search feature or viewing the categories listed.
gible to have advance payments of the pre-
mium tax credit paid on your behalf to the insur-
for 2023
Getting tax forms, instructions, and pub- ance company. Receiving too little or too much
lications. Go to IRS.gov/Forms to download in advance will affect your refund or balance
current and prior-year forms, instructions, and due. Promptly report changes in your income or Introduction
publications. family size to your Marketplace. See Form 8962
This chapter discusses income tax withholding
and its instructions for more information.
Getting tax forms, instructions, and pub- on:
Additional Medicare Tax. Generally, a 0.9% • Salaries and wages,
lications. Go to IRS.gov/Forms to download
Additional Medicare Tax applies to Medicare • Tips,
current and prior-year forms, instructions, and
wages, Railroad Retirement Tax Act compen- • Taxable fringe benefits,
publications.
sation, and self-employment income over • Sick pay,
Ordering tax forms, instructions, and $200,000 if you are filing as single, head of • Pensions and annuities,
publications. Go to IRS.gov/OrderForms to household, or qualifying surviving spouse; over • Gambling winnings,
order current forms, instructions, and publica- $250,000 if you are married filing jointly; and • Unemployment compensation, and
tions; call 800-829-3676 to order prior-year over $125,000 if you are married filing sepa- • Certain federal payments.
forms and instructions. The IRS will process rately. You may need to include this amount
when figuring your estimated tax. You may also This chapter explains in detail the rules for with-
your order for forms and publications as soon
request that your employer deduct and withhold holding tax from each of these types of income.
as possible. Don’t resubmit requests you’ve al-
an additional amount of income tax withholding The discussion of salaries and wages includes
ready sent us. You can get forms and publica-
from your wages on Form W-4. an explanation of how to complete Form W-4.
tions faster online.
This chapter also covers backup withholding
Net Investment Income Tax (NIIT). You may
on interest, dividends, and other payments.
be subject to NIIT. NIIT is a 3.8% tax on the
lesser of net investment income or the excess
What's New for 2023 of your MAGI over $200,000 ($250,000 if mar- Useful Items
ried filing jointly or qualifying surviving spouse; You may want to see:
Use your 2022 tax return as a guide in figuring
$125,000 if married filing separately). NIIT may
your 2023 estimated tax, but be sure to
need to be included when figuring estimated Form (and Instructions)
consider the following.
tax. You may also request that your employer
Standard deduction amount increased. For W-4 Employee's Withholding Certificate
deduct and withhold an additional amount of in-
W-4

2023, the standard deduction amount has been come tax withholding from your wages on Form W-4P Withholding Certificate for Periodic
W-4P

W-4. Pension or Annuity Payments

Page 2 Chapter 1 Tax Withholding for 2023

 W-4R Withholding Certificate for
W-4R

Determining Amount of Tax Changing Your Withholding

Nonperiodic Payments and Eligible
Rollover Distributions
Withheld Using Form W-4
During the year, changes may occur to your
W-4S Request for Federal Income Tax The amount of income tax your employer with- marital status, adjustments, deductions, or
holds from your regular pay depends on three credits you expect to claim on your tax return.
W-4S

Withholding From Sick Pay

things. When this happens, you may need to give your
W-4V Voluntary Withholding Request employer a new Form W-4 to change your with-
W-4V

• The amount you earn in each payroll pe-

riod. holding.
See How To Get Tax Help at the end of this
publication for information about getting these • Your payroll period.
publications and forms. • The information you give your employer on If a change in personal circumstances re-
Form W-4. duces the amount of withholding you are enti-
tled to claim, you are required to give your em-
Salaries and Wages Form W-4 includes four steps that will give
information to your employer to figure your with-
ployer a new Form W-4 within 10 days after the
change occurs.
holding. Complete Steps 2 through 4 only if they
Income tax is withheld from the pay of most em- apply to you. The following rules apply in determining
ployees. Your pay includes your regular pay,
whether you are required to furnish a new Form
bonuses, commissions, and vacation allowan- Step 1. Enter your personal information, in- W-4 to your employer.
ces. It also includes reimbursements and other cluding your anticipated filing status. Your an-
expense allowances paid under a nonaccounta- ticipated filing status will determine the stand- Change of status resulting in withholding
ble plan. See Supplemental Wages, later, for ard deduction and tax rates used to figure your less than your tax liability. If you have one of
definitions of accountable and nonaccountable withholding. the changes in the following bullet list and you
plans.
won't have enough tax withheld for the remain-
Step 2. Complete this step if you (1) hold more der of 2023 to cover your income tax liability for
If your income is low enough that you won’t than one job at a time, or (2) are married and 2023, you are required to furnish a new Form
have to pay income tax for the year, you may be plan to file a joint return and your spouse also W-4 to your employer within 10 days after the
exempt from withholding. This is explained un- works. date of the change.
der Exemption From Withholding, later.
If you or your spouse have another job, • Your filing status changes from Married Fil-
You can ask your employer to withhold in- complete Steps 3 through 4(b) on only ing Jointly (or Qualifying Surviving Spouse)
come tax from noncash wages and other wages !
CAUTION one Form W-4. Your withholding will be to Head of Household or Single (or Married
not subject to withholding. If your employer most accurate if you do this on the Form W-4 Filing Separately) or from Head of House-
does not agree to withhold tax, or if not enough for the highest paying job. hold to Single (or Married Filing Sepa-
is withheld, you may have to pay estimated tax, rately).
as discussed in chapter 2. • You or your spouse start another job, and
Step 3. Complete this step if you have depend-
you chose to use the Multiple Jobs Work-
Military retirees. Military retirement pay is ents and think you may be eligible to claim the
sheet or the Tax Withholding Estimator to
treated in the same manner as regular pay for child tax credit or credit for other dependents on
account for your other job in determining
income tax withholding purposes, even though your tax return. Also, complete this step if you
your withholding.
it is treated as a pension or annuity for other tax want to include an estimate of your other tax
credits (for example, an education credit or the • You or your spouse start another job, and
purposes. as a result file a new 2023 Form W-4, and
foreign tax credit).
you or your spouse select the checkbox in
Household workers. If you are a household Step 2(c) (in this case, you must furnish a
worker, you can ask your employer to withhold Step 4. Complete this optional step to make
other adjustments. new Form W-4 for your first job and select
income tax from your pay. A household worker the checkbox in Step 2(c)).
is an employee who performs household work • Other income (not from jobs).
• Deductions (other than the standard de- • You or your spouse expect a raise of more
in a private home, local college club, or local than $10,000 in regular wages (not a bo-
fraternity or sorority chapter. duction).
• Any additional amounts you want to with- nus) at a second or third job, and the Form
Tax is withheld only if you want it withheld W-4, Step 2(c), checkbox is not selected
and your employer agrees to withhold it. If you hold from each check.
on your Forms W-4.
don’t have enough income tax withheld, you • You no longer expect to be able to claim a
may have to pay estimated tax, as discussed in New Job Child Tax Credit you took into account on a
chapter 2. previously furnished Form W-4.
When you start a new job, you must fill out a • Your other credits you took into account on
Farmworkers. Generally, income tax is with- Form W-4 and give it to your employer. Your a previously furnished Form W-4 decrease
held from your cash wages for work on a farm employer should have copies of the form. If you by more than $500.
unless your employer both: need to change the information later, you must • Your deductions decrease by more than
• Pays you cash wages of less than $150 fill out a new form. $2,300 from the amount you took into ac-
during the year, and count on a previously furnished Form W-4.
• Has expenditures for agricultural labor to- If you work only part of the year (for exam-
• You no longer reasonably expect to claim
taling less than $2,500 during the year. ple, you start working after the beginning of the exemption from withholding.
year), too much tax may be withheld. You may
Differential wage payments. When employ- be able to avoid overwithholding if your em- Change of status resulting in withholding
ees are on leave from employment for military ployer agrees to use the part-year method. See that will cover your tax liability. If you have a
duty, some employers make up the difference Part-Year Method, later, for more information. change of status listed in the previous section,
between the military pay and civilian pay. Pay- you don't have to furnish a new Form W-4 for
ments to an employee who is on active duty for Employee also receiving pension income. If 2023 if after the change you will have enough
a period of more than 30 days will be subject to you receive pension or annuity income and be- tax withheld for the remainder of 2023 to cover
income tax withholding, but not subject to social gin a new job, you will need to file Form W-4 your income tax liability. However, if you will
security or Medicare taxes. The wages and with your new employer. You should also con- have enough tax withheld for 2023 to cover
withholding will be reported on Form W-2, sider furnishing a new Form W-4P. your income tax liability after a change or
Wage and Tax Statement. changes in status, but your filing status changes
from Married Filing Jointly (or Qualifying Surviv-
ing Spouse) to Head of Household or to Single
(or Married Filing Separately) or from Head of

Chapter 1 Tax Withholding for 2023 Page 3

Household to Single (or Married Filing Sepa- penalty. If too much tax is withheld, you will lose How Do You Increase Your
rately) during 2023, you are required to furnish the use of that money until you get your refund. Withholding?
your employer a new Form W-4 for 2024 by De- Always check your withholding if there are per-
cember 1, 2023, or, if later, 10 days after the sonal or financial changes in your life or You can increase your withholding by entering
date of the change in filing status, to take effect changes in the law that might change your tax an additional amount that you want withheld
in 2024. liability. See Table 1-1 for examples. from each paycheck on Form W-4.

Otherwise, if you want to change your with- Note. You can’t give your employer a pay- Requesting an additional amount be with-
holding for any other reason, you can generally ment to cover federal income tax withholding on held. You can request that an additional
do that whenever you wish. See Table 1-1 for salaries and wages for past pay periods or a amount be withheld from each paycheck by en-
examples of personal and financial changes payment for estimated tax. tering the additional amount in Step 4(c) of
you should consider. Form W-4. To see if you should request an ad-
When Should You Check Your ditional amount be withheld, complete Work-
Table 1-1. Personal and Financial Withholding? sheets 1-3 and 1-5. Complete a new Form W-4
Changes if the amount on Worksheet 1-5, line 5:
The earlier in the year you check your withhold-
1. Is more than you want to pay with your tax
Factor Examples ing, the easier it is to get the right amount of tax
return or in estimated tax payments
withheld.
Lifestyle Marriage throughout the year, or
change Divorce You should check your withholding when 2. Would cause you to pay a penalty when
Birth or adoption of child
any of the following situations occur. you file your tax return for 2023.
Purchase of a new home
Retirement 1. You receive a paycheck stub (statement)
What if I have more than one job or my
Filing chapter 11 bankruptcy covering a full pay period in 2023 showing
spouse also has a job? You are more likely
tax withheld based on 2023 tax rates.
Wage income You or your spouse start or to need to increase your withholding if you have
stop working, or start or stop a 2. You prepare your 2022 tax return and get more than one job or if you are married filing
second job a: jointly and your spouse also works. If this is the
case, you can increase your withholding for one
Change in the Interest income a. Big refund, or
or more of the jobs.
amount of Dividends b. Balance due that is: You can apply the amount on Worksheet
taxable Capital gains
i. More than you can comfortably 1-5, line 5, to only one job or divide it between
income not Self-employment income
subject to IRA (including certain Roth pay, or the jobs any way you wish. For each job, deter-
withholding IRA) distributions mine the extra amount that you want to apply to
ii. Subject to a penalty. that job and divide that amount by the number
Change in the IRA deduction
3. There are changes in your life or financial of paydays remaining in 2023 for that job. This
amount of Student loan interest
situation that affect your tax liability. See will give you the additional amount to enter on
adjustments to deduction
Table 1-1. the Form W-4 you will file for that job. You need
income Alimony expense to give your employer a new Form W-4 for each
4. There are changes in the tax law that af- job for which you are changing your withhold-
Change in the Medical expenses
fect your tax liability. ing.
amount of Taxes
itemized Interest expense
How Do You Check Your Example. M works in a store and earns
deductions or Gifts to charity
tax credits Dependent care expenses Withholding? $46,000 a year. M’s spouse, J, works in a fac-
Education credit tory, earns $68,000 a year, and has 49 pay peri-
Child tax credit You can use the worksheets and tables in this ods left. In 2023, they will also have $184 in tax-
Earned income credit publication to see if you are having the right able interest and $1,000 of other taxable
amount of tax withheld. You can also use the income. They expect to file a joint income tax
Tax Withholding Estimator at IRS.gov/W4App. return. M and J complete Worksheets 1-3, 1-4,
If you change the amount of your withhold- and 1-5. Line 5 of Worksheet 1-5 shows that
ing, you can request that your employer with- If you use the worksheets and tables in this
publication, follow these steps. they will owe an additional $4,459 after sub-
hold using the Cumulative Wage Method, later. tracting their withholding for the year. They can
1. Fill out Worksheet 1-3 to project your total divide the $4,459 any way they want. They can
Checking Your Withholding federal income tax liability for 2023. enter an additional amount on either of their
2. Fill out Worksheet 1-5 to project your total Forms W-4, or divide it between them. They de-
After you have given your employer a Form federal withholding for 2023 and compare cide to have the additional amount withheld
W-4, you can check to see whether the amount that with your projected tax liability from from J’s wages, so they enter $91 ($4,459 ÷ 49
of tax withheld from your pay is too much or too Worksheet 1-3. remaining paydays) on J’s Form W-4 in Step
little. If too much or too little tax is being with- 4(c).
held, you should give your employer a new If you are not having the correct amount of
Form W-4 to change your withholding. You can tax withheld, line 6 of Worksheet 1-5 will show How Do You Decrease Your
get a blank Form W-4 from your employer or you how to adjust the amount withheld each Withholding?
print the form from IRS.gov. payday. For ways to increase the amount of tax
You can use the Tax Withholding Esti- withheld, see How Do You Increase Your With- If your completed Worksheets 1-3 and 1-5 show
holding, later. that you may have more tax withheld than your
TIP mator at IRS.gov/W4App instead of the
worksheets in this publication or inclu- projected tax liability for 2023, you may be able
If line 5 of Worksheet 1-5 shows that you are to decrease your withholding by following the
ded with Form W-4 to determine whether you
having more tax withheld than necessary, see instructions in Worksheet 1-5.
need to have your withholding increased or de-
How Do You Decrease Your Withholding, later,
creased.
for ways to decrease the amount of tax you
have withheld each payday. Tax Credits
You should try to have your withholding
match your actual tax liability. If not enough tax Detailed instructions for completing a new Table 1-2 shows many of the tax credits you
is withheld, you will owe tax at the end of the Form W-4 to adjust your withholding follow may be able to use to decrease your withhold-
year and may have to pay interest and a Worksheet 1-5. ing. For a complete list of credits you may be

Page 4 Chapter 1 Tax Withholding for 2023

Table 1-2. Tax Credits for 2023
For more information about the... See...
Adoption credit Instructions for Form 8839
Credit for child and dependent care expenses Pub. 503, Child and Dependent Care Expenses
Child tax credit (including the additional child tax credit) 2022 Instructions for Schedule 8812 (Form 1040)
Credit for other dependents 2022 Instructions for Schedule 8812 (Form 1040)
Earned income credit Pub. 596, Earned Income Credit (EIC)
Education credits Pub. 970, Tax Benefits for Education
Credit for the elderly or the disabled Pub. 524, Credit for the Elderly or the Disabled
Foreign tax credit (except any credit that applies to wages not subject to Pub. 514, Foreign Tax Credit for Individuals
U.S. income tax withholding because they are subject to income tax
withholding by a foreign country)
General business credit Form 3800, General Business Credit
Mortgage interest credit Pub. 530, Tax Information for Homeowners
Qualified electric vehicle credit Form 8834
Credit for prior year minimum tax (if you paid alternative minimum tax in an Instructions for Form 8801
earlier year)
Retirement savings contributions credit (saver's credit) Pub. 590-A, Contributions to Individual Retirement Arrangements (IRAs)
Credit to holders of tax credit bonds Instructions for Form 8912
Premium tax credit Pub. 974, Premium Tax Credit (PTC)

able to claim, see the 2022 Instructions for Form W-4P includes four steps that will give Note. If you don't give Form W-4P to your
Form 1040. information to the payer of your pension or an- payer, you don't provide an SSN, or the IRS no-
nuity for how to figure your withholding. Com- tifies the payer that you gave an incorrect SSN,
Step 3 of Form W-4 provides instructions for plete Steps 2 through 4 only if they apply to you. then the payer will withhold tax from your pay-
determining the amount of the child tax credit ments as if your filing status is single with no ad-
and the credit for other dependents. You can Step 1. Enter your personal information, in- justments in Steps 2 through 4. For payments
also include other tax credits in Step 3 of Form cluding your anticipated filing status. Your an- that began before 2023, your current withhold-
W-4. To do so, complete Worksheet 1-6 and ticipated filing status will determine the stand- ing election (or your default rate) remains in ef-
add the amount from line 11 of that worksheet ard deduction and tax rates used to figure your fect unless you submit a new Form W-4P.
to the amount you are entering for other de- withholding.
pendents in Step 3 of Form W-4. Including And remember, this isn’t a final decision. If
these credits will increase your paycheck and Step 2. Complete this step if you (1) have in- you don’t get the correct amount of withholding
reduce the amount of any refund you may re- come from a job or more than one pension/ with the first Forms W-4 and W-4P you submit,
ceive when you file your tax return. annuity, and/or (2) are married filing jointly and you should refigure your withholding using the
your spouse receives income from a job or a information and worksheets in this publication,
pension/annuity. or the resources mentioned above.
When Will Your New Form W-4 Go
Into Effect? If you (or if married filing jointly, you
! and/or your spouse) have a job(s), You should go through this same process
CAUTION don't complete Steps 3 through 4b on each time your life situation changes, whether it
If the change is for the current year, your em-
Form W-4P. Instead, complete Steps 3 through be for personal or financial reasons. You may
ployer must put your new Form W-4 into effect
4b on the Form W-4 for the job. If you (or if mar- need more tax withheld, or you may need less.
no later than the start of the first payroll period
ried filing jointly, you and your spouse) don't
ending on or after the 30th day after the day on
have a job, complete Steps 3 through 4b on
which you give your employer your revised
Form W-4P for only the pension or annuity that Getting the Right Amount
Form W-4.
pays the most annually. Leave those steps of Tax Withheld
blank for the other pensions or annuities.
If the change is for next year, your new Form In most situations, the tax withheld from your
W-4 won’t take effect until next year.
Step 3. Complete this step if you have depend- pay will be close to the tax you figure on your
ents and think you may be eligible to claim the return if you follow these two rules.
Form W-4P child tax credit or credit for other dependents on • You accurately complete all the Form W-4
your tax return. Also, complete this step if you worksheets that apply to you.
When you first began receiving your pension, want to include an estimate of your other tax • You give your employer a new Form W-4
you told the payer how much tax to withhold, if credits (for example, an education credit or the when changes occur.
any, by completing Form W-4P, Withholding foreign tax credit).
Certificate for Pension or Annuity Payments (or But because the worksheets and withhold-
similar form). However, if your retirement pay is Step 4. Complete this optional step to make ing methods don’t account for all possible situa-
from the military or certain deferred compensa- other adjustments. tions, you may not be getting the right amount
tion plans, you completed Form W-4 instead of • Other estimated income (Step 4a). withheld. This is most likely to happen in the fol-
Form W-4P. You completed either form based • Deductions (other than the standard de- lowing situations.
on your projected income at that time. If you are duction)(Step 4b) you expect to claim. Use • You are married and both you and your
returning to the workforce, your new Form W-4 the Step 4(b)—Deductions Worksheet in spouse work.
(given to your employer) and your Form W-4 or the instructions for Form W-4P to help you • You have more than one job at a time.
W-4P (on file with your pension plan) must work determine the amount to enter on line 4b. • You have nonwage income, such as inter-
together to determine the correct amount of • Any additional amounts you want to with- est, dividends, alimony, or unemployment
withholding for your new amount of income. hold from each payment (Step 4c). compensation.

Chapter 1 Tax Withholding for 2023 Page 5

 • You will owe additional amounts with your To be eligible, your payroll periods (weekly, The IRS will provide a period of time during
return. biweekly, etc.) must have been the same since which you can dispute the determination before
• Your withholding is based on obsolete the beginning of the year. your employer adjusts your withholding. If you
Form W-4 information for a substantial part believe that you are entitled to claim complete
of the year. Aids for Figuring Your Withholding exemption from withholding or that the IRS de-
• You work only part of the year. termination was otherwise incorrect, you must
• You change the amount of your withhold- Tax Withholding Estimator. If you are con- submit a new Form W-4 and a written statement
ing during the year. cerned that you may be having too much or too to support your claims made on Form W-4 that
• You are subject to Additional Medicare Tax little income tax withheld from your pay, the IRS would decrease federal income tax withholding
or NIIT. If you anticipate liability for Addi- provides a withholding estimator on its website. to the IRS. Contact information (a toll-free num-
tional Medicare Tax or NIIT, you may re- Go to IRS.gov/W4App. It can help you deter- ber and an IRS office address) will be provided
quest that your employer withhold an addi- mine the correct amount to be withheld any time in the lock-in letter. At the end of this period, if
tional amount of income tax withholding on during the year. you haven’t responded or if your response isn’t
Form W-4. adequate, your employer will be required to
withhold based on the original lock-in letter.
If any of these situations apply to you, you Rules Your Employer After the lock-in letter takes effect, your em-
can use the Tax Withholding Estimator at
IRS.gov/W4App to see if you need to change
Must Follow ployer must withhold tax on the basis of the
your withholding. withholding rate (marital status) and maximum
It may be helpful for you to know some of the withholding specified in that letter.
If you have self-employment income or owe withholding rules your employer must follow. If you later believe that you are entitled to
self-employment tax, you should use the work- These rules can affect how to fill out your Form claim exemption from withholding or otherwise
sheets in this publication to determine if you W-4 and how to handle problems that may adjust your withholding, you can complete a
should pay estimated tax. arise. new Form W-4 and a written statement to sup-
port the claims made on the Form W-4 and
Part-Year Method New Form W-4. When you start a new job, send them directly to the IRS address shown on
your employer should give you a Form W-4 to the lock-in letter. Your employer must continue
If you work only part of the year and your em- fill out. Beginning with your first payday, your to figure your withholding on the basis previ-
ployer agrees to use the part-year withholding employer will use the information you give on ously determined by the IRS until the IRS advi-
method, less tax will be withheld from each the form to figure your withholding. ses your employer otherwise.
wage payment than would be withheld if you If you later fill out a new Form W-4, your em- At any time, either before or after the lock-in
worked all year. To be eligible for the part-year ployer can put it into effect as soon as possible. letter becomes effective, you may give your em-
method, you must meet both of the following re- The deadline for putting it into effect is the start ployer a new Form W-4 that does not claim
quirements. of the first payroll period ending 30 or more complete exemption from withholding and re-
• You must use the calendar year (the 12 days after you turn it in. sults in more income tax withheld than specified
months from January 1 through December in the lock-in letter. Your employer must then
31) as your tax year. You can’t use a fiscal No Form W-4. If you don't give your employer withhold tax based on this new Form W-4.
year. a Form W-4, your employer should treat you as Additional information is available at
• You must not expect to be employed for though you checked the box for Single or Mar- IRS.gov. Enter ``withholding compliance
more than 245 days during the year. To fig- ried filing separately in Step 1(c) and made no questions'' in the search box.
ure this limit, count all calendar days that entries in Step 2, Step 3, or Step 4 of the 2023
you are employed (including weekends, Form W-4.
vacations, and sick days) beginning with Exemption From Withholding
the first day you are on the job for pay and Repaying withheld tax. If you find you are
ending with your last day of work. If you are having too much tax withheld because you If you claim exemption from withholding, your
temporarily laid off for 30 days or less, didn’t account for all your dependents or deduc- employer won’t withhold federal income tax
count those days too. If you are laid off for tions you are entitled to, you should give your from your wages. The exemption applies only to
more than 30 days, don’t count those employer a new Form W-4. Your employer can’t income tax, not to social security or Medicare
days. You won’t meet this requirement if repay any of the tax previously withheld. In- tax.
you begin working before May 1 and ex- stead, claim the full amount withheld when you
pect to work for the rest of the year. file your tax return. You can claim exemption from withholding
However, if your employer has withheld for 2023 only if both of the following situations
How to apply for the part-year method. You more than the correct amount of tax for the apply.
must ask your employer in writing to use this Form W-4 you have in effect, you don’t have to • For 2022, you had a right to a refund of all
method. The request must state all three of the fill out a new Form W-4 to have your withholding federal income tax withheld because you
following. lowered to the correct amount. Your employer had no tax liability.
• The date of your last day of work for any can repay the amount that was withheld incor- • For 2023, you expect a refund of all federal
prior employer during the current calendar rectly. If you are not repaid, your Form W-2 will income tax withheld because you expect to
year. reflect the full amount actually withheld, which have no tax liability.
• That you don’t expect to be employed you would claim when you file your tax return.
more than 245 days during the current cal- Use Figure 1-A to help you decide whether
endar year. IRS review of your withholding. Your with- you can claim exemption from withholding.
• That you use the calendar year as your tax holding or any claim for a complete exemption Don’t use Figure 1-A if you:
year. from withholding is subject to review by the IRS. • Are 65 or older,
Your employer may be required to send a copy • Are blind,
Cumulative Wage Method of the Form W-4 to the IRS. There is a penalty • Will itemize deductions on your 2023 re-
for supplying false information on Form W-4. turn, or
If you change your withholding during the year, See Penalties, later. • Will claim any tax credits on your 2023 re-
too much or too little tax may have been with- If the IRS determines that you have oversta- turn.
held for the period before you made the ted your withholding or can’t claim a complete These situations are discussed later.
change. You may be able to compensate for exemption from withholding, the IRS will issue a
this if your employer agrees to use the cumula- notice that specifies the withholding arrange- Students. If you are a student, you are not au-
tive wage withholding method for the rest of the ment permitted for the employee (commonly re- tomatically exempt. If you work only part time or
year. You must ask your employer in writing to ferred to as a “lock-in letter”) to both you and during the summer, you may qualify for exemp-
use this method. your employer. tion from withholding.

Page 6 Chapter 1 Tax Withholding for 2023

 Figure 1-A. Exemption From Withholding on Form W-4
Note. Don’t use this chart if you are 65 or older or blind, or if you will itemize your deductions or claim tax credits. Instead, see
the discussions in this chapter under Exemption From Withholding. If none of these situations apply to you, but you have
adjustments to income, use the 2024 Estimated Tax Worksheet.

Start Here

For 2023, did you have a

right to a refund of ALL No You CAN’T claim
federal income tax withheld exemption from
because you had NO tax withholding.
liability?

Yes Yes

Will your 2024 total income be more than the amount shown below for
your filing status?

Single $
For 2024, will
someone (such as Head of household
No
your parent) be able Married filing separately for
to claim you as a BOTH 2023 and 2024
dependent? Other married status (include BOTH
spouses’ income whether filing
separately or jointly)
Yes
Qualifying surviving spouse

Will your 2024 income No No

be more than $1,250?

Yes

Will your 2024 income

include more than $400 Yes You CAN’T claim You CAN claim
of unearned income exemption from exemption from
(interest, dividends, etc.)? withholding. withholding.

No No

Will your 2024 total income be

$13,850 or less?
Yes

Example 1. You are a high school student more than $400 and your total income will be Itemizing deductions or claiming credits. If
and expect to earn $2,500 from a summer job. more than $1,250. you had no tax liability for 2022, and you will:
You don’t expect to have any other income dur-
You may have to file a tax return, even
• Itemize deductions, or
ing the year, and your parents will be able to
if you are exempt from withholding.
• Claim a tax credit,
claim you as a dependent on their tax return. !
CAUTION See Pub. 501 to see whether you must use Worksheet 2-1 (also, see chapter 2) to fig-
You worked last summer and had $375 federal
file a return. ure your 2023 expected tax liability. You can
income tax withheld from your pay. The entire claim exemption from withholding only if your
$375 was refunded when you filed your 2022
Age 65 or older or blind. If you are 65 total expected tax liability (line 11c of the work-
return. Using Figure 1-A, you find that you can
or older or blind, use Worksheet 1-1 or sheet) is zero.
claim exemption from withholding.
Worksheet 1-2 to help you decide
whether you can claim exemption from with- Claiming exemption from withholding. To
Example 2. The facts are the same as in
holding. Don’t use either worksheet if you will claim exemption, you must give your employer
Example 1, except that you also have a savings
itemize deductions or claim tax credits on your a Form W-4. Write “Exempt” on the form in the
account and expect to have $400 interest in-
2023 return. Instead, see Itemizing deductions space below Step 4(c) and complete Steps
come during the year. Using Figure 1-A, you
or claiming credits next. 1(a), 1(b), and 5. Don’t complete any other
find that you can’t claim exemption from with- steps.
holding because your unearned income will be

Chapter 1 Tax Withholding for 2023 Page 7

 If you claim exemption, but later your situa- Expense allowances. Reimbursements or • You must return any excess reimburse-
tion changes so that you will have to pay in- other expense allowances paid by your em- ment or allowance within a reasonable pe-
come tax after all, you must file a new Form ployer under a nonaccountable plan are treated riod of time.
W-4 within 10 days after the change. If you as supplemental wages. A nonaccountable plan An excess reimbursement or allowance is
claim exemption in 2023 but you expect to owe is a reimbursement arrangement that does not any amount you are paid that is more than the
income tax for 2024, you must file a new Form require you to account for, or prove, your busi- business-related expenses that you adequately
W-4 by December 1, 2023. ness expenses to your employer or does not re- accounted for to your employer.
Your claim of exempt status may be re- quire you to return your employer's payments
The definition of reasonable period of time
viewed by the IRS. See IRS review of your with- that are more than your proven expenses.
depends on the facts and circumstances of
holding, earlier. Reimbursements or other expense allowan- your situation. However, regardless of those
ces paid under an accountable plan that are
An exemption is good for only 1 year. facts and circumstances, actions that take
more than your proven expenses are treated as
You must give your employer a new Form W-4 place within the times specified in the following
paid under a nonaccountable plan if you don’t
by February 15 each year to continue your ex- list will be treated as taking place within a rea-
return the excess payments within a reasonable
emption. sonable period of time.
period of time.
• You receive an advance within 30 days of
the time you have an expense.
Supplemental Wages Accountable plan. To be an accountable
• You adequately account for your expenses
plan, your employer's reimbursement or allow-
within 60 days after they were paid or in-
Supplemental wages include bonuses, commis- ance arrangement must include all three of the
curred.
sions, overtime pay, vacation allowances, cer- following rules.
• You return any excess reimbursement
tain sick pay, and expense allowances under • Your expenses must have a business con- within 120 days after the expense was paid
certain plans. The payer can figure withholding nection. That is, you must have paid or in-
or incurred.
on supplemental wages using the same method curred deductible expenses while perform-
ing services as an employee of your
• You are given a periodic statement (at
used for your regular wages. However, if these least quarterly) that asks you to either re-
payments are identified separately from regular employer.
turn or adequately account for outstanding
wages, your employer or other payer of supple- • You must adequately account to your em- advances and you comply within 120 days
mental wages can withhold income tax from ployer for these expenses within a reason-
of the statement.
these wages at a 22% flat rate under certain cir- able period of time.
cumstances as explained in the section on sup-
plemental wages in Pub. 15.

Page 8 Chapter 1 Tax Withholding for 2023

Nonaccountable plan. Any plan that does not If you don’t give your employer money to value of any benefits paid in November and De-
meet the definition of an accountable plan is cover the shortage, your employer first with- cember of 2022 to the value of any benefits
considered a nonaccountable plan. holds as much Medicare tax and social security paid in January through October of 2023.
or railroad retirement tax as possible, up to the
For more information about accountable and Exceptions. Your employer can’t choose
proper amount, and then withholds income tax
nonaccountable plans, see chapter 6 of Pub. when to withhold tax on the transfer of either
up to the full amount of your pay. If not enough
463, Travel, Entertainment, Gift, and Car Ex- real property or personal property of a kind nor-
tax is withheld, you may have to pay estimated
penses. mally held for investment (such as stock). Your
tax. When you file your return, you may also
have to pay any Medicare and social security employer must withhold tax on these benefits at
Penalties tax or railroad retirement tax your employer the time of the transfer.
could not withhold.
How withholding is figured. Your employer
You may have to pay a penalty of $500 if both
Tips not reported to your employer. On can either add the value of a fringe benefit to
of the following apply.
your regular pay and figure income tax with-
• You make statements on your Form W-4 your tax return, you must report all the tips you
holding on the total or withhold a flat 22% of the
that reduce the amount of tax withheld. receive during the year, even tips you don’t re-
benefit's value.
• You have no reasonable basis for those port to your employer (this includes the value of
statements at the time you prepare your any noncash tips you received, such as tickets, If the benefit's actual value can’t be deter-
Form W-4. passes, or other items of value). Make sure you mined when it is paid or treated as paid, your
are having enough tax withheld, or are paying employer can use a reasonable estimate. Your
There is also a criminal penalty for willfully enough estimated tax (see chapter 2), to cover employer must determine the actual value of
supplying false or fraudulent information on all your tip income. the benefit by January 31 of the next year. If the
your Form W-4 or for willfully failing to supply in- actual value is more than the estimate, your em-
formation that would increase the amount with- Allocated tips. If you work in a large food or ployer must pay the IRS any additional with-
held. The penalty upon conviction can be either beverage establishment, your employer may holding tax required. Your employer has until
a fine of up to $1,000 or imprisonment for up to have to report an allocated amount of tips on April 1 of that next year to recover from you the
1 year, or both. your Form W-2. additional income tax paid to the IRS for you.
These penalties will apply if you deliberately Your employer should not withhold income
tax, Medicare tax, and social security or railroad How your employer reports your benefits.
and knowingly falsify your Form W-4 in an at-
retirement tax on the allocated amount. With- Your employer must report on Form W-2 the to-
tempt to reduce or eliminate the proper with-
holding is based only on your pay plus your re- tal of the taxable fringe benefits paid or treated
holding of taxes. A simple error or an honest
ported tips. Your employer should refund to you as paid to you during the year and the tax with-
mistake won’t result in one of these penalties.
any incorrectly withheld tax. held for the benefits. These amounts can be
shown either on the Form W-2 for your regular

Tips More information. For more information on

the reporting and withholding rules for tip in-
pay or on a separate Form W-2. If your em-
ployer provided you with a car, truck, or other
come and on tip allocation, see Pub. 531, Re- motor vehicle and chose to treat all of your use
The tips you receive while working on your job of it as personal, its value must be either sepa-
porting Tip Income.
are considered part of your pay. You must in- rately shown on Form W-2 or reported to you on
clude your tips on your tax return on the same a separate statement.
line as your regular pay. However, tax isn’t with-
held directly from tip income, as it is from your Taxable Fringe Benefits More information. For information on fringe
regular pay. Nevertheless, your employer will benefits, see Fringe Benefits under Employee
take into account the tips you report when figur- The value of certain noncash fringe benefits you Compensation in Pub. 525, Taxable and Non-
ing how much to withhold from your regular pay. receive from your employer is considered part taxable Income.
of your pay. Your employer must generally with-
Reporting tips to your employer. If you re- hold income tax on these benefits from your
ceive tips of $20 or more in a month while work-
ing for any one employer, you must report to
regular pay.
Sick Pay
Although the value of your personal use of
your employer the total amount of tips you re- an employer-provided car, truck, or other high- Sick pay is a payment to you to replace your
ceive on the job during the month. The report is way motor vehicle is taxable, your employer can regular wages while you are temporarily absent
due by the 10th day of the following month. choose not to withhold income tax on that from work due to sickness or personal injury. To
If you have more than one job, make a sepa- amount. Your employer must notify you if this qualify as sick pay, it must be paid under a plan
rate report to each employer. Report only the choice is made. to which your employer is a party.
tips you received while working for that em-
ployer, and only if they total $20 or more for the When benefits are considered paid. Your If you receive sick pay from your employer
month. employer can choose to treat a fringe benefit as or an agent of your employer, income tax must
paid by the pay period, by the quarter, or on be withheld. An agent who does not pay regular
How employer figures amount to withhold. some other basis as long as the benefit is con- wages to you may choose to withhold income
The tips you report to your employer are coun- sidered paid at least once a year. Your em- tax at a flat rate.
ted as part of your income for the month you re- ployer can treat the benefit as being paid on
port them. Your employer can figure your with- one or more dates during the year, even if you However, if you receive sick pay from a third
holding in either of two ways. get the entire benefit at one time. party who isn’t acting as an agent of your em-
• By withholding at the regular rate on the ployer, income tax will be withheld only if you
sum of your pay plus your reported tips. Special rule. Your employer can choose to choose to have it withheld. See Form W-4S,
• By withholding at the regular rate on your treat a benefit provided during November or De- later.
pay plus a percentage of your reported cember as paid in the next year. Your employer
tips. must notify you if this rule is used. If you receive payments under a plan in
which your employer does not participate (such
Not enough pay to cover taxes. If your regu- Example. Your employer considers the as an accident or health plan where you paid all
lar pay isn’t enough for your employer to with- value of benefits paid from November 1, 2021, the premiums), the payments are not sick pay
hold all the tax (including income tax and social through October 31, 2022, as paid to you in and are usually not taxable.
security and Medicare taxes (or the equivalent 2022. To determine the total value of benefits
railroad retirement tax)) due on your pay plus paid to you in 2023, your employer will add the Union agreements. If you receive sick pay un-
your tips, you can give your employer money to der a collective bargaining agreement between
cover the shortage. your union and your employer, the agreement

Chapter 1 Tax Withholding for 2023 Page 9

may determine the amount of income tax with- Form W-4P, earlier, to fill out your 2023 Form You may need to use Form W-4R to
holding. See your union representative or your W-4P. ! ask for additional withholding. If you
employer for more information. CAUTION don’t have enough tax withheld, you

Note. Use Form W-4, not Form W-4P, if may need to pay estimated tax, as explained in
Form W-4S. If you choose to have income tax you receive any of the following. chapter 2.
withheld from sick pay paid by a third party, • Military retirement pay.
such as an insurance company, you must fill out • Payments from certain nonqualified defer-
Form W-4S. Its instructions contain a worksheet red compensation plans. These are em- Eligible Rollover
you can use to figure the amount you want with- ployer plans that pay part of your compen- Distributions
held. They also explain restrictions that may ap- sation at a later time, but are not
ply. tax-qualified deferred compensation plans. A distribution you receive that is eligible to be
Give the completed form to the payer of your See Nonqualified Deferred Compensation rolled over tax free into a qualified retirement or
sick pay. The payer must withhold according to and Section 457 Plans in Pub. 957, Re- annuity plan is called an eligible rollover distri-
your directions on the form. porting Back Pay and Special Wage Pay- bution (ERD). This is the taxable part of any dis-
Form W-4S remains in effect until you ments to the Social Security Administra- tribution from a qualified pension plan or
change or cancel it, or stop receiving payments. tion. tax-sheltered annuity that isn’t any of the follow-
You can change your withholding by giving a ing.
new Form W-4S or a written notice to the payer Withholding rules. The withholding rules for
of your sick pay. pensions and annuities differ from those for sal- 1. A required minimum distribution.
aries and wages in the following ways. 2. One of a series of substantially equal peri-
Estimated tax. If you don’t request withholding • If a 2023 Form W-4P is used for withhold- odic pension or annuity payments made
on Form W-4S, or if you don’t have enough tax ing for payments beginning in 2023, and over:
withheld, you may have to pay estimated tax. If you don't fill out a withholding certificate,
you don’t pay enough tax, either through esti- tax will be withheld as if your filing status is a. Your life (or your life expectancy) or
mated tax or withholding, or a combination of single with no adjustments made in Steps the joint lives of you and your benefi-
both, you may have to pay a penalty. See chap- 2 through 4. ciary (or your life expectancies), or
ter 2. • You can choose not to have tax withheld, b. A specified period of 10 or more
regardless of how much tax you owed last years.
year or expect to owe this year. You don’t
Pensions and Annuities have to qualify for exemption. See Choos-
ing Not To Have Income Tax Withheld,
3. A hardship distribution.
The payer of a distribution must withhold at
later.
Income tax will usually be withheld from your a flat 20% rate on any part of an ERD that is dis-
pension or annuity distributions unless you
• If a 2023 Form W-4P is used for withhold- tributed rather than rolled over directly to an-
ing for payments beginning in 2023, and
choose not to have it withheld. This rule applies other qualified plan. Withholding on these distri-
you don't give the payer your SSN in the
to distributions from: butions is mandatory. You may choose a rate
required manner or the IRS notifies the
• An IRA; payer before any payment or distribution is
higher than 20% by entering it on line 2 of Form
• A life insurance company under an endow- made that you gave an incorrect SSN, tax
W-4R. Don't give Form W-4R to your payer un-
ment, annuity, or life insurance contract; less you want more than 20% withheld.
will be withheld as if your filing status is sin-
• A pension, annuity, or profit-sharing plan; gle with no adjustments in Steps 2 through
• A stock bonus plan; and
• Any other plan that defers the time you re-
4. Choosing Not To Have
ceive compensation. Income Tax Withheld
Effective date of withholding certificate. If
you give your withholding certificate (Form
The amount withheld depends on whether For payments other than eligible rollover distri-
W-4P or a similar form) to the payer on or be-
you receive payments spread out over more butions, you can choose not to have income tax
fore the date your payments start, it will be put
than 1 year (periodic payments), within 1 year withheld. The payer will tell you how to make
into effect by the first payment made more than
(nonperiodic payments), or as an eligible roll- this choice. If you use Form W-4R, enter “-0-”
30 days after you submit the certificate.
over distribution (ERD). Income tax withholding on line 2 to choose not to have withholding.
from an ERD is mandatory. ERDs are dis- If you give the payer your certificate after This choice will remain in effect until you decide
cussed under Eligible Rollover Distributions, your payments start, it will be put into effect with you want withholding and inform the payer. See
later. the first payment, which is at least 30 days after Revoking a choice not to have tax withheld,
you submit it. However, the payer can elect to later.
Nontaxable part. The part of your pension or put it into effect earlier.
annuity that is a return of your investment in The payer must withhold if either of the fol-
your retirement plan (the amount you paid into Nonperiodic Payments lowing applies.
• You don’t give the payer your SSN in the
the plan or its cost to you) isn’t taxable. Income
tax won’t be withheld from the part of your pen- required manner.
Tax will be withheld at a flat 10% rate on any
sion or annuity that isn’t taxable. The tax with- nonperiodic payments you receive, unless you • The IRS notifies the payer, before any pay-
held will be figured on, and can’t be more than, ment or distribution is made, that you gave
choose a different withholding rate.
the taxable part. it an incorrect SSN.
For information about figuring the part of Use Form W-4R, line 2, to choose a with-
holding rate other than the default 10% rate. If you don’t have any income tax withheld
your pension or annuity that isn’t taxable, see from your pension or annuity, or if you don’t
Pub. 575, Pension and Annuity Income. You can choose a rate between 0% and 100%.
You can choose to have no federal income tax have enough withheld, you may have to pay es-
withheld by entering “-0-” on line 2. Generally, timated tax. See chapter 2.
Periodic Payments you can't choose less than 10% for payments to If you don’t pay enough tax, either through
be delivered outside of the United States and its estimated tax or withholding, or a combination
Withholding from periodic payments of a pen- possessions. If you want to revoke a choice not of both, you may have to pay a penalty.
sion or annuity is figured similarly to withholding to have tax withheld, see Choosing Not To
from certain salaries and wages. To tell the Have Income Tax Withheld, later. Payments delivered outside the United
payer of your pension or annuity how much you States. You must generally have tax withheld
want withheld, fill out Form W-4P or a similar from pension or annuity benefits delivered out-
form provided by the payer. Follow instructions side the United States. However, if you are a
for Form W-4P and the rules discussed under U.S. citizen or resident alien, you can choose

Page 10 Chapter 1 Tax Withholding for 2023

not to have tax withheld if you give the payer of • Whether someone else is entitled to any Act of 1988 that are treated as insurance
the benefits a home address in the United part of the winnings subject to withholding. proceeds and that you received because:
States or in a U.S. possession. The payer must If so, you must complete Form 5754,
a. Your crops were destroyed or dam-
withhold tax if you provide a U.S. address for a Statement by Person(s) Receiving Gam-
aged by drought, flood, or any other
nominee, trustee, or agent to whom the benefits bling Winnings, and return it to the payer.
natural disaster; or
are to be delivered, but don’t provide your own The payer will use it to prepare a Form
home address in the United States or in a U.S. W-2G for each of the winners. b. You were unable to plant crops be-
possession. cause of a natural disaster described
Identical wagers. You may have to give in (a).
Notice required of payer. The payer of your the payer a statement of the amount of your
winnings, if any, from identical wagers. If this 5. Dividends and other distributions from
pension or annuity must send you a notice tell-
statement is required, the payer will ask you for Alaska Native Corporations to their share-
ing you about your right to choose not to have
it. You provide this statement by signing Form holders.
tax withheld.
Generally, the payer won’t send a notice to W-2G or, if required, Form 5754. 6. Any other payment under federal law as
Identical wagers include two bets placed in determined by the Secretary.
you if it is reasonable to believe that the entire
a pari-mutuel pool on one horse to win a partic-
amount you will be paid isn’t taxable.
ular race. However, the bets are not identical if To make this choice, fill out Form W-4V (or a
Revoking a choice not to have tax withheld. one bet is “to win” and one bet is “to place.” In similar form provided by the payer) and give it
The payer of your pension or annuity will tell addition, they are not identical if the bets were to the payer.
you how to revoke your choice not to have in- placed in different pari-mutuel pools. For exam-
ple, a bet in a pool conducted by the racetrack If you don’t choose to have income tax with-
come tax withheld from periodic or nonperiodic held, you may have to pay estimated tax. See
payments. You can tell the payer exactly how and a bet in a separate pool conducted by an
offtrack betting establishment in which the bets chapter 2.
much to withhold by completing a new Form
W-4P for periodic payments or Form W-4R for are not pooled with those placed at the track If you don’t pay enough tax, either through
nonperiodic payments. are not identical wagers. withholding or estimated tax, or a combination
of both, you may have to pay a penalty.
Backup withholding on gambling winnings.
Gambling Winnings If you have any kind of gambling winnings and
don’t give the payer your SSN, the payer may
More information. For more information about
the tax treatment of social security and railroad
have to withhold income tax at a flat 24% rate. retirement benefits, see Pub. 915, Social Secur-
Income tax is withheld at a flat 24% rate from This rule also applies to winnings of at least
certain kinds of gambling winnings. ity and Equivalent Railroad Retirement Benefits.
$1,200 from bingo or slot machines or $1,500 Get Pub. 225, Farmer's Tax Guide, for informa-
from keno, and to certain other gambling win- tion about the tax treatment of commodity credit
Gambling winnings of more than $5,000 nings of at least $600.
from the following sources are subject to in- corporation loans or crop disaster payments.
come tax withholding.
Payment to shareholders of Alaska Native
• Any sweepstakes; wagering pool, includ-
ing payments made to winners of poker
Unemployment Corporations (ANCs). If you are a share-
tournaments; or lottery. Compensation holder of an ANC, you can request to have in-
come tax withheld from dividends and other dis-
• Any other wager if the proceeds are at
least 300 times the amount of the bet. tributions you receive from the ANC. To make
You can choose to have income tax withheld this request, fill out Form W-4V (or a similar
It does not matter whether your winnings are from unemployment compensation. To make form provided by the payer) and give it to the
paid in cash, in property, or as an annuity. Win- this choice, fill out Form W-4V (or a similar form payer. A request for withholding isn’t effective
nings not paid in cash are taken into account at provided by the payer) and give it to the payer. until the ANC indicates in writing that it accepts
their fair market value. All unemployment compensation is taxable. the request or begins withholding. Contact the
So, if you don’t have income tax withheld, you payer if it isn’t clear that the payer has accepted
Exception. Gambling winnings from bingo,
may have to pay estimated tax. See chapter 2. your Form W-4V.
keno, and slot machines are generally not sub-
ject to income tax withholding. However, you If you don’t pay enough tax, either through If you don’t choose to have income tax with-
may need to provide the payer with an SSN to withholding or estimated tax, or a combination held, or the ANC doesn’t accept your request,
avoid withholding. See Backup withholding on of both, you may have to pay a penalty. you may have to pay estimated tax. See chap-
gambling winnings, later. If you receive gam- ter 2.
bling winnings not subject to withholding, you Form 1099-G. If you receive $10 or more in If you don’t pay enough tax, either through
may need to pay estimated tax. See chapter 2. unemployment compensation, you will receive withholding or estimated tax, or a combination
a Form 1099-G, Certain Government Pay- of both, you may have to pay a penalty.
If you don’t pay enough tax, either through ments. Box 1 will show the amount of unem-
withholding or estimated tax, or a combination ployment compensation you got for the year.
of both, you may have to pay a penalty. Box 4 will show the amount of federal income Backup Withholding
tax withheld, if any.
Form W-2G. If a payer withholds income tax Banks or other businesses that pay you certain
from your gambling winnings, you should re- kinds of income must file an information return
ceive a Form W-2G, Certain Gambling Win- Federal Payments (Form 1099) with the IRS. The information re-
nings, showing the amount you won and the turn shows how much you were paid during the
amount withheld. You can choose to have income tax withheld year. It also includes your name and taxpayer
Report the tax withheld on your 2023 Form from certain federal payments you receive. identification number (TIN). TINs are explained
1040 or 1040-SR, along with all other federal in- These payments are the following. later in this discussion.
come tax withheld, as shown on Forms W-2
and 1099. 1. Social security benefits. These payments are generally not subject to
withholding. However, “backup” withholding is
2. Tier 1 railroad retirement benefits.
Information to give payer. If the payer asks, required in certain situations.
you must give the payer all the following infor- 3. Commodity credit corporation loans you
mation. choose to include in your gross income. Payments subject to backup withholding.
• Your name, address, and SSN. Backup withholding can apply to most kinds of
4. Payments under the Agricultural Act of
• Whether you made identical wagers (ex- 1949 (7 U.S.C. 1421 et seq.), as amen-
plained below). ded, or title II of the Disaster Assistance

Chapter 1 Tax Withholding for 2023 Page 11

payments that are reported on Form 1099. also certify (under penalties of perjury) that your payer your correct name and TIN. You must
These include: TIN is correct and that you are not subject to certify that the TIN you give is correct.
• Interest payments (Form 1099-INT); backup withholding. However, the payer will provide additional
• Government payments (Form 1099-G); The payer must withhold at a flat 24% rate in instructions if the TIN you gave needs to be vali-
• Dividends (Form 1099-DIV); the following situations. dated by the Social Security Administration or
• Patronage dividends, but only if at least • You don’t give the payer your TIN in the re- by the IRS. This may happen if both the follow-
half the payment is in money (Form quired manner. ing conditions exist.
1099-PATR); • The IRS notifies the payer that the TIN you 1. The IRS notifies the payer twice within 3
• Rents, profits, or other gains (Form gave is incorrect.
calendar years that a TIN you gave for the
1099-MISC); • You are required, but fail, to certify that you same account is incorrect.
• Commissions, fees, or other payments for are not subject to backup withholding.
work you do as an independent contractor • The IRS notifies the payer to start withhold- 2. The incorrect TIN is still being used on the
(Form 1099-NEC); ing on interest or dividends because you account when the payer receives the sec-
• Payments by brokers (Form 1099-B); have underreported interest or dividends ond notice.
• Payments by fishing boat operators, but on your income tax return. The IRS will do
only the part that is in money and that rep- this only after it has mailed you four notices Underreported interest or dividends. If
resents a share of the proceeds of the over at least a 210-day period. you have been notified that you underreported
catch (Form 1099-MISC); and interest or dividends, you must request and re-
• Royalty payments (Form 1099-MISC). Taxpayer identification number (TIN). ceive a determination from the IRS to prevent
Your TIN is one of the following three numbers. backup withholding from starting or to stop
Backup withholding may also apply to gambling • An SSN. backup withholding once it has begun. Your re-
winnings. See Backup withholding on gambling • An employer identification number (EIN). quest must show that at least one of the follow-
winnings under Gambling Winnings, earlier. • An IRS individual taxpayer identification ing situations applies.
number (ITIN). Aliens who don’t have an • No underreporting occurred.
Payments not subject to backup withhold- SSN and are not eligible to get one should • You have a bona fide dispute with the IRS
ing. Backup withholding does not apply to pay- get an ITIN. Use Form W-7, Application for about whether an underreporting occurred.
ments reported on Form 1099-MISC (other than IRS Individual Taxpayer Identification • Backup withholding will cause or is caus-
payments by fishing boat operators and royalty Number, to apply for an ITIN. ing an undue hardship and it is unlikely that
payments) unless at least one of the following you will underreport interest and dividends
three situations applies. An ITIN is for federal tax use only. It does
not entitle you to social security benefits or in the future.
• The amount you receive from any one • You have corrected the underreporting by
payer is $600 or more. change your employment or immigration status
under U.S. law. For more information on ITINs, filing an original return if you didn’t previ-
• The payer had to give you a Form 1099 ously file one, or by filing an amended re-
last year. see Pub. 1915, Understanding Your IRS Indi-
vidual Taxpayer Identification Number. turn, and by paying all taxes, penalties,
• The payer made payments to you last year and interest due for any underreported in-
that were subject to backup withholding. If you were assigned an ITIN before terest or dividend payments.
Form 1099 and backup withholding are gen- ! January 1, 2013, or if you have an ITIN
If the IRS determines that backup withhold-
erally not required for a payment of less than CAUTION that you haven’t included on a tax re-
ing should stop, it will provide you with certifica-
$10. turn in the last 3 consecutive years, you may
tion and will notify the payers who were sent no-
need to renew it. For more information, see the
tices earlier.
Withholding rules. When you open a new ac- Instructions for Form W-7.
count, make an investment, or begin to receive Penalties. There are civil and criminal penal-
payments reported on Form 1099, the bank or How to prevent or stop backup withholding. ties for giving false information to avoid backup
other business will give you Form W-9, Request If you have been notified by a payer that the TIN withholding. The civil penalty is $500. The crimi-
for Taxpayer Identification Number and Certifi- you gave is incorrect, you can usually prevent nal penalty, upon conviction, is a fine of up to
cation, or a similar form. You must enter your backup withholding from starting or stop backup $1,000 or imprisonment of up to 1 year, or both.
TIN on the form and, if your account or invest- withholding once it has begun by giving the
ment will earn interest or dividends, you must

Worksheets for Chapter 1

Use the following worksheets to figure your correct withholding and adjustments.

Use... To...
Worksheet 1-1 and Figure your total expected income for 2023 to determine if you are exempt from withholding. Use Worksheet
Worksheet 1-2 1-1 if, in 2022, you had a right to a refund of all federal income tax withheld because of no tax liability. Use
Exemption From Withholding for Worksheet 1-2 if you are a dependent for 2023 and, for 2022, you had a refund of all federal income tax
Persons/Dependents Age 65 or withheld because of no tax liability.
Older or Blind
Worksheet 1-3 Project the taxable income you will have for 2023 and figure the amount of tax you will have to pay on that
Projected Tax for 2023 income.
Worksheet 1-4 Figure the amount of tax on your projected taxable income.
Tax Computation Worksheets for
2023
Worksheet 1-5 Project the amount of federal income tax that you will have withheld in 2023, compare your projected
Projected Withholding for 2023 withholding with your projected tax, and determine whether the amount withheld each payday should be
adjusted.
Worksheet 1-6 Figure any extra amount to include in Step 3 of Form W-4 or Form W-4P to account for your projected tax
Tax Credits for 2023 Form W-4 or credits that are not otherwise taken into consideration.
Form W-4P

Page 12 Chapter 1 Tax Withholding for 2023

Worksheet 1-1. Exemption From Withholding for Persons Age 65 or Older or Blind
Use this worksheet only if, for 2022, you had a right to a refund of all federal income tax withheld because you had no tax liability.

Caution. This worksheet does not apply if you can be claimed as a dependent. See Worksheet 1-2 instead.

1. Check the boxes below that apply to you.

65 or older Blind
2. Check the boxes below that apply to your spouse’s standard deduction.*
65 or older Blind
3. Add the number of boxes you checked in
1 and 2 above. Enter the result . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

You can claim exemption from withholding if:

and your 2023
total income will
Your filing status is: and the number on line 3 above is: be no more than:
Single 1 $15,700
2 17,550
Head of 1 $22,650
household 2 24,500
Married filing 1 $15,350
separately for 2 16,850
both 2022 and 3 18,350
2023 4 19,850
Other married 1 $29,200**
status 2 30,700**
3 32,200**
4 33,700**
** Include both spouses' income whether you will file separately or jointly.
Qualifying 1 $29,200
surviving spouse 2 30,700
You can’t claim exemption from withholding if your total income will be more than the amount shown for your filing status.
* You can check the appropriate boxes for your spouse if your filing status is married filing jointly. You can check the appropriate boxes for your spouse if your filing
status is married filing separately and your spouse had no income, isn't filing a return, and can't be claimed as a dependent on another person's return.

Worksheet 1-2. Exemption From Withholding for Dependents Age 65 or Older or Blind
Use this worksheet only if, for 2023, you are a dependent and if, for 2022, you had a right to a refund of all federal income tax withheld because you
had no tax liability.

1. Enter your expected earned income plus $400 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.

2. Minimum amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. $ 1,250

3. Compare lines 1 and 2. Enter the larger amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.

4. Limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. 13,850

5. Compare lines 3 and 4. Enter the smaller amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.

6. Enter the appropriate amount from the following table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.
Single
Either 65 or older or blind $1,850
Both 65 or older and blind 3,700
Married filing separately
Either 65 or older or blind 1,500
Both 65 or older and blind 3,000
7. Add lines 5 and 6. Enter the result . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
8. Enter your total expected income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.

You can claim exemption from withholding if line 7 is equal to or more than line 8. You can’t claim exemption from withholding if line 8 is more than
line 7.

Chapter 1 Tax Withholding for 2023 Page 13

Worksheet 1-3. Projected Tax for 2023 Keep for Your Records

.
Use this worksheet to figure your projected tax for 2023. Note. Enter combined amounts if married filing jointly.

1. Enter amount of adjusted gross income (AGI) you expect in 2023. (To determine this, you may want to start with
the AGI on your last year's return, and add or subtract your expected changes. Also, take into account items listed
under What's New for 2023, earlier.)
Note. If self-employed, first complete Worksheet 2-3 to figure your expected deduction for self-employment tax.
Subtract the amount from Worksheet 2-3, line 11, to figure the line 1 entry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
2. If you:
• Don’t plan to itemize deductions on Schedule A (Form 1040), use Worksheet 2-4 to figure your expected
standard deduction.
• Plan to itemize deductions, enter the amount of your estimated itemized deductions.
• Qualify for the deduction for qualified business income, enter the estimated amount of the deduction you are
allowed on your qualified business income from a qualified trade or business. Add this amount to your expected
standard deduction or estimated itemized deductions and enter the total here . . . . . . . . . . . . . . . . . . . . . . . . 2.

3. Expected taxable income. Subtract line 2 from line 1. (If zero or less, enter -0- here and on line 4,
then go to line 5.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
4. If the amount on line 1:
• Doesn’t include a net capital gain or qualified dividends and you didn’t exclude foreign earned income or
exclude or deduct foreign housing in arriving at the amount on line 1, use Worksheet 1-4 to figure the tax to
enter here.
• Includes a net capital gain or qualified dividends, use Worksheet 2-5 to figure the tax to enter here.
• Was figured by excluding foreign earned income or excluding or deducting foreign housing, use
Worksheet 2-6 to figure the tax to enter here . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5. Enter any expected additional taxes from an election to report your child's interest and dividends, lump-sum
distributions (Form 4972), and alternative minimum tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.
6. Add lines 4 and 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.
7. Enter the amount of any expected tax credits. See Table 1-2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
8. Subtract line 7 from line 6 (if zero or less, enter -0-) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.
9. Self-employment tax. Enter the amount from Worksheet 2-3, line 10. (If you expect to file jointly and both of you
are self-employed, figure the self-employment tax for each of you separately and enter the total on line 9.) . . . . . 9.
10. Enter the total of any other expected taxes* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.
11. Projected tax for 2023. Add lines 8 through 10. Enter the total here and on Worksheet 1-5, line 1 . . . . . . . . . . . 11.

* Use the 2022 Instructions for Form 1040 to determine if you expect to owe, for 2023, any of the taxes that would have been entered on
your 2022 Schedule 2 (Form 1040), lines 7 through 17z.

Page 14 Chapter 1 Tax Withholding for 2023

Worksheet 1-4. Tax Computation Worksheets for 2023 Keep for Your Records
Note. If you are figuring the tax on an amount from Worksheet 2-5 (line 1 or 14), or Worksheet 2-6 (line 2 or 3), enter the
amount from that worksheet in column (a) of the row that applies to that amount of income. Enter the result on the
appropriate line of the worksheet you are completing.
a. Single. Use this worksheet to figure the amount to enter on Worksheet 1-3, line 4, if you expect your filing status for 2023 to be Single.

Expected Taxable (a) (b) (c) (d) (e)

Income Enter amount Multiplication amount Multiply Subtraction Subtract (d) from (c). Enter the result
from (a) by (b) amount here and on Worksheet 1-3, line 4*
If Worksheet 1-3,
Worksheet 1-3,
line 3* is —
line 3*
Over But not
over
$0 $11,000 × 10% (0.10) $0
11,000 44,725 × 12% (0.12) 220.00
44,725 95,375 × 22% (0.22) 4,692.50
95,375 182,100 × 24% (0.24) 6,600.00
182,100 231,250 × 32% (0.32) 21,168.00
231,250 578,125 × 35% (0.35) 28,105.50
578,125 ----- × 37% (0.37) 39,668.00
* If you are using Worksheet 2-5, for column (a) above, use the amount from line 1 or line 14 and enter the result (from column (e)) on line 37 or
line 39, as appropriate.
If you are using Worksheet 2-6, for column (a) above, use the amount from line 2 or line 3 and enter the result (from column (e)) on line 4 or line 5,
as appropriate.

b. Head of Household. Use this worksheet to figure the amount to enter on Worksheet 1-3, line 4, if you expect your filing status for 2023
to be Head of Household.

Expected Taxable (a) (b) (c) (d) (e)

Income Enter amount Multiplication Multiply Subtraction Subtract (d) from (c). Enter the result
from amount (a) by (b) amount here and on Worksheet 1-3, line 4*
If Worksheet 1-3,
Worksheet 1-3,
line 3* is —
line 3*
Over But not
over
$0 $15,700 × 10% (0.10) $0
15,700 59,850 × 12% (0.12) 314.00
59,850 95,350 × 22% (0.22) 6,299.00
95,350 182,100 × 24% (0.24) 8,206.00
182,100 231,250 × 32% (0.32) 22,774.00
231,250 578,100 × 35% (0.35) 29,711.50
578,100 ----- × 37% (0.37) 41,273.50
* If you are using Worksheet 2-5, for column (a) above, use the amount from line 1 or line 14 and enter the result (from column (e)) on
line 37 or line 39, as appropriate.
If you are using Worksheet 2-6, for column (a) above, use the amount from line 2 or line 3 and enter the result (from column (e)) on line 4 or
line 5, as appropriate.

Chapter 1 Tax Withholding for 2023 Page 15

Tax Computation Worksheet for 2023 (Continued)
c. Married Filing Jointly or Qualifying Surviving Spouse. Use this worksheet to figure the amount to enter on Worksheet 1-3, line 4, if
you expect your filing status for 2023 to be Married Filing Jointly or Qualifying Surviving Spouse.

Expected Taxable (a) (b) (c) (d) (e)

Income Enter amount Multiplication Multiply Subtraction Subtract (d) from (c). Enter the result
from amount (a) by (b) amount here and on Worksheet 1-3, line 4*
If Worksheet 1-3,
Worksheet 1-3,
line 3* is —
line 3*
Over But not
over
$0 $22,000 × 10% (0.10) $0
22,000 89,450 × 12% (0.12) 440.00
89,450 190,750 × 22% (0.22) 9,385.00
190,750 364,200 × 24% (0.24) 13,200.00
364,200 462,500 × 32% (0.32) 42,336.00
462,500 693,750 × 35% (0.35) 56,211.00
693,750 ----- × 37% (0.37) 70,086.00
* If you are using Worksheet 2-5, for column (a) above, use the amount from line 1 or line 14 and enter the result (from column (e)) on
line 37 or line 39, as appropriate.
If you are using Worksheet 2-6, for column (a) above, use the amount from line 2 or line 3 and enter the result (from column (e)) on line 4 or
line 5, as appropriate.

d. Married Filing Separately. Use this worksheet to figure the amount to enter on Worksheet 1-3, line 4, if you expect your filing status for 2023 to
be Married Filing Separately.

Expected Taxable (a) (b) (c) (d) (e)

Income Enter amount from Multiplication amount Multiply Subtraction Subtract (d) from (c). Enter the result
Worksheet 1-3, (a) by (b) amount here and on Worksheet 1-3, line 4*
If Worksheet 1-3,
line 3*
line 3* is —
Over But not
over
$0 $11,000 × 10% (0.10) $0
11,000 44,725 × 12% (0.12) 220.00
44,725 95,375 × 22% (0.22) 4,692.50
95,375 182,100 × 24% (0.24) 6,600.00
182,100 231,250 × 32% (0.32) 21,168.00
231,250 346,875 × 35% (0.35) 28,105.50
346,875 ----- × 37% (0.37) 35,043.00
* If you are using Worksheet 2-5, for column (a) above, use the amount from line 1 or line 14 and enter the result (from column (e)) on line 37 or
line 39, as appropriate.
If you are using Worksheet 2-6, for column (a) above, use the amount from line 2 or line 3 and enter the result (from column (e)) on line 4 or line 5,
as appropriate.

Page 16 Chapter 1 Tax Withholding for 2023

Worksheet 1-5. Projected Withholding for 2023 Keep for Your Records

.
Use this worksheet to figure the amount of your projected withholding for 2023, compare it to your projected tax for 2023, and, if necessary, figure
any adjustment to the amount you have withheld each payday.

Note. If married filing jointly, enter combined amounts.

1. Enter your projected tax for 2023 from Worksheet 1-3, line 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
2. Enter your total federal income tax withheld to date in 2023 from all sources of income. (For wages, you should be
able to find the withholding-to-date on your last pay slip or statement.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
3. Enter the federal tax withholding you expect for the rest of 2023.
a. For each source of wages, multiply the amount of federal income tax now being withheld each payday by the
number of paydays remaining in the year and enter the combined amount for all jobs . . . . . . . . . . . . . . . . . . . . . 3a.
b. For all other sources of recurring taxable income, multiply the withholding amount by the remaining number of
times the income is expected. For example, if you have federal income tax withheld from your monthly pension
and you will receive nine more payments this year, multiply your monthly withholding amount by 9 . . . . . . . . . . . 3b.
4. Add lines 2, 3a, and 3b. This is your projected withholding for 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5. Compare the amounts on lines 1 and 4.
• If line 1 is more than line 4, subtract line 4 from line 1. You need to increase your withholding. Enter the result
here and go to line 6.
• If line 4 is more than line 1, subtract line 1 from line 4. You may want to decrease your withholding. Enter the
result here and go to line 6. 5.
6. Divide line 5 by the number of paydays (or other withholding events) remaining in 2023 and enter the result. This is
the additional amount you should use to either increase or decrease the amount you have withheld from each
remaining payday (or other withholding event). Follow the instructions for line 6 for your situation for completing a
2023 Form W-4. The instructions are different if your withholding so far this year was based on a 2019 (or earlier)
Form W-4 or a 2023 Form W-4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.

Instructions for line 6—If your Instructions for line 6—If your Instructions for line 6—If your
withholding to date was figured withholding to date was figured withholding to date was figured
based on a 2019 (or earlier) Form based on a 2019 (or earlier) Form based on a 2023 Form W-4.
W-4. W-4.
Use the following instructions to either
Use the following instructions to Use the following instructions to increase or decrease your
increase your withholding. decrease your withholding. withholding.
How do you increase your withholding? Follow How do you decrease your withholding? Follow How do you increase your withholding? Follow
these steps to increase your withholding by completing these steps to decrease your withholding by completing these steps to increase your withholding by completing
a 2023 Form W-4. a 2023 Form W-4. a 2023 Form W-4.
Step 1: • If your filing status was "Single" Step 1: • If your filing status was "Single" or • Complete your new 2023 Form W-4
or "Married, but withhold at "Married, but withhold at higher through Step 4(b) in the same way you
higher Single rate," check Single rate," check "Single." completed your previous Form W-4.
"Single." • If your filing status was "Married," • Add the amount, if any, on Step 4(c) of
• If your filing status was "Married," check "Married filing jointly." your previous Form W-4 to the amount
check "Married filing jointly." Note. Head of household filing status was on line 6 of Worksheet 1-5 above and
Note. Head of household filing status not a choice on the 2019 (or earlier) enter the result on Step 4(c) of your
was not a choice on the 2019 (or Form(s) W-4. new Form W-4.
earlier) Form(s) W-4. Step 3: Multiply the amount on line 6 of
How do you decrease your withholding?
Step 4(a): • If your filing status was "Single" Worksheet 1-5 by the number of paydays
or "Married, but withhold at in 2023 and enter this amount on Step 3.
• Complete Steps 1, 2(c), 4(a), 4(b),
and 4(c) in the same way as you
higher Single rate," enter $9,400 Step 4(a): • If your filing status was "Single" or
completed your previous Form W-4.
(the equivalent of 2 allowances) "Married, but withhold at higher
on Step 4(a).
• Add the amount, if any, on Step 3 of
Single rate," enter $9,400 (the
your previous Form W-4 to the product
• If your filing status was "Married," equivalent of 2 allowances) on Step
of line 6 of Worksheet 1-5 multiplied
enter $14,100 (the equivalent of 3 4(a).
by the total number of paydays in
allowances) on Step 4(a). • If your filing status was "Married,"
2023 and enter the result on Step 3 of
Step 4(b): • If there was an entry on line 5 enter $14,100 (the equivalent of 3
your new Form W-4.
(number of allowances), multiply allowances) on Step 4(a).
each claimed allowance by Step 4(b): • If there was an entry on line 5
$4,700 and enter the result on (number of allowances), multiply
If you make a mid-year change to your
Step 4(b). each claimed allowance by $4,700 ! withholding, you should complete and
Step 4(c): • If there is an amount on line 6, and enter the result on Step 4(b). CAUTION give to your employer a new Form W-4

add it to the amount on line 6 of Step 4(c): • If there was an amount on line 6, in January. The later in the year you change
Worksheet 1-5 above, and enter add it to the amount on Step 4(c). your Form W-4, the more important it is that you
the result on Step 4(c). submit a new form the following January.

Chapter 1 Tax Withholding for 2023 Page 17

Worksheet 1-6. Tax Credits for 2023 Form W-4 or Form W-4P Keep for Your Records
Use this worksheet to figure any extra amount to enter in Step 3 of Form W-4 or Form W-4P. For more information on these credits, see Tax
Credits, earlier.
Caution. The child tax credit and the credit for other dependents are already figured in Step 3 of Form W-4 or Form W-4P.

Enter the projected amount for each credit you expect to take (other than the child tax credit or credit for other
dependents).
1. Credit for the elderly or the disabled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
2. Credit for child and dependent care expenses ..................................................... 2.
3. Education credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
4. Adoption credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5. Foreign tax credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.
6. Retirement savings contributions credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.
7. Earned income credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
8. Premium tax credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.
9. Other credits (see Table 1-2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.
10. Add lines 1 through 9. This is your total estimated tax credits. Include this amount in the total entered on Form
W-4, Step 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.

Page 18 Chapter 1 Tax Withholding for 2023

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

1. Will you owe $1,000 or 2a. Will your income tax 2b. Will your income tax withholding
more for 2023 after withholding and refundable and refundable credits* be at No
subtracting income tax Yes credits* be at least 90% No least 100%** of the tax shown
withholding and refundable (662⁄3 % for farmers and on your 2022 tax return?
credits* from your total fishermen) of the tax shown on
tax? (Don’t subtract any your 2023 tax return? Note: Your 2022 return must
estimated tax payments.) have covered a 12-month
period.
Yes
No Yes

You are NOT required to pay You MUST make estimated

estimated tax. tax payment(s) by the
required due date(s).
See When To Pay
Estimated Tax.

* Use the refundable credits shown on the 2023 Estimated Tax Worksheet, line 11b.
** 110% if less than two-thirds of your gross income for 2022 or 2023 is from farming or fishing and your 2022 adjusted gross income was
more than $150,000 ($75,000 if your filing status for 2023 is married filing a separate return).

Topics • You were a U.S. citizen or resident alien for

This chapter discusses: the whole year.
2. • Who must pay estimated tax,
• Your 2022 tax year covered a 12-month
period.
• How to figure estimated tax (including You had no tax liability for 2022 if your total
illustrated examples), tax (defined later under Total tax for
Estimated Tax • When to pay estimated tax, 2022—line 12b) was zero or you didn’t have to
• How to figure each payment, and file an income tax return.
for 2023 • How to pay estimated tax.

Useful Items Who Must Pay

Introduction
You may want to see:
Estimated Tax
Form (and Instructions)
Estimated tax is the method used to pay tax on If you owed additional tax for 2022, you may
income that isn’t subject to withholding. This in- 1040-ES Estimated Tax for Individuals have to pay estimated tax for 2023.
cludes income from self-employment, interest,
1040-ES

dividends, rent, gains from the sale of assets, You can use the following general rule as a
See How To Get Tax Help at the end of this
prizes, and awards. You may also have to pay guide during the year to see if you will have
publication for information about how to get this
estimated tax if the amount of income tax being enough withholding, or should increase your
publication and form.
withheld from your salary, pension, or other in- withholding or make estimated tax payments.
come isn’t enough. Worksheets. You may need to use several of
Estimated tax is used to pay both income the blank worksheets included in this chapter. General Rule
tax and self-employment tax, as well as other See Worksheets for Chapter 2 to locate what
taxes and amounts reported on your tax return. you need. In most cases, you must pay estimated tax for
If you don’t pay enough tax, either through with-
2023 if both of the following apply.
holding or estimated tax, or a combination of
both, you may have to pay a penalty. If you
don’t pay enough by the due date of each pay-
Who Does Not Have To 1. You expect to owe at least $1,000 in tax
for 2023 after subtracting your withholding
ment period (see When To Pay Estimated Tax, Pay Estimated Tax and tax credits.
later), you may be charged a penalty even if you
2. You expect your withholding and tax cred-
are due a refund when you file your tax return. If you receive salaries and wages, you may be its to be less than the smaller of:
For information on when the penalty applies, able to avoid paying estimated tax by asking
see the Instructions for Form 2210. your employer to take more tax out of your a. 90% of the tax to be shown on your
earnings. To do this, file a new Form W-4 with 2023 tax return, or
It would be helpful for you to have a
your employer. See chapter 1.
TIP copy of your 2022 tax return and an es- b. 100% of the tax shown on your 2022
timate of your 2023 income nearby tax return. Your 2022 tax return must
while reading this chapter. Also, keep in mind Estimated tax not required. You don’t have
cover all 12 months.
the items under What's New for 2023, earlier. to pay estimated tax for 2023 if you meet all
three of the following conditions. Note. The percentages in (2a) or (2b) just listed
• You had no tax liability for 2022. may be different if you are a farmer, fisherman,

Chapter 2 Estimated Tax for 2023 Page 19

or higher income taxpayer. See Special Rules, Gross income from fishing includes the fol-
later. The tax you would have paid lowing amounts.
had you filed a separate • Schedule C (Form 1040), Profit or Loss
If the result from using the general rule return From Business, line 7.
! above suggests that you won’t have
CAUTION enough withholding, complete the
The total tax you and your • Income for services as an officer or crew
spouse would have paid member of a vessel while the vessel is en-
2023 Estimated Tax Worksheet for a more ac-
had you filed separate gaged in fishing.
curate calculation.
returns • Your share of the gross fishing income
from a partnership, S corporation, estate or
Figure 2-A takes you through the general
trust from Schedule K-1 (Form 1065),
rule. You may find this helpful in determining if
you must pay estimated tax.
Special Rules Schedule K-1 (Form 1120S), or Sched-
ule K-1 (Form 1041).
If all your income will be subject to in- There are special rules for farmers, fishermen, • Certain taxable interest and punitive dam-
TIP come tax withholding, you probably and certain higher income taxpayers. age awards received in connection with
don’t need to pay estimated tax. the Exxon Valdez litigation.
Farmers and Fishermen • Income for services normally performed in
connection with fishing.
Married Taxpayers If at least two-thirds of your gross income for Services normally performed in connection with
2022 or 2023 is from farming or fishing, substi- fishing include:
If you qualify to make joint estimated tax pay- tute 66 2/3% for 90% in (2a) under General Rule, • Shore service as an officer or crew mem-
ments, apply the rules discussed here to your earlier. ber of a vessel engaged in fishing; and
joint estimated income.
• Services that are necessary for the imme-
Gross income. Your gross income is all in- diate preservation of the catch, such as
You and your spouse can make joint estima-
come you receive in the form of money, goods, cleaning, icing, and packing the catch.
ted tax payments even if you are not living to-
property, and services that isn’t exempt from
gether.
tax. To determine whether two-thirds of your
However, you and your spouse can’t make gross income for 2022 was from farming or fish-
Higher Income Taxpayers
joint estimated tax payments if: ing, use as your gross income the total of the in-
If your AGI for 2022 was more than $150,000
• You are legally separated under a decree come (not loss) amounts.
($75,000 if your filing status for 2023 is married
of divorce or separate maintenance,
filing a separate return), substitute 110% for
• You and your spouse have different tax Joint returns. On a joint return, you must add
100% in (2b) under General Rule, earlier.
years, or your spouse's gross income to your gross in-
• Either spouse is a nonresident alien (un- come to determine if at least two-thirds of your
For 2022, AGI is the amount shown on Form
less that spouse elected to be treated as a total gross income is from farming or fishing.
1040 or 1040-SR, line 11.
resident alien for tax purposes). See
Choosing Resident Alien Status in Pub. Gross income from farming. This is income
Note. This rule does not apply to farmers
519. from cultivating the soil or raising agricultural
and fishermen.
commodities. It includes the following amounts.
Note. Individuals who are in registered do- • Income from operating a stock, dairy, poul-
mestic partnerships, civil unions, or other simi- try, bee, fruit, or truck farm. Aliens
lar formal relationships that are not marriages • Income from a plantation, ranch, nursery,
under state law can’t make joint estimated tax range, orchard, or oyster bed. Resident and nonresident aliens may also have
payments. These individuals can take credit • Crop shares for the use of your land. to pay estimated tax. Resident aliens should fol-
only for the estimated tax payments that he or • Gains from sales of draft, breeding, dairy, low the rules in this publication, unless noted
she made. or sporting livestock. otherwise. Nonresident aliens should get Form
1040-ES (NR), U.S. Estimated Tax for Nonresi-
If you and your spouse can’t make joint esti- For 2022, gross income from farming is the
dent Alien Individuals.
mated tax payments, apply these rules to your total of the following amounts.
separate estimated income. • Schedule F (Form 1040), Profit or Loss You are an alien if you are not a citizen or
From Farming, line 9. national of the United States. You are a resident
Making joint or separate estimated tax pay- • Form 4835, Farm Rental Income and Ex- alien if you either have a green card or meet the
ments won’t affect your choice of filing a joint penses, line 7. substantial presence test.
tax return or separate returns for 2023. • Your share of the gross farming income
from a partnership, S corporation, estate or For more information about withholding, the
2022 separate returns and 2023 joint re- trust from Schedule K-1 (Form 1065), substantial presence test, and Form 1040-ES
turn. If you plan to file a joint return with your Schedule K-1 (Form 1120-S), or Sched- (NR), see Pub. 519.
spouse for 2023, but you filed separate returns ule K-1 (Form 1041).
for 2022, your 2022 tax is the total of the tax
shown on your separate returns. You filed a
• Your gains from sales of draft, breeding, Estates and Trusts
dairy, or sporting livestock shown on Form
separate return if you filed as single, head of 4797, Sales of Business Property. Estates and trusts must also pay estimated tax.
household, or married filing separately.
Wages you receive as a farm employee and However, estates (and certain grantor trusts
wages you receive from a farm corporation are that receive the residue of the decedent's es-
2022 joint return and 2023 separate re-
not gross income from farming. tate under the decedent's will) are exempt from
turns. If you plan to file a separate return for
paying estimated tax for the first 2 years after
2023, but you filed a joint return for 2022, your
Gross income from fishing. This is income the decedent's death.
2022 tax is your share of the tax on the joint re-
from catching, taking, harvesting, cultivating, or
turn. You file a separate return if you file as sin- Estates and trusts must use Form 1041-ES,
farming any kind of fish, shellfish (for example,
gle, head of household, or married filing sepa- Estimated Income Tax for Estates and Trusts,
clams and mussels), crustaceans (for example,
rately. to figure and pay estimated tax.
lobsters, crabs, and shrimp), sponges, sea-
To figure your share of the tax on a joint re-
weeds, or other aquatic forms of animal and
turn, first figure the tax both you and your
vegetable life.
spouse would have paid had you filed separate
returns for 2022 using the same filing status for
2023. Then, multiply the tax on the joint return
by the following fraction.

Page 20 Chapter 2 Estimated Tax for 2023

 and both you and your spouse have net earn- net capital gain. Instead, your net capital gain is

How To Figure ings from self-employment, each of you must

complete a separate worksheet.
taxed at a lower maximum rate.
The term “net capital gain” means the
Estimated Tax amount by which your net long-term capital gain
for the year is more than your net short-term
Expected Taxable Income— capital loss.
To figure your estimated tax, you must figure Line 2
your expected AGI, taxable income, taxes, de- Tax on capital gain and qualified
ductions, and credits for the year. dividends. If the amount on line 1 in-
Reduce your expected AGI for 2023 (line 1) by
cludes a net capital gain or qualified
When figuring your 2023 estimated tax, it either your expected itemized deductions or
dividends, use Worksheet 2-5 to figure your tax.
may be helpful to use your income, deductions, your standard deduction.
and credits for 2022 as a starting point. Use
your 2022 federal tax return as a guide. You Itemized deductions—line 2a. If you expect Note. The tax rate on your capital gains and
can use Form 1040-ES to figure your estimated to claim itemized deductions on your 2023 tax dividends will depend on your income.
tax. Nonresident aliens use Form 1040-ES (NR) return, enter the estimated amount on line 2a. Tax if excluding foreign earned in-
to figure estimated tax. Itemized deductions are the deductions that come or excluding or deducting for-
can be claimed on Schedule A (Form 1040). eign housing. If you expect to claim
You must make adjustments both for the foreign earned income exclusion or the
changes in your own situation and for recent Standard deduction—line 2a. If you expect housing exclusion or deduction on Form 2555,
changes in the tax law. Some of these changes to claim the standard deduction on your 2023 use Worksheet 2-6 to figure your estimated tax.
are discussed earlier under What's New for tax return, enter the amount on line 2a. Use
2023. For information about these and other Worksheet 2-4 to figure your standard deduc-
changes in the law, visit the IRS website at tion. Step 2. Total your expected taxes (line 6). In-
IRS.gov. clude on line 6 the sum of the following.
No standard deduction. The standard de-
duction for some individuals is zero. Your 1. Your tax on line 6.
The instructions for Form 1040-ES include a
worksheet to help you figure your estimated tax. standard deduction will be zero if you: 2. Your expected alternative minimum tax
Keep the worksheet for your records. • File a separate return and your spouse (AMT) from Form 6251.
itemizes deductions,
• Are a dual-status alien, or 3. Your expected additional taxes from Form
2023 Estimated Tax • File a return for a period of less than 12 8814, Parents' Election To Report Child's
Worksheet months because you change your ac- Interest and Dividends, and Form 4972,
counting period. Tax on Lump-Sum Distributions.
Use Worksheet 2-1 to help guide you through 4. Any recapture of education credits.
the information about completing the 2023 Esti-
Expected Taxes and Credits—
mated Tax Worksheet. You can also find a copy Step 3. Subtract your expected credits (line 7).
of the worksheet in the instructions for Form
Lines 4–11c
If you are using your 2022 return as a guide and
1040-ES. filed Form 1040 or 1040-SR, your total credits
After you have figured your expected taxable in-
for 2022 were shown on line 21.
come (line 3), follow the steps next to figure
Expected AGI—Line 1 your expected taxes, credits, and total tax for
If your credits on line 7 are more than your
taxes on line 6, enter -0- on line 8 and go to
2023. Most people will have entries for only a
Your expected AGI for 2023 (line 1) is your ex- Step 4.
few of these steps. However, you should check
pected total income minus your expected ad- every step to be sure you don’t overlook any-
justments to income. Step 4. Add your expected self-employment
thing.
tax (line 9). You should already have figured
Total income. Include in your total income all your self-employment tax (see Self-employed
Step 1. Figure your expected income tax
the income you expect to receive during the under Expected AGI—Line 1, earlier).
(line 4). Generally, you will use the 2023 Tax
year, even income that is subject to withholding. Rate Schedules to figure your expected income
However, don’t include income that is tax ex- Step 5. Add your expected other taxes
tax.
empt. (line 10).
However, see below for situations where
Total income includes all income and loss Other taxes include the following. The total
you must use a different method to figure your
for 2023 that, if you had received it in 2022, of these taxes are entered on line 10.
estimated tax.
would have been included on your 2022 tax re- 1. Additional tax on early distributions from:
turn in the total on line 9 of Form 1040 or Tax on child's investment income. You
1040-SR. must use a special method to figure tax on the a. An IRA or other qualified retirement
income of the following children who have more plan,
Social security and railroad retire-
than $2,500 of investment income. b. A tax-sheltered annuity, or
ment benefits. If you expect to receive
social security or tier 1 railroad retire- 1. Children under age 18 at the end of 2023. c. A modified endowment contract en-
ment benefits during 2023, use Worksheet 2-2 tered into after June 20, 1988.
2. The following children if their earned in-
to figure the amount of expected taxable bene-
come isn’t more than half their support. 2. Household employment taxes if:
fits you should include on line 1.
a. Children age 18 at the end of 2023. a. You will have federal income tax with-
Adjustments to income. Be sure to subtract b. Children who are full-time students at held from wages, pensions, annuities,
from your expected total income all of the ad- least age 19 but under age 24 at the gambling winnings, or other income;
justments you expect to take on your 2023 tax end of 2023. or
return.
See Pub. 929, Tax Rules for Children and De- b. You would be required to make esti-
Self-employed. If you expect to have pendents. Although the ages and dollar mated tax payments even if you didn’t
income from self-employment, use amounts in the publication may be different in include household employment taxes
Worksheet 2-3 to figure your expected the 2022 revision, this reference will give you when figuring your estimated tax.
self-employment tax and your allowable deduc- basic information for figuring the tax. 3. Amounts entered on Schedule 2 (Form
tion for self-employment tax. Include the
Tax on net capital gain. The regular in- 1040), line 14 through 17z. But don’t in-
amount from Worksheet 2-3 in your expected
come tax rates for individuals don’t apply to a clude the following.
adjustments to income. If you file a joint return

Chapter 2 Estimated Tax for 2023 Page 21

 a. Line 17b, recapture of a federal mort- Required Annual Payment— b. Any tax on excess accumulations in
gage subsidy; Line 12c qualified retirement plans.
b. Line 17k, tax on excess golden para- 3. The following amounts from Schedule 2
On lines 12a through 12c, figure the total
chute payments; (Form 1040).
amount you must pay for 2023, through with-
c. Line 17m, excise tax on insider stock holding and estimated tax payments, to avoid a. Excise tax on excess golden para-
compensation from an expatriated paying a penalty. chute payments (Schedule 2,
corporation; or line 17k).
General rule. The total amount you must pay
d. Line 17n, look-back interest due un- b. Excise tax on insider stock compen-
is the smaller of:
der section 167(g) or 460(b) of the In- sation from an expatriated corporation
ternal Revenue Code. 1. 90% of your total expected tax for 2023, or (Schedule 2, line 17m).
4. Repayment of the first-time homebuyer 2. 100% of the total tax shown on your 2022 c. Look-back interest due under section
credit. See Form 5405. return. Your 2022 tax return must cover all 167(g) (Schedule 2, line 17n).
12 months.
5. Additional Medicare Tax. A 0.9% Addi- d. Look-back interest due under section
tional Medicare Tax applies to your com- 460(b) (Schedule 2, line 17n).
Special rules. There are special rules for
bined Medicare wages and self-employ-
higher income taxpayers and for farmers and e. Recapture of federal mortgage sub-
ment income and/or your RRTA
fishermen. sidy (Schedule 2, line 17b).
compensation that exceeds the amount
listed in the following chart, based on your Higher income taxpayers. If your AGI for f. Uncollected social security and Medi-
filing status. 2022 was more than $150,000 ($75,000 if your care tax or RRTA tax on tips or
filing status for 2023 is married filing sepa- group-term life insurance (Schedule
Filing Status Threshold Amount rately), substitute 110% for 100% in (2) above. 2, line 13).
This rule does not apply to farmers and fisher-
Married filing jointly $250,000 4. Any refundable credit amounts on Form
men.
Married filing separately $125,000 1040 or 1040-SR, line 27, 28, and 29, and
Schedule 3 (Form 1040), lines 9, 12, 13b,
Single $200,000 For 2022, AGI is the amount shown on Form
13d, and 13h.
Head of household $200,000
1040 or 1040-SR, line 11.
Qualifying surviving spouse $200,000 Example. Taxpayer F's total tax on the Total Estimated Tax Payments
2022 return was $42,581, and the expected tax Needed—Line 14a
Medicare wages and self-employment for 2023 is $71,253. Taxpayer F’s 2022 AGI
income are combined to determine if your was $180,000. Because Taxpayer F had more Use lines 13 and 14a to figure the total estima-
income exceeds the threshold. A self-em- than $150,000 of AGI in 2022, Taxpayer F fig- ted tax you may be required to pay for 2023.
ployment loss should not be considered ures the required annual payment as follows. Subtract your expected withholding from your
for purposes of this tax. RRTA compensa- Taxpayer F determines that 90% of the expec- required annual payment (line 12c). You must
tion should be separately compared to the ted tax for 2023 is $64,128 (90% (0.90) × usually pay this difference in four equal install-
threshold. Your employer is responsible $71,253). Next, Taxpayer F determines that ments. See When To Pay Estimated Tax and
for withholding the 0.9% Additional Medi- 110% of the tax shown on the 2022 return is How To Figure Each Payment, later.
care Tax on Medicare wages or RRTA $46,839 (110% (1.10) x $42,581). Finally, Tax-
compensation it pays to you in excess of payer F determines that the required annual You don’t have to pay estimated tax if:
$200,000 in 2023. You should consider payment is $46,839, the smaller of the two. • Line 12c minus line 13 is zero or less, or
this withholding, if applicable, in determin- • Line 11c minus line 13 is less than $1,000.
ing whether you need to make an estima- Farmers and fishermen. If at least
ted payment. two-thirds of your gross income for 2022 or
Withholding—line 13. Your expected with-
2023 is from farming or fishing, your required
6. Net Investment Income Tax (NIIT). The holding for 2023 (line 13) includes the income
annual payment is the smaller of:
NIIT is 3.8% of the lesser of your net in- tax you expect to be withheld from all sources
vestment income or the excess of your 1. 662/3% (0.6667) of your total tax for 2023, (wages, pensions and annuities, etc.). It in-
MAGI over the amount listed in the follow- or cludes excess social security and tier 1 railroad
ing chart, based on your filing status. retirement tax you expect to be withheld from
2. 100% of the total tax shown on your 2022
your wages and compensation. For this pur-
return. (Your 2022 tax return must cover
pose, you will have excess social security or tier
Filing Status Threshold Amount all 12 months.)
1 railroad retirement tax withholding for 2023
Married filing jointly $250,000 only if your wages and compensation from two
For definitions of “gross income from farm-
Married filing separately $125,000 ing” and “gross income from fishing,” see Farm- or more employers are more than $160,200.
Single $200,000 ers and Fishermen, earlier, under Special It also includes Additional Medicare Tax you
Rules. expect to be withheld from your wages or com-
Head of household $200,000
pensation. Your employer is responsible for
Qualifying surviving spouse $250,000 Total tax for 2022—line 12b. Your 2022 total withholding the 0.9% Additional Medicare Tax
tax is the amount on line 24 reduced by the fol- on Medicare wages or RRTA compensation it
Step 6. Subtract your refundable credits lowing. pays to you in excess of $200,000.
(line 11c). These include the earned income 1. Unreported social security and Medicare
credit, additional child tax credit, fuel tax credit,
net premium tax credit, refundable American
tax or RRTA tax from Forms 4137 or 8919
included on Schedule 2 (Form 1040), lines When To Pay
opportunity credit, and section 1341 credit.
To figure your expected fuel tax credit, don’t
5 and 6. Estimated Tax
include fuel tax for the first 3 quarters of the 2. The following amounts from Form 5329 in-
year that you expect to have refunded to you. cluded on Schedule 2 (Form 1040), line 8. For estimated tax purposes, the year is divided
The result of Steps 1 through 6 is your total into four payment periods. Each period has a
a. Any tax on excess contributions to an
estimated tax for 2023 (line 11c). specific payment due date. If you don’t pay
IRA, Archer MSA, Coverdell educa-
enough tax by the due date of each of the pay-
tion savings account, health savings
ment periods, you may be charged a penalty
account, and ABLE account.
even if you are due a refund when you file your
income tax return.

Page 22 Chapter 2 Estimated Tax for 2023

 If a payment is mailed, the date of the U.S. estimated tax during the first payment period, Fiscal year farmers and fishermen. If you
postmark is considered the date of payment. you must make your first payment by the due are a farmer or fisherman, but your tax year
The general payment periods and due dates for date for the first payment period. does not start on January 1, you can either:
estimated tax payments are shown next. For • Pay all your estimated tax by the 15th day
exceptions to the dates listed, see Saturday, You have several options when paying esti- after the end of your tax year, or
Sunday, holiday rule. mated taxes. You can: • File your return and pay all the tax you owe
• Apply an overpayment from the previous by the 1st day of the 3rd month after the
tax year, end of your tax year.
Tax year
For the General due 2023 due • Pay all your estimated tax by the due date
of your first payment, or
period: date: date:
• Pay it in installments. How To Figure
Jan. 11
– March 31 ... April 15 April 18, 2023
If you choose to pay in installments, make
your first payment by the due date for the first
Each Payment
April 1 payment period. Make your remaining install-
– May 31 .... June 15 June 15, 2023 ment payments by the due dates for the later After you have figured your total estimated tax,
periods. figure how much you must pay by the due date
June 1 of each payment period. You should pay
– Aug. 31 .... Sept. 15 Sept. 15, 2023 enough by each due date to avoid a penalty for
To avoid any estimated tax penalties, all in-
Sept. 1 Jan. 15, next stallments must be paid by their due date and that period. If you don’t pay enough during any
– Dec. 31 .... year2 Jan. 16, 2024 for the required amount. payment period, you may be charged a penalty
even if you are due a refund when you file your
1
If your tax year does not begin on January 1,
No income subject to estimated tax during tax return. The penalty is discussed in the In-
see Fiscal-year taxpayers, later.
first period. If you don’t have income subject structions for Form 2210.
2
See January payment, later.
to estimated tax until a later payment period,
you must make your first payment by the due
date for that period. You can pay your entire es-
Regular Installment Method
Saturday, Sunday, holiday rule. If the due
date for an estimated tax payment falls on a timated tax by the due date for that period or
you can pay it in installments by the due date If your first estimated tax payment is due April
Saturday, Sunday, or legal holiday, the pay- 18, 2023, you can figure your required payment
ment will be on time if you make it on the next for that period and the due dates for the remain-
ing periods. Table 2-1 shows the general due for each period by dividing your annual estima-
day that isn’t a Saturday, Sunday, or a holiday. ted tax due (line 14a of the 2023 Estimated Tax
See Pub. 509 for a list of all legal holidays. dates for making installment payments when
the due date does not fall on a Saturday, Sun- Worksheet (Worksheet 2-1)) by 4. Enter this
day, or holiday. amount on line 15. However, use this method
January payment. If you file your 2023 Form only if your income is basically the same
1040 or 1040-SR by January 31, 2024, and pay throughout the year.
the rest of the tax you owe, you don’t need to Table 2-1. General Due Dates for
make the payment due on January 16, 2024. Estimated Tax
Change in estimated tax. After you make an
Installment Payments
estimated tax payment, changes in your in-
Example. Taxpayer G does not pay any es- If you first have come, adjustments, deductions, or credits may
timated tax for 2023. Taxpayer G files the 2023 income on which Make a Make later make it necessary for you to refigure your esti-
income tax return and pays the balance due you must pay payment installments mated tax. Pay the unpaid balance of your
shown on the return on January 26, 2024. estimated tax: by:* by:* amended estimated tax by the next payment
Taxpayer G's estimated tax for the fourth due date after the change or in installments by
payment period is considered to have been Before April 1 April 15 June 15
that date and the due dates for the remaining
paid on time. However, Taxpayer G may owe a Sept. 15
payment periods.
penalty for not making the first three estimated Jan. 15 next year
tax payments, if required. Any penalty for not April 1–May 31 June 15 Sept. 15 If you don’t receive your income evenly
making those payments will be figured up to Jan. 15 next year throughout the year, your required estimated
January 26, 2024. tax payments may not be the same for each pe-
June 1–Aug. 31 Sept. 15 Jan. 15 next year
riod. See Annualized Income Installment
Fiscal-year taxpayers. If your tax year does After Aug. 31 Jan. 15 (None)
next year
Method, later.
not start on January 1, your payment due dates
are: Amended estimated tax. If you refig-
*See January payment and Saturday, Sunday, ure your estimated tax during the year,
1. The 15th day of the 4th month of your fis-
holiday rule, earlier. or if your first estimated tax payment is
cal year,
due after April 18, 2023, figure your required
2. The 15th day of the 6th month of your fis- How much to pay to avoid penalty. To de- payment for each remaining payment period us-
cal year, termine how much you should pay by each pay- ing Worksheet 2-10.
ment due date, see How To Figure Each Pay-
3. The 15th day of the 9th month of your fis-
ment, later. Example. Early in 2023, Taxpayer H fig-
cal year, and
ures estimated tax due of $1,800. Taxpayer H
4. The 15th day of the 1st month after the
end of your fiscal year.
Farmers and Fishermen makes estimated tax payments on April 18 and
June 15 of $450 each ($1,800 ÷ 4).
You don’t have to make the last payment lis- If at least two-thirds of your gross income for On July 10, Taxpayer H sells investment
ted above if you file your income tax return by 2022 or 2023 is from farming or fishing, you property at a gain. Taxpayer H’s refigured esti-
the last day of the first month after the end of have only one payment due date for your 2023 mated tax is $4,100. The required estimated tax
your fiscal year and pay all the tax you owe with estimated tax: January 16, 2024. The due dates payment for the third payment period is $2,175.
your return. for the first three payment periods, discussed If Taxpayer H's estimated tax does not
under When To Pay Estimated Tax, earlier, change again, the required estimated tax pay-
don’t apply to you. ment for the fourth payment period will be
When To Start $1,025.
If you file your 2023 Form 1040 or 1040-SR
You don’t have to make estimated tax pay- by March 1, 2024, and pay all the tax you owe Underpayment penalty. The penalty is fig-
ments until you have income on which you will at that time, you don’t need to make an estima- ured separately for each payment period. If you
owe income tax. If you have income subject to ted tax payment. figure your payments using the regular

Chapter 2 Estimated Tax for 2023 Page 23

installment method and later refigure your pay- estimated tax for the period(s) before you Schedule AI—Annualized Income Installment
ments because of an increase in income, you changed your payments. To see how you may Method in the Instructions for Form 2210.
may be charged a penalty for underpayment of be able to avoid or reduce this penalty, see

Worksheet 2-10. Amended Estimated Tax Worksheet

Keep for Your Records

1. Amended total estimated tax due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.

2. Multiply line 1 by:
50% (0.50) if next payment is due June 15, 2023
75% (0.75) if next payment is due September 15, 2023
100% (1.00) if next payment is due January 16, 2024 . . . . . . . . . . . . . . . . . 2.
3. Estimated tax payments for all previous periods . . . . . . . . . . . . . . . . . . . . . . . 3.
4. Next required payment: Subtract line 3 from line 2 and enter the result (but not
less than zero) here and on your payment voucher for your next required
payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
Note. If the payment on line 4 is due January 16, 2024, 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, 2023, enter one-half of the
amount on line 6 here and on the payment vouchers for your payments due September 15, 2023, and January
16, 2024. If the amount on line 4 is due September 15, 2023, enter the amount from line 6 here and on the
payment voucher for your payment due January 16, 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.

Page 24 Chapter 2 Estimated Tax for 2023

Annualized Income nualized Estimated Tax Worksheet (Worksheet Line 15. Include all the nonrefundable credits
2-7)). you expect to claim because of events that will
Installment Method occur during the period.
Line 7. If you won’t itemize your deductions,
If you don’t receive your income evenly through- use Worksheet 2-4 to figure your standard de- Note. When figuring your credits for each
out the year (for example, your income from a duction. period, annualize any item of income or deduc-
repair shop you operate is much larger in the tion to figure each credit. For example, if you
summer than it is during the rest of the year), Line 12. Generally, you will use the Tax Rate need to use your AGI to figure a credit, use
your required estimated tax payment for one or Schedules to figure the tax on your annualized line 3 of Worksheet 2-7 to figure the credit for
more periods may be less than the amount fig- income. However, see below for situations each column.
ured using the regular installment method. where you must use a different method to figure
your estimated tax. Line 18. Add your expected other taxes.
The annualized income installment method Other taxes include the following.
annualizes your tax at the end of each period Tax on child's investment income. You
based on a reasonable estimate of your in- must use a special method to figure tax on the 1. Additional tax on early distributions from:
come, deductions, and other items relating to income of the following children who have more
a. An IRA or other qualified retirement
events that occurred from the beginning of the than $2,500 of investment income.
plan,
tax year through the end of the period. To see 1. Children under age 18 at the end of 2023.
whether you can pay less for any period, com- b. A tax-sheltered annuity, or
plete the 2023 Annualized Estimated Tax Work- 2. The following children if their earned in-
c. A modified endowment contract en-
sheet (Worksheet 2-7). come isn’t more than half their support.
tered into after June 20, 1988.
You first must complete the 2023 Esti- a. Children age 18 at the end of 2023.
2. Household employment taxes if:
! mated Tax Worksheet (Worksheet 2-1) b. Children who are full-time students at
through line 14b. a. You will have federal income tax with-
CAUTION
least age 19 but under age 24 at the
held from wages, pensions, annuities,
end of 2023.
gambling winnings, or other income;
Use the result you figure on line 32 of Work- or
See Pub. 929.
sheet 2-7 to make your estimated tax payments
and complete your payment vouchers. Tax on net capital gain. The regular in- b. You would be required to make esti-
come tax rates for individuals don’t apply to a mated tax payments even if you didn’t
Note. If you use the annualized income in- net capital gain. Instead, your net capital gain is include household employment taxes
stallment method to figure your estimated tax taxed at a lower maximum rate. when figuring your estimated tax.
payments, you must file Form 2210 with your The term “net capital gain” means the 3. Amounts on Schedule 2 (Form 1040),
2023 tax return. See Schedule AI—Annualized amount by which your net long-term capital gain lines 14 through 16, and 17a, 17c through
Income Installment Method in the Instructions for the year is more than your net short-term 17j, 17l, and 17o through 17z.
for Form 2210 for more information. capital loss.
4. Repayment of the first-time homebuyer
Tax on qualified dividends and capital credit if the home will cease to be your
Instructions for the 2023 gains. For 2023, your capital gain and divi- main home in 2023. See Form 5405 for
Annualized Estimated Tax dends rate will depend on your income. exceptions.
Worksheet (Worksheet 2-7)
Tax on capital gain or qualified divi- 5. Additional Medicare Tax. A 0.9% Addi-
Use Worksheet 2-7 to help you follow
dends. If the amount on line 1 includes tional Medicare Tax applies to your com-
TIP these instructions.
a net capital gain or qualified divi- bined Medicare wages and self-employ-
dends, use Worksheet 2-8 to figure the amount ment income and/or your RRTA
to enter on line 10. compensation that exceeds the amount
The purpose of this worksheet is to deter- listed in the following chart, based on your
mine your estimated tax liability as your income Tax if excluding foreign earned in- filing status.
accumulates throughout the year, rather than come or excluding or deducting for-
dividing your entire year's estimated tax liability eign housing. If you expect to claim Filing Status Threshold Amount
by four as if your income was earned equally the foreign earned income exclusion or the
throughout the year. The top of the worksheet Married filing jointly $250,000
housing exclusion or deduction on Form 2555,
shows the dates for each payment period. The use Worksheet 2-9 to figure the amount to enter Married filing separately $125,000
periods build; that is, each period includes all on line 10. Single $200,000
previous periods. After the end of each pay-
Head of household $200,000
ment period, complete the corresponding work- Line 13. Add the tax from Forms 8814, 4972,
sheet column to figure the payment due for that and 6251 for the period. Also, include any re-
Qualifying surviving spouse $200,000
period. capture of an education credit for each period. Medicare wages and self-employment
You may owe this tax if you claimed an educa- income are combined to determine if your
Line 1. Enter your AGI for the period. This is
tion credit in an earlier year and you received ei- income exceeds the threshold. A self-em-
your gross income for the period, including your
ther tax-free educational assistance or a refund ployment loss should not be considered
share of partnership or S corporation income or
of qualifying expenses for the same student af- for purposes of this tax. RRTA compensa-
loss, minus your adjustments to income for that
ter filing your 2022 return. tion should be separately compared to the
period. See Expected AGI—Line 1, earlier.
Use the 2022 forms or worksheets to see if threshold.
Self-employment income. If you had you will owe any of the taxes just discussed. Your employer is responsible for with-
self-employment income, first complete Sec- Figure the tax based on your income and de- holding the 0.9% Additional Medicare Tax
tion B of this worksheet. Use the amounts on ductions during the period shown in the column on Medicare wages or RRTA compensa-
line 41 when figuring your expected AGI to en- headings. Multiply this amount by the annuali- tion it pays you in excess of $200,000 in
ter in each column of Section A, line 1. zation amounts shown for each column on 2023. You should consider this withhold-
line 2 of the 2023 Annualized Estimated Tax ing, if applicable, in determining whether
Line 4. Be sure to consider deduction limits fig- Worksheet (Worksheet 2-7). Enter the result on you need to make an estimated payment.
ured on Schedule A (Form 1040), such as the line 13 of this worksheet.
$10,000 limit on state and local taxes. Figure 6. Net Investment Income Tax (NIIT). The
your deduction limits using your expected AGI NIIT is 3.8% of the lesser of your net in-
in the corresponding column of line 1 (2023 An- vestment income or the excess of your

Chapter 2 Estimated Tax for 2023 Page 25

 MAGI over a specified threshold amount. However, if you can use a treaty rate Example. When Taxpayer J finished filling
Threshold amounts: lower than 30%, use the percentages de- out the 2022 tax return, the result was an over-
termined by multiplying your treaty rate by payment of $750. Taxpayer J knew additional
Filing Status Threshold Amount 2.4, 1.5, and 1, respectively. tax would be owed in 2023. Taxpayer J credited
$600 of the overpayment to the 2023 estimated
Married filing jointly $250,000 4. On line 26, enter one-half of the amount
tax and had the remaining $150 issued as a re-
Married filing separately $125,000 from line 14c of the Form 1040-ES (NR)
fund.
2023 Estimated Tax Worksheet in column
Single $200,000 In September, Taxpayer J amended the
(b), and one-fourth in columns (c) and (d)
2022 return by filing Form 1040-X, Amended
Head of household $200,000 of Worksheet 2-7.
U.S. Individual Income Tax Return. It turned out
Qualifying surviving spouse $250,000
5. On lines 24 and 27, skip column (b). that Taxpayer J owed $250 more in tax than
was originally thought. This reduced the 2022
6. On line 31, if you don’t use the actual with-
Line 20. Include all the refundable credits overpayment from $750 to $500. Because the
holding method, include one-half of your
(other than withholding credits) you can claim $750 had already been applied to the 2023 esti-
total expected withholding in column (b)
because of events that occurred during the pe- mated tax or refunded, the IRS billed Taxpayer
and one-fourth in columns (c) and (d).
riod. These include the earned income credit, J for the additional $250 owed, plus penalties
additional child tax credit, fuel tax credit, net See Pub. 519 for more information. and interest. Taxpayer J could not use any of
premium tax credit, refundable American oppor- the $600 that had been credited to the 2023 es-
tunity credit, and section 1341 credit. timated tax to pay this bill.
Estimated Tax
Note. When figuring your refundable credits Payments Not Required Pay Online
for each period, annualize any item of income
or deduction used to figure each credit. You don’t have to pay estimated tax if your with- Paying online is convenient and secure and
holding in each payment period is at least as helps make sure we get your payments on time.
Line 29. If line 28 is smaller than line 25 and much as: To pay your taxes online or for more informa-
you are not certain of the estimate of your 2023 • One-fourth of your required annual pay- tion, go to IRS.gov/Payments. You can pay us-
tax, you can avoid a penalty by entering the ment, or ing any of the following methods.
amount from line 25 on line 29. • Your required annualized income install- • Your Online Account. You can now make
ment for that period. tax payments through your online account,
Line 31. For each period, include estimated
tax payments made and any excess social se- including balance payments, estimated tax
You also don’t have to pay estimated tax if
curity and railroad retirement tax. payments, or other types. You can also
you will pay enough through withholding to
see your payment history and other tax re-
Also, include estimated federal income tax keep the amount you will owe with your return
cords there. Go to IRS.gov/Account.
withholding. One-fourth of your estimated with- under $1,000.
holding is considered withheld on the due date
• IRS Direct Pay. For online transfers di-
rectly from your checking or savings ac-
of each payment period. To figure the amount
to include on line 31 for each period, multiply How To Pay count at no cost to you, go to IRS.gov/
Payments.
your total expected withholding for 2023 by:
• 25% (0.25) for the first period, Estimated Tax • Pay by Card. To pay by debit or credit
card, go to IRS.gov/Payments. There is a
• 50% (0.50) for the second period, convenience fee charged by these service
• 75% (0.75) for the third period, and There are several ways to pay estimated tax.
providers.
• 100% (1.00) for the fourth period. • Credit an overpayment on your 2022 return
to your 2023 estimated tax.
• Electronic Funds Withdrawal (EFW) is
However, you may choose to include your an integrated e-file/e-pay option offered
withholding according to the actual dates on • Pay by direct transfer from your bank ac- when filing your federal taxes electronically
count, or pay by debit or credit card using
which the amounts will be withheld. For each using tax preparation software, through a
a pay-by-phone system or the Internet.
period, include withholding made from the be- tax professional, or the IRS at IRS.gov/
ginning of the period up to and including the • Send in your payment (check or money or- Payments.
der) with a payment voucher from Form
payment due date. You can make this choice
1040-ES.
• Online Payment Agreement. If you can’t
separately for the taxes withheld from your wa- pay in full by the due date of your tax re-
ges and all other withholding. For an explana- turn, you can apply for an online monthly
tion of what to include in withholding, see Total Credit an Overpayment installment agreement at IRS.gov/OPA.
Estimated Tax Payments Needed—Line 14a, Once you complete the online process,
earlier. If you show an overpayment of tax after com- you will receive immediate notification of
pleting your Form 1040 or 1040-SR for 2022, whether your agreement has been ap-
Nonresident aliens. If you will file Form you can apply part or all of it to your estimated proved. A user fee is charged.
1040-NR and you don’t receive wages as an tax for 2023. On Form 1040 or 1040-SR, enter
employee subject to U.S. income tax withhold-
ing, the instructions for the worksheet are modi-
the amount you want credited to your estimated Pay by Phone
tax rather than refunded. Take the amount you
fied as follows. have credited into account when figuring your Paying by phone is another safe and secure
1. Skip column (a). estimated tax payments. If you timely file your method of paying electronically. Use one of the
2022 return, treat the credit as a payment made following methods: (1) call one of the debit or
2. On line 1, enter your income for the period on April 18, 2023.
that is effectively connected with a U.S. credit card service providers, or (2) use the
trade or business. Electronic Federal Tax Payment System
If you are a beneficiary of an estate or trust, (EFTPS).
3. On line 21, increase your entry by the and the trustee elects to credit 2023 trust pay-
amount determined by multiplying your in- ments of estimated tax to you, you can treat the Debit or credit card. Call one of our service
come for the period that isn’t effectively amount credited as paid by you on January 16, providers. Each charges a fee that varies by
connected with a U.S. trade or business 2024. provider, card type, and payment amount.
by the following.
If you choose to have an overpayment of tax Link2GOV Corporation
a. 72% (0.72) for column (b). credited to your estimated tax, you can’t have
888-PAY-1040TM (888-729-1040)
any of that amount refunded to you until you file
b. 45% (0.45) for column (c). www.PAY1040.com
your tax return for the following year. You also
c. 30% (0.30) for column (d). can’t use that overpayment in any other way.

Page 26 Chapter 2 Estimated Tax for 2023

 WorldPay US, Inc. Pay by Check or Money tion from your check to make an electronic fund
transfer, funds may be withdrawn from your ac-
844-PAY-TAX-8TM (844-729-8298)
www.payUSAtax.com
Order Using the Estimated count as soon as the same day we receive your
Tax Payment Voucher payment, and you will not receive your check
ACI Payments, Inc. back from your financial institution.
888-UPAY-TAXTM (888-872-9829) Before submitting a payment through the mail,
please consider alternative methods. One of No checks of $100 million or more accep-
fed.acipayonline.com
our safe, quick, and easy electronic payment ted. The IRS can’t accept a single check (in-
options might be right for you. Each payment of cluding a cashier's check) for amounts of
EFTPS. To get more information about EFTPS estimated tax by check or money order must be $100,000,000 ($100 million) or more. If you are
or to enroll in EFTPS, visit EFTPS.gov or call accompanied by a payment voucher from Form sending $100 million or more by check, you'll
800-555-4477. To contact EFTPS using Tele- 1040-ES. If you use your own envelopes (and need to spread the payment over two or more
communications Relay Services (TRS) for peo- not the window envelope that comes with the checks with each check made out for an
ple who are deaf, hard of hearing, or have a 1040-ES package), make sure you mail your amount less than $100 million. This limit doesn't
speech disability, dial 711 and then provide the payment vouchers to the address shown in the apply to other methods of payment (such as
TRS assistant the 800-555-4477 number above Form 1040-ES instructions for the place where electronic payments). Please consider a
or 800-733-4829. Additional information about you live. method of payment other than check if the
EFTPS is also available in Pub. 966. amount of the payment is over $100 million.
Don’t use the address shown in the In-
structions for Form 1040.
Pay by Mobile Device ! Joint estimated tax payments. If you file a
CAUTION
joint return and are making joint estimated tax
To pay through your mobile device, download payments, enter the names and social security
If you didn’t pay estimated tax last year, get numbers on the payment voucher in the same
the IRS2Go application.
a copy of Form 1040-ES from the IRS (see How order as they will appear on the joint return.
To Get Tax Help, later). Follow the instructions
Pay by Cash to make sure you use the vouchers correctly. Change of address. You must notify the IRS if
you are making estimated tax payments and
Cash is an in-person payment option for individ- Notice to taxpayers presenting checks. you changed your address during the year.
uals provided through retail partners with a When you provide a check as payment, you au- Complete Form 8822, Change of Address, and
maximum of $1,000 per day per transaction. To thorize us either to use information from your mail it to the address shown in the instructions
make a cash payment, you must first be regis- check to make a one-time electronic fund trans- for that form.
tered online with ACI Payments, Inc. at fer from your account or to process the payment
fed.acipayonline.com. as a check transaction. When we use informa-

Chapter 2 Estimated Tax for 2023 Page 27

Worksheets for Chapter 2
Use the following worksheets and tables to figure your correct estimated tax.

IF you need... THEN use...

2023 Tax Rate Schedules 2023 Tax Rate Schedules

the 2023 Estimated Tax Worksheet Worksheet 2-1

to estimate your taxable social security and railroad retirement benefits—line 1 of ES Worksheet (or
Worksheet 2-2
Annualized ES Worksheet (Worksheet 2-7))

to estimate your self-employment (SE) tax and your deduction for SE tax—lines 1 and 11 of ES Worksheet
Worksheet 2-3
(lines 1 and 17 of Annualized ES Worksheet (Worksheet 2-7))

to estimate your standard deduction—line 2 of ES Worksheet (line 7 of Annualized ES Worksheet

Worksheet 2-4
(Worksheet 2-7))

to estimate your income tax if line 1 of your ES Worksheet includes a net capital gain or qualified
Worksheet 2-5
dividends—line 4 of ES Worksheet

to estimate your income tax if you expect to claim a foreign earned income exclusion or foreign housing
Worksheet 2-6
exclusion or deduction on Form 2555—line 4 of ES Worksheet

the 2023 Annualized Estimated Tax Worksheet (Annualized ES Worksheet) Worksheet 2-7

to estimate your income tax if line 1 of your Annualized ES Worksheet includes a net capital gain or
Worksheet 2-8
qualified dividends—line 10 of Annualized ES Worksheet

to estimate your income tax if you expect to claim a foreign earned income exclusion or foreign housing
Worksheet 2-9
exclusion or deduction on Form 2555—line 10 of Annualized ES Worksheet

to refigure (amend) your estimated tax during the year Worksheet 2-10

Page 28 Chapter 2 Estimated Tax for 2023

 2023 Tax Rate Schedules

!
CAUTION
Don’t use these Tax Rate Schedules to figure your 2022 taxes. Use them only to figure your 2023 estimated
taxes.
Schedule X—Use if your 2023 filing status is Schedule Z— Use if your 2023 filing status is
Single Head of household

If line 3 is: The tax is: If line 3 is: The tax is:
of the of the
But not amount But not amount
Over— over— over— Over— over— over—
$0 $11,000 10% $0 $0 $15,700 10% $0
11,000 44,725 $1,100.00 + 12% 11,000 15,700 59,850 $1,570.00 + 12% 15,700
44,725 95,375 5,147.00 + 22% 44,725 59,850 95,350 6,868.00 + 22% 59,850
95,375 182,100 16,290.00 + 24% 95,375 95,350 182,100 14,678.00 + 24% 95,350
182,100 231,250 37,104.00 + 32% 182,100 182,100 231,250 35,498.00 + 32% 182,100
231,250 578,125 52,832.00 + 35% 231,250 231,250 578,100 51,226.00 + 35% 231,250
578,125 ------ 174,238.25 + 37% 578,125 578,100 ------ 172,623.50 + 37% 578,100

Schedule Y-1— Use if your 2023 filing status is Schedule Y-2— Use if your 2023 filing status is
Married filing jointly or Qualifying surviving spouse Married filing separately

If line 3 is: The tax is: If line 3 is: The tax is:
of the of the
But not amount But not amount
Over— over— over— Over— over— over—
$0 $22,000 10% $0 $0 $11,000 10% $0
22,000 89,450 $2,200.00 + 12% 22,000 11,000 44,725 $1,100.00 + 12% 11,000
89,450 190,750 10,294.00 + 22% 89,450 44,725 95,375 5,147.00 + 22% 44,725
190,750 364,200 32,580.00 + 24% 190,750 95,375 182,100 16,290.00 + 24% 95,375
364,200 462,500 74,208.00 + 32% 364,200 182,100 231,250 37,104.00 + 32% 182,100
462,500 693,750 105,664.00 + 35% 462,500 231,250 346,875 52,832.00 + 35% 231,250
693,750 ------ 186,601.50 + 37% 693,750 346,875 ------ 93,300.75 + 37% 346,875

Chapter 2 Estimated Tax for 2023 Page 29

Worksheet 2-1. 2023 Estimated Tax Worksheet Keep for Your Records

!
CAUTION
When this worksheet refers you to instructions, you can find those instructions in the 2023 Form 1040-ES.
1. Adjusted gross income you expect in 2023 (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
2a. Deductions
• If you plan to itemize deductions, enter the estimated total of your itemized deductions.
• If you don’t plan to itemize deductions, enter your standard deduction (see instructions) . . . . . . . . . . . . . . . . 2a.
b. If you can take the qualified business income deduction, enter the estimated amount of the deduction . . . . . . . . . . 2b.
c. Add lines 2a and 2b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2c.
3. Subtract line 2c from line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
4. Tax. Figure your tax on the amount on line 3 by using the 2023 Tax Rate Schedules.
Caution: If you will have qualified dividends or a net capital gain, or expect to exclude or deduct foreign earned
income or housing, see Worksheets 2-5 and 2-6 to figure the tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5. Alternative minimum tax from Form 6251 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.
6. Add lines 4 and 5. Add to this amount any other taxes you expect to include in the total on Form 1040 or 1040-SR,
line 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.
7. Credits (see instructions). Don’t include any income tax withholding on this line . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
8. Subtract line 7 from line 6. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.
9. Self-employment tax (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.
10. Other taxes including, if applicable, Additional Medicare Tax and/or NIIT (see instructions) . . . . . . . . . . . . . . . . . . 10.
11a. Add lines 8 through 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11a.
b. Earned income credit, additional child tax credit, fuel tax credit, net premium tax credit, refundable American
opportunity credit, and section 1341 credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11b.
c. Total 2023 estimated tax. Subtract line 11b from line 11a. If zero or less, enter -0- . . . . . . . . . . . . . . . . . ▶ 11c.
12a. Multiply line 11c by 90% (0.90) (662/3%
(0.6667) for farmers and
fishermen) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12a.
b. Required annual payment based on prior year's tax (see instructions) . . . . . . . 12b.
c. Required annual payment to avoid a penalty. Enter the smaller of line 12a or 12b . . . . . . . . . . . . . . . ▶ 12c.
Caution: Generally, if you don’t prepay (through income tax withholding and estimated tax payments) at least the
amount on line 12c, you may owe a penalty for not paying enough estimated tax. To avoid a penalty, make sure
your estimate on line 11c 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 11c.

13. Income tax withheld and estimated to be withheld during 2023 (including income tax withholding on pensions,
annuities, certain deferred income, etc.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.
14a. Subtract line 13 from line 12c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14a.
Is the result zero or less?
Yes. Stop here. You are not required to make estimated tax payments.
No. Go to line 14b.
b. Subtract line 13 from line 11c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14b.
Is the result less than $1,000?
Yes. Stop here. You are not required to make estimated tax payments.
No. Go to line 15 to figure your required payment.
15. If the first payment you are required to make is due April 18, 2023, enter ¼ of line 14a (minus any 2022
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.

Page 30 Chapter 2 Estimated Tax for 2023

Worksheet 2-2. 2023 Estimated Tax Worksheet—Line 1
Estimated Taxable Social Security and Railroad Retirement
Benefits Keep for Your Records
Note. If you are using this worksheet to estimate your taxable social security or railroad retirement benefits for Worksheet 2-7, 2023
Annualized Estimated Tax Worksheet, multiply the expected amount of benefits for each period by the annualization amount shown on
Worksheet 2-7, line 2, for the same period before entering it on line 1 below.

1. Enter your expected social security and railroad retirement benefits . . . . . . . . . . . . . . . . 1.

2. Enter one-half of line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
3. Enter your expected total income. Don’t include any social security and railroad
retirement benefits, nontaxable interest income, nontaxable IRA distributions, or
nontaxable pension distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
4. Enter your expected nontaxable interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5. Enter (as a positive amount) the total of any expected exclusions or deductions for:
• U.S. savings bond interest used for higher education expenses (Form 8815)
• Employer-provided adoption benefits (Form 8839)
• Foreign earned income or housing (Form 2555)
• Income by bona fide residents of American Samoa (Form 4563) or Puerto
Rico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.
6. Add lines 2, 3, 4, and 5 .................................................. 6.
7. Enter your expected adjustments to income. Don’t include any student loan
interest deduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
8. Subtract line 7 from line 6. If zero or less, stop here.
Note. Don’t include any social security or railroad retirement benefits in the amount on
line 1 of your 2023 Estimated Tax Worksheet (Worksheet 2-1) (or Annualized Estimated
Tax Worksheet (Worksheet 2-7)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.
9. Enter $25,000 ($32,000 if you expect to file married filing jointly; $0 if you expect to file
married filing separately and expect to live with your spouse at any time during the
year) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.
10. Subtract line 9 from line 8. If zero or less, stop here.
Note. Don’t include any social security or railroad retirement benefits in the amount on
line 1 of your Worksheet 2-1 (or Annualized Estimated Tax Worksheet (Worksheet
2-7)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.
11. Enter $9,000 ($12,000 if you expect to file married filing jointly; $0 if you expect to file
married filing separately and expect to live with your spouse at any time during the
year) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.
12. Subtract line 11 from line 10. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.
13. Enter the smaller of line 10 or line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.
14. Enter one-half of line 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.
15. Enter the smaller of line 2 or line 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.
16. Multiply line 12 by 85% (0.85). If line 12 is zero, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . 16.
17. Add lines 15 and 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.
18. Multiply line 1 by 85% (0.85) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.
19. Enter the smaller of line 17 or line 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.
20. Expected taxable social security and railroad retirement benefits for the period.
Divide line 19 by the annualization amount shown on Worksheet 2-7, line 2, for the same
period and enter here. Include this amount in the total on line 1 of your 2023 Estimated
Tax Worksheet (Worksheet 2-1) (or Annualized Estimated Tax Worksheet (Worksheet
2-7)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.

Chapter 2 Estimated Tax for 2023 Page 31

Worksheet 2-3. 2023 Estimated Tax Worksheet—Lines 1 and 9
Estimated Self-Employment Tax and Deduction Worksheet Keep for Your Records
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% (0.9235). If less than $400, don’t complete this
worksheet; you won’t owe self-employment tax on your expected net
earnings from self-employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
4. Multiply line 3 by 2.9% (0.029) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5. Maximum income subject to social security tax . . . . . . . . . . . . . . . . . . . . . 5. $160,200

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% (0.124) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.
10. Add line 4 and line 9. Enter the result here and on line 9 of your 2023 Estimated Tax Worksheet
(Worksheet 2-1) (or line 15 of the Annualized Estimated Tax Worksheet (Worksheet 2-7)) . . . . . . . . . 10.
11. Multiply line 10 by 50% (0.50). This is your expected deduction for self-employment tax on Schedule 1
(Form 1040), line 15. Subtract this amount when figuring your AGI on line 1 of your 2023 Estimated
Tax Worksheet (Worksheet 2-1) (or Annualized Estimated Tax Worksheet (Worksheet 2-7)) . . . . . . . 11.

*Net profit from self-employment is found on Schedule C, Schedule F, and Schedule K-1 (Form 1065).

Page 32 Chapter 2 Estimated Tax for 2023

Worksheet 2-4. 2023 Estimated Tax Worksheet—Line 2
Standard Deduction Worksheet Keep for Your Records
Caution. Don’t complete this worksheet if you expect your spouse to itemize on a separate return or you expect to be a dual-status alien. In
either case, your standard deduction will be zero.

1. Enter the amount shown below for your filing status.

• Single or married filing separately—$13,850
• Married filing jointly or Qualifying surviving spouse—$27,700
• Head of household—$20,800 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
2. Can you (or your spouse if filing jointly) be claimed as a dependent on someone else's
return?
No. Skip line 3; enter the amount from line 1 on line 4.

Yes. Go to line 3.

3. Is your earned income* more than $750?

Yes. Add $400 to your earned income. Enter the total.

No. Enter $1,250 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 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, 1959, or blind?
No. Go to line 6.

Yes. Check if:

a. You were Born before January 2, 1959 Blind

b. Your spouse was Born before January 2, 1959 Blind

c. Total boxes checked in 5a and 5b

▶ Multiply $1,500 ($1,850 if single or head of household) by the number in the box on line 5c . . . . . . . . 5.

6. Standard deduction. Add lines 4 and 5. Enter the result here and on line 2 of your 2023 Estimated Tax
Worksheet (Worksheet 2-1) (or line 7 of your 2023 Annualized Estimated Tax Worksheet (Worksheet
2-7)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.

* Earned income includes wages, salaries, tips, professional fees, and other compensation received for personal services you performed. It also includes taxable scholarships and
fellowship grants. Reduce your earned income by your allowed deduction for self-employment tax (Worksheet 2-3, line 11).

Chapter 2 Estimated Tax for 2023 Page 33

Worksheet 2-5. 2023 Estimated Tax Worksheet—Line 4
Qualified Dividends and Capital Gain Tax Worksheet
Keep for Your Records

1. Enter the amount from the appropriate worksheet.

• Line 3 of your 2023 Estimated Tax Worksheet.
• Line 3 of Worksheet 2-6 (use if you will exclude or deduct foreign earned
income or housing) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
2. Enter your qualified dividends expected for
20231 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
3. Enter your net capital gain expected for 20231 . . . . . . 3.
4. Add lines 2 and 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5. Enter your 28% rate gain or loss expected for
20232 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.
6. Enter your unrecaptured section 1250 gain expected for
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 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 $89,250 ($44,625 if single
or married filing separately, or $59,750 if head of
household) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.
12. Enter the smaller of line 10 or line 11 ........... 12.
13 a. Subtract line 4 from line 1. If zero or less,
enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13a.
b. Enter the smaller of line 1 or:
• $182,100 if single or married filing separately;
• $182,100 if head of household; or
• $364,200 if married filing jointly or qualifying
surviving spouse . . . . . . . . . . . . . . . . . . . . . . b.
c. Enter the smaller of line 10 or line 13b . . . . . . . . . c.
14. Enter the larger of line 13a or 13c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.
Note. If line 11 and line 12 are the same, skip line 15 and go to line 16.
15. Subtract line 12 from line 11. This is the amount taxed at 0% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.
Note. If lines 1 and 11 are the same, skip lines 16 through 36 and go to line 37.
16. Enter the smaller of line 1 or line 9 ............................. 16.
17. Enter the amount from line 15. If line 15 is blank, enter -0- . . . . . . . . . . . . . . 17.
18. Subtract line 17 from line 16. If zero or less, enter -0- . . . . . . . . . . . . . . . . . 18.
19. Enter:
• $492,300 if single,
• $276,900 if married filing separately,
• $553,850 if married filing jointly or qualifying surviving spouse, or
• $523,050 if head of household . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.
20. Enter the smaller of line 1 or line 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.
21. Add lines 14 and 15 . . . . . . . . . . . . . . . . . . . . . . . . 21.
22. Subtract line 21 from line 20. If zero or less,
enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.
23. Enter the smaller of line 18 or line 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.
24. Multiply line 23 by 15% (0.15) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.
25. Add lines 17 and 23. If line 1 equals the sum of lines 21 and 23, skip lines 26
through 36 and go to line 37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.
26. Subtract line 25 from line 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.
27. Multiply line 26 by 20% (0.20) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.
28. Enter the smaller of line 3 or line 6 ............................. 28.
29. Add lines 4 and 14 . . . . . . . . . . . . . . . . . . . . . . . . . 29.
30. Enter the amount from line 1 above . . . . . . . . . . . . . 30.
31. Subtract line 30 from line 29. If zero or less, enter -0- . . . . . . . . . . . . . . . . . 31.
32. Subtract line 31 from line 28. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.
33. Multiply line 32 by 25% (0.25) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33.
Note. If line 5 is zero or blank, skip lines 34 through 36 and go to line 37.
34. Add lines 14, 15, 23, 26, and 32 ................................................ 34.
35. Subtract line 34 from line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35.

Page 34 Chapter 2 Estimated Tax for 2023

Worksheet 2-5. 2023 Estimated Tax Worksheet—Line 4
Qualified Dividends and Capital Gain Tax Worksheet (Continued) Keep for Your Records
36. Multiply line 35 by 28% (0.28) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.
37. Figure the tax on the amount on line 14 from the 2023 Tax Rate Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.
38. Add lines 24, 27, 33, 36, and 37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.
39. Figure the tax on the amount on line 1 from the 2023 Tax Rate Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.
40. Tax on all taxable income (including capital gains and qualified dividends). Enter the smaller of line 38
or line 39 here and on line 4 of the 2023 Estimated Tax Worksheet (Worksheet 2-1) (or line 4 of Worksheet 2-6) ........ 40.
1
If you expect to deduct investment interest expense, don’t include on this line any qualified dividends or net capital gain that you will elect to treat as
investment income.
2
This includes a section 1202 exclusion from eligible gain on qualified small business stock and gain or loss from the sale or exchange of collectibles. See the
Instructions for Schedule D (Form 1040) for more information.

Worksheet 2-6. 2023 Estimated Tax Worksheet—Line 4

Foreign Earned Income Tax Worksheet Keep for Your Records
Before you begin: If line 3 of your 2023 Estimated Tax Worksheet (Worksheet 2-1) is zero, don’t complete this worksheet.
1. Enter the amount from line 3 of your 2023 Estimated Tax Worksheet (Worksheet 2-1) . . . . . . . . . . . . . . . . . 1.
2. Enter the total foreign earned income and housing amount you (and your spouse if filing jointly) expect to
exclude or deduct in 2023 on Form 2555 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
3. Add lines 1 and 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
4. Tax on the amount on line 3. Use the 2023 Tax Rate Schedules or Worksheet 2-5,* as
appropriate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5. Tax on the amount on line 2. Use the 2023 Tax Rate Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.
6. Subtract line 5 from line 4. Enter the result here and on line 4 of your 2023 Estimated Tax Worksheet
(Worksheet 2-1). If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.

*If using Worksheet 2-5 (Qualified Dividends and Capital Gain Tax Worksheet), enter the amount from line 3 above on line 1 of
Worksheet 2-5. Complete Worksheet 2-5 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 3 of your 2023 Estimated Tax Worksheet
(Worksheet 2-1) from line 9 of Worksheet 2-5. If the result is more than zero, that amount is your capital gain excess.
Make these modifications only for purposes of filling out Worksheet 2-6.
a. Reduce (but not below zero) the amount you otherwise would enter on line 3 of Worksheet 2-5 by your capital
gain excess.
b. Reduce (but not below zero) the amount you otherwise would enter on line 2 of Worksheet 2-5 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 2-5 by your capital
gain excess.
d. Reduce (but not below zero) the amount you otherwise would enter on line 6 of Worksheet 2-5 by your capital
gain excess.

Chapter 2 Estimated Tax for 2023 Page 35

Worksheet 2-7. 2023 Annualized Estimated Tax Worksheet Keep for Your Records
Note. For instructions, see Annualized Income Installment Method, earlier.

Before you begin: Complete the 2023 Estimated Tax Worksheet—Worksheet 2-1.
Section A (For Figuring Your Annualized Estimated Tax Payments—Complete each column after end of period shown.
Estates and trusts: See Form 1041-ES and Form 2210 for more information. (a) (b) (c) (d)
1/1/23–3/31/23 1/1/23–5/31/23 1/1/23–8/31/23 1/1/23–
12/31/23
1. Adjusted gross income (AGI) for each period (see instructions). Complete
Section B first . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
2. Annualization amounts .................................... 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). If you take the deduction for qualified business
income, add it to your itemized deductions. All others, enter -0- and skip to
line 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5. Annualization amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. 4 2.4 1.5 1
6. Multiply line 4 by line 5 .................................... 6.
7. Standard deduction from Worksheet 2-4 (see instructions) . . . . . . . . . . . . 7.
8. Enter the larger of line 6 or line 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.
9. Deduction for qualified business income . . . . . . . . . . . . . . . . . . . . . . . . . 9.
10. Add lines 8 and 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.
11. Subtract line 10 from line 3. If zero or less, enter -0- . . . . . . . . . . . . . . . . . 11.
12. Figure your tax on the amount on line 11 (see instructions) . . . . . . . . . . . . 12.
13. For each period, enter any tax from Forms 8814, 4972, and 6251. Also,
include any recapture of education credits (see instructions) . . . . . . . . . . . 13.
14. Add lines 12 and 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.
15. Enter nonrefundable credits for each period (see instructions) . . . . . . . . . . 15.
16. Subtract line 15 from line 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.
17. Self-employment tax from line 41 of Section B . . . . . . . . . . . . . . . . . . . . . 17.
18. Enter other taxes for each period, including, if applicable, Additional Medicare
Tax and/or NIIT (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.
19. Total tax. Add lines 16, 17, and 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.
20. Enter refundable credits for each period (see instructions for type of credits
allowed). Don’t include any income tax withholding on this line . . . . . . . . . 20.
21. Subtract line 20 from line 19. If zero or less, enter -0- . . . . . . . . . . . . . . . . 21.
22. Applicable percentage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22. 22.5% 45% 67.5% 90%
23. Multiply line 21 by line 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.
Complete lines 24 through 29 of one column before going to line 24 of
the next column.
24. Enter the total of the amounts in all previous columns of line 29 . . . . . . . . . 24.
25. Annualized income installment. Subtract line 24 from line 23. If zero or less,
enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.
26. Enter 25% (0.25) of line 12c of your 2023 Estimated Tax Worksheet
(Worksheet 2-1) in each column . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.
27. Subtract line 29 of the previous column from line 28 of that column . . . . . . . 27.
28. Add lines 26 and 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.
29. Enter the smaller of line 25 or line 28 (see instructions) . . . . . . . . . . . . . . 29.
30. Total required payments for the period. Add lines 24 and 29 . . . . . . . . . . . 30.
31. Estimated tax payments made (line 32 of all previous columns) plus tax
withholding through the due date for the period (see instructions) . . . . . . . . 31.
32. Estimated tax payment required by the next due date. Subtract line 31 from
line 30 and enter the result (but not less than zero) here and on your payment
voucher . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.

Page 36 Chapter 2 Estimated Tax for 2023

Worksheet 2-7. 2023 Annualized Estimated Tax Worksheet (Continued) Keep for Your Records
Section B (For Figuring Your Annualized Estimated Self-Employment Tax)—Complete each column after end of period shown.

(a) (b) (c) (d)

(Form 1040 or 1040-SR filers only)
1/1/23–3/31/23 1/1/23–5/31/23 1/1/23–8/31/23 1/1/23–12/31/23
33. Net earnings from self-employment for the period .......... 33.

34. Prorated social security tax limit . . . . . . . . . . . . . . . . . . . . . . . 34. $40,050 $66,750 $106,800 $160,200
35. Enter actual wages for the period subject to social security tax or
the 6.2% portion of the tier 1 railroad retirement tax.
Exception: If you file Form 4137 or Form 8919, see
instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35.
36. Subtract line 35 from line 34. If zero or less, enter -0- . . . . . . . . 36.
37. Annualization amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37. 0.496 0.2976 0.186 0.124
38. Multiply line 37 by the smaller of line 33 or line 36 . . . . . . . . . . 38.
39. Annualization amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39. 0.116 0.0696 0.0435 0.029
40. Multiply line 33 by line 39 . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.
41. Add lines 38 and 40. Enter the result here and on line 17 of
Section A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.
42. Annualization amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42. 8 4.8 3 2
43. Deduction for self-employment tax. Divide line 41 by line 42.
Enter the result here. Use this result to figure your AGI on
line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.

Chapter 2 Estimated Tax for 2023 Page 37

Worksheet 2-8. 2023 Annualized Estimated Tax Worksheet—Line 10
Qualified Dividends and Capital Gain Tax Worksheet Keep for Your Records
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 2-7 for the same period.
1. Enter the amount from the appropriate worksheet.
• Line 11 of your 2023 Annualized Estimated Tax Worksheet
(Worksheet 2-7).
• Line 3 of Worksheet 2-9 (use if you will exclude or deduct foreign earned
income or housing) . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . 1.
2. Enter your annualized qualified dividends expected for
20231 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
3. Enter your annualized net capital gain expected
for 20231 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
4. Add lines 2 and 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5. Enter your annualized 28% rate gain or loss expected
for 20232 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.
6. Enter your annualized unrecaptured section 1250 gain
expected for 2023 . . . . . . . . . . . . . . . . . . . . . . . . . 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 $89,250 ($44,625 if single
or married filing separately, or $59,750 if head of
household) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.
12. Enter the smaller of line 10 or line 11 . . . . . . . . . . . . 12.
13. a. Subtract line 4 from line 1. If zero or less,
enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13a.
b. Enter the smaller of line 1 or:
• $182,100 if single or married filing separately;
• $182,100 if head of household; or
• $364,200 if married filing jointly or qualifying
surviving spouse . . . . . . . . . . . . . . . . . . . . . . b.
c. Enter the smaller of line 10 or line 13b . . . . . . . . . c.
14. Enter the larger of line 13a or 13c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.
Note. If line 11 and line 12 are the same, skip line 15 and go to line 16 .
15. Subtract line 12 from line 11. This is the amount taxed at 0% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.
Note. If lines 1 and 11 are the same, skip lines 16 through 36 and go to line 37.
16. Enter the smaller of line 1 or line 9 ............................. 16.
17. Enter the amount from line 15. If line 15 is blank, enter -0- . . . . . . . . . . . . . . 17.
18. Subtract line 17 from line 16. If zero or less, enter -0- . . . . . . . . . . . . . . . . . 18.
19. Enter:
• $492,300 if single,
• $276,900 if married filing separately,
• $553,850 if married filing jointly or qualifying surviving spouse, or
• $523,050 if head of household . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.
20. Enter the smaller of line 1 or line 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.
21. Add lines 14 and 15 . . . . . . . . . . . . . . . . . . . . . . . . 21.
22. Subtract line 21 from line 20. If zero or less,
enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.
23. Enter the smaller of line 18 or line 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.
24. Multiply line 23 by 15% (0.15) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.
25. Add lines 17 and 23. If line 1 equals the sum of lines 21 and 23, skip lines 26
through 36 and go to line 37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.
26. Subtract line 25 from line 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.
27. Multiply line 26 by 20% (0.20) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.
28. Enter the smaller of line 3 or line 6 ............................. 28.
29. Add lines 4 and 14 . . . . . . . . . . . . . . . . . . . . . . . . . 29.
30. Enter the amount from line 1 above . . . . . . . . . . . . . 30.
31. Subtract line 30 from line 29. If zero or less, enter -0- . . . . . . . . . . . . . . . . . 31.
32. Subtract line 31 from line 28. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.
33. Multiply line 32 by 25% (0.25) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33.
Note. If line 5 is zero or blank, skip lines 34 through 36 and go to line 37.
34. Add lines 14, 15, 23, 26, and 32 ................................................ 34.
35. Subtract line 34 from line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35.

Page 38 Chapter 2 Estimated Tax for 2023

Worksheet 2-8. 2023 Annualized Estimated Tax Worksheet—Line 10
Qualified Dividends and Capital Gain Tax Worksheet
(Continued) Keep for Your Records
36. Multiply line 35 by 28% (0.28) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.
37. Figure the tax on the amount on line 14 from the 2023 Tax Rate Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.
38. Add lines 24, 27, 33, 36, and 37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.
39. Figure the tax on the amount on line 1 from the 2023 Tax Rate Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.
40. Tax on all taxable income (including capital gains and qualified dividends). Enter the smaller of line 38 or
line 39 here and on line 12 of the appropriate column of the 2023 Annualized Estimated Tax Worksheet (or line 4 of
Worksheet 2-9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.
1
If you expect to deduct investment interest expense, don’t include on this line any qualified dividends or net capital gain that you will elect to treat as
investment income.
2
This includes a section 1202 exclusion from eligible gain on qualified small business stock and gain or loss from the sale or exchange of collectibles. See the
Instructions for Schedule D (Form 1040) for more information.

Worksheet 2-9. 2023 Annualized Estimated Tax Worksheet—Line 10

Foreign Earned Income Tax Worksheet Keep for Your Records
Before you begin: If line 11 of Worksheet 2-7 (2023 Annualized Estimated Tax Worksheet) is zero for the period, don’t complete this
worksheet.

1. Enter the amount from line 11 of your 2023 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 . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
3. Add lines 1 and 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
4. Tax on the amount on line 3. Use the 2023 Tax Rate Schedules or Worksheet 2-8,** as
appropriate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5. Tax on the amount on line 2. Use the 2023 Tax Rate Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.
6. Subtract line 5 from line 4. Enter the result here and on line 12 of your 2023 Annualized Estimated Tax
Worksheet (Worksheet 2-7). 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 2-7 for the same period.
** If using Worksheet 2-8 (Qualified Dividends and Capital Gain Tax Worksheet), enter the amount from line 3 above on
line 1 of Worksheet 2-8. Complete Worksheet 2-8 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 2-7 from line 9 of Worksheet 2-8. If the result is more than zero, that amount is your capital gain excess.
No capital gain excess. If you don’t have a capital gain excess, complete the rest of Worksheet 2-8 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 2-8 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 2-9.
a. Reduce (but not below zero) the amount you otherwise would enter on line 3 of Worksheet 2-8 by your capital gain excess.
b. Reduce (but not below zero) the amount you otherwise would enter on line 2 of Worksheet 2-8 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 2-8 by your capital gain excess.
d. Reduce (but not below zero) the amount you otherwise would enter on line 6 of Worksheet 2-8 by your capital gain excess.

Publication 505 (2023) Page 39

 • The Online EIN Application (IRS.gov/EIN) agents, and individuals who process Form W-2,

How To Get Tax Help helps you get an employer identification

number (EIN) at no cost.
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to IRS.gov/FreeFile to see if you qualify for tive links to help you find answers to your lingual customers by offering OPI services. The
free online federal tax preparation, e-filing, questions. OPI Service is a federally funded program and
and direct deposit or payment options. • You may also be able to access tax law in- is available at Taxpayer Assistance Centers
• VITA. The Volunteer Income Tax Assis- formation in your electronic filing software. (TACs), other IRS offices, and every VITA/TCE
tance (VITA) program offers free tax help return site. The OPI Service is accessible in
to people with low-to-moderate incomes, more than 350 languages.
Need someone to prepare your tax return?
persons with disabilities, and limited-Eng- There are various types of tax return preparers,
lish-speaking taxpayers who need help Accessibility Helpline available for taxpay-
including enrolled agents, certified public ac-
preparing their own tax returns. Go to ers with disabilities. Taxpayers who need in-
countants (CPAs), accountants, and many oth-
IRS.gov/VITA, download the free IRS2Go formation about accessibility services can call
ers who don’t have professional credentials. If
app, or call 800-906-9887 for information 833-690-0598. The Accessibility Helpline can
you choose to have someone prepare your tax
on free tax return preparation. answer questions related to current and future
return, choose that preparer wisely. A paid tax
• TCE. The Tax Counseling for the Elderly preparer is: accessibility products and services available in
(TCE) program offers free tax help for all alternative media formats (for example, braille,
• Primarily responsible for the overall sub-
taxpayers, particularly those who are 60 large print, audio, etc.). The Accessibility Help-
stantive accuracy of your return,
years of age and older. TCE volunteers line does not have access to your IRS account.
• Required to sign the return, and
specialize in answering questions about For help with tax law, refunds, or account-rela-
• Required to include their preparer tax iden-
pensions and retirement-related issues ted issues, go to IRS.gov/LetUsHelp.
tification number (PTIN).
unique to seniors. Go to IRS.gov/TCE,
download the free IRS2Go app, or call Note. Form 9000, Alternative Media Prefer-
Although the tax preparer always signs the
888-227-7669 for information on free tax ence, or Form 9000(SP) allows you to elect to
return, you're ultimately responsible for provid-
return preparation. receive certain types of written correspondence
ing all the information required for the preparer
• MilTax. Members of the U.S. Armed to accurately prepare your return. Anyone paid in the following formats.
Forces and qualified veterans may use Mil- to prepare tax returns for others should have a • Standard Print.
Tax, a free tax service offered by the De- thorough understanding of tax matters. For • Large Print.
partment of Defense through Military One- more information on how to choose a tax pre-
Source. For more information, go to • Braille.
parer, go to Tips for Choosing a Tax Preparer
MilitaryOneSource (MilitaryOneSource.mil/ on IRS.gov. • Audio (MP3).
MilTax).
Also, the IRS offers Free Fillable • Plain Text File (TXT).
Coronavirus. Go to IRS.gov/Coronavirus for
Forms, which can be completed online and links to information on the impact of the corona- • Braille Ready File (BRF).
then filed electronically regardless of in- virus, as well as tax relief available for individu-
come. als and families, small and large businesses, Disasters. Go to Disaster Assistance and
and tax-exempt organizations. Emergency Relief for Individuals and
Using online tools to help prepare your re- Businesses to review the available disaster tax
turn. Go to IRS.gov/Tools for the following. Employers can register to use Business relief.
• The Earned Income Tax Credit Assistant Services Online. The Social Security Adminis-
(IRS.gov/EITCAssistant) determines if tration (SSA) offers online service at SSA.gov/ Getting tax forms and publications. Go to
you’re eligible for the earned income credit employer for fast, free, and secure online W-2 IRS.gov/Forms to view, download, or print all
(EIC). filing options to CPAs, accountants, enrolled the forms, instructions, and publications you

Page 40 Publication 505 (2023)

may need. Or, you can go to IRS.gov/ sonal or financial information. This in- What if I can’t pay now? Go to IRS.gov/
OrderForms to place an order. cludes requests for personal identification Payments for more information about your op-
numbers (PINs), passwords, or similar in- tions.
Getting tax publications and instructions in formation for credit cards, banks, or other • Apply for an online payment agreement
eBook format. You can also download and financial accounts. (IRS.gov/OPA) to meet your tax obligation
view popular tax publications and instructions • Go to IRS.gov/IdentityTheft, the IRS Iden- in monthly installments if you can’t pay
(including the Instructions for Form 1040) on tity Theft Central webpage, for information your taxes in full today. Once you complete
mobile devices as eBooks at IRS.gov/eBooks. on identity theft and data security protec- the online process, you will receive imme-
tion for taxpayers, tax professionals, and diate notification of whether your agree-
Note. IRS eBooks have been tested using businesses. If your SSN has been lost or ment has been approved.
Apple's iBooks for iPad. Our eBooks haven’t stolen or you suspect you’re a victim of • Use the Offer in Compromise Pre-Qualifier
been tested on other dedicated eBook readers, tax-related identity theft, you can learn to see if you can settle your tax debt for
and eBook functionality may not operate as in- what steps you should take. less than the full amount you owe. For
tended. • Get an Identity Protection PIN (IP PIN). IP more information on the Offer in Compro-
PINs are six-digit numbers assigned to tax- mise program, go to IRS.gov/OIC.
Access your online account (individual tax- payers to help prevent the misuse of their
payers only). Go to IRS.gov/Account to se- SSNs on fraudulent federal income tax re- Filing an amended return. Go to IRS.gov/
curely access information about your federal tax turns. When you have an IP PIN, it pre- Form1040X for information and updates.
account. vents someone else from filing a tax return
• View the amount you owe and a break- with your SSN. To learn more, go to Checking the status of your amended re-
down by tax year. IRS.gov/IPPIN. turn. Go to IRS.gov/WMAR to track the status
• See payment plan details or apply for a of Form 1040-X amended returns.
new payment plan. Ways to check on the status of your refund.
• Make a payment or view 5 years of pay- • Go to IRS.gov/Refunds. Note. It can take up to 3 weeks from the
ment history and any pending or sched- • Download the official IRS2Go app to your date you filed your amended return for it to
uled payments. mobile device to check your refund status. show up in our system, and processing it can
• Access your tax records, including key • Call the automated refund hotline at take up to 16 weeks.
data from your most recent tax return, and 800-829-1954.
transcripts. Understanding an IRS notice or letter
• View digital copies of select notices from Note. The IRS can’t issue refunds before you’ve received. Go to IRS.gov/Notices to
the IRS. mid-February for returns that claimed the EIC or find additional information about responding to
• Approve or reject authorization requests the additional child tax credit (ACTC). This ap- an IRS notice or letter.
from tax professionals. plies to the entire refund, not just the portion as-
• View your address on file or manage your sociated with these credits. Note. You can use Schedule LEP (Form
communication preferences. 1040), Request for Change in Language Prefer-
Making a tax payment. Go to IRS.gov/ ence, to state a preference to receive notices,
Tax Pro Account. This tool lets your tax pro- Payments for information on how to make a letters, or other written communications from
fessional submit an authorization request to ac- payment using any of the following options. the IRS in an alternative language. You may not
cess your individual taxpayer IRS online • IRS Direct Pay: Pay your individual tax bill immediately receive written communications in
account. For more information, go to IRS.gov/ or estimated tax payment directly from the requested language. The IRS’s commitment
TaxProAccount. your checking or savings account at no to LEP taxpayers is part of a multi-year timeline
cost to you. that is scheduled to begin providing translations
Using direct deposit. The fastest way to re- • Debit or Credit Card: Choose an approved in 2023. You will continue to receive communi-
ceive a tax refund is to file electronically and payment processor to pay online or by cations, including notices and letters in English,
choose direct deposit, which securely and elec- phone. until they are translated to your preferred lan-
tronically transfers your refund directly into your • Electronic Funds Withdrawal: Schedule a guage.
financial account. Direct deposit also avoids the payment when filing your federal taxes us-
possibility that your check could be lost, stolen, ing tax return preparation software or Contacting your local IRS office. Keep in
destroyed, or returned undeliverable to the IRS. through a tax professional. mind, many questions can be answered on
Eight in 10 taxpayers use direct deposit to re- • Electronic Federal Tax Payment System: IRS.gov without visiting an IRS TAC. Go to
ceive their refunds. If you don’t have a bank ac- Best option for businesses. Enrollment is IRS.gov/LetUsHelp for the topics people ask
count, go to IRS.gov/DirectDeposit for more in- required. about most. If you still need help, IRS TACs
formation on where to find a bank or credit • Check or Money Order: Mail your payment provide tax help when a tax issue can’t be han-
union that can open an account online. to the address listed on the notice or in- dled online or by phone. All TACs now provide
structions. service by appointment, so you’ll know in ad-
Getting a transcript of your return. The • Cash: You may be able to pay your taxes vance that you can get the service you need
quickest way to get a copy of your tax transcript with cash at a participating retail store. without long wait times. Before you visit, go to
is to go to IRS.gov/Transcripts. Click on either • Same-Day Wire: You may be able to do IRS.gov/TACLocator to find the nearest TAC
“Get Transcript Online” or “Get Transcript by same-day wire from your financial institu- and to check hours, available services, and ap-
Mail” to order a free copy of your transcript. If tion. Contact your financial institution for pointment options. Or, on the IRS2Go app, un-
you prefer, you can order your transcript by call- availability, cost, and time frames. der the Stay Connected tab, choose the Con-
ing 800-908-9946. tact Us option and click on “Local Offices.”
Note. The IRS uses the latest encryption
Reporting and resolving your tax-related
identity theft issues.
technology to ensure that the electronic pay-
ments you make online, by phone, or from a
The Taxpayer Advocate
• Tax-related identity theft happens when mobile device using the IRS2Go app are safe Service (TAS) Is Here To
someone steals your personal information and secure. Paying electronically is quick, easy, Help You
to commit tax fraud. Your taxes can be af- and faster than mailing in a check or money or-
fected if your SSN is used to file a fraudu- What Is TAS?
der.
lent return or to claim a refund or credit.
TAS is an independent organization within the
• The IRS doesn’t initiate contact with tax- IRS that helps taxpayers and protects taxpayer
payers by email, text messages (including rights. Their job is to ensure that every taxpayer
shortened links), telephone calls, or social
media channels to request or verify per-

Publication 505 (2023) Page 41

is treated fairly and that you know and under- • You face (or your business is facing) an TAS for Tax Professionals
stand your rights under the Taxpayer Bill of immediate threat of adverse action; or
Rights. • You’ve tried repeatedly to contact the IRS TAS can provide a variety of information for tax
but no one has responded, or the IRS professionals, including tax law updates and
How Can You Learn About Your hasn’t responded by the date promised. guidance, TAS programs, and ways to let TAS
Taxpayer Rights? know about systemic problems you’ve seen in
How Can You Reach TAS? your practice.
The Taxpayer Bill of Rights describes 10 basic
rights that all taxpayers have when dealing with TAS has offices in every state, the District of
the IRS. Go to TaxpayerAdvocate.IRS.gov to Columbia, and Puerto Rico. Your local advo-
Low Income Taxpayer
help you understand what these rights mean to cate’s number is in your local directory and at Clinics (LITCs)
you and how they apply. These are your rights. TaxpayerAdvocate.IRS.gov/Contact-Us. You
Know them. Use them. can also call them at 877-777-4778. LITCs are independent from the IRS. LITCs
represent individuals whose income is below a
What Can TAS Do for You? How Else Does TAS Help certain level and need to resolve tax problems
Taxpayers? with the IRS, such as audits, appeals, and tax
TAS can help you resolve problems that you collection disputes. In addition, LITCs can pro-
can’t resolve with the IRS. And their service is TAS works to resolve large-scale problems that vide information about taxpayer rights and re-
free. If you qualify for their assistance, you will affect many taxpayers. If you know of one of sponsibilities in different languages for individu-
be assigned to one advocate who will work with these broad issues, report it to them at IRS.gov/ als who speak English as a second language.
you throughout the process and will do every- SAMS. Services are offered for free or a small fee for
thing possible to resolve your issue. TAS can eligible taxpayers. To find an LITC near you, go
help you if: to TaxpayerAdvocate.IRS.gov/about-us/Low-
• Your problem is causing financial difficulty Income-Taxpayer-Clinics-LITC or see IRS Pub.
for you, your family, or your business; 4134, Low Income Taxpayer Clinic List.

Page 42 Publication 505 (2023)

 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.

Tips 9
A Withholding rules 6 F M
Estates:
Additional Medicare Tax 22, 25 Farmers: Married taxpayers:
Estimated tax 20
Address change 27 Estimated tax 20, 22, 23 Estimated tax 20
Estimated tax:
Adjustments to income: Fiscal years 23 Military retirement pay 3, 10
Adjustments to income 21
Estimated tax 21 Gross income 20 Missing children, photographs
Aliens 20, 26 of 2
AGI: Joint returns 20
Amended tax 23
Expected AGI 21 Required annual payment 22
Annualized income installment N
Alaska Native Corporations 11 method 25 Withholding for farmworkers 3
Aliens: Change in amount 23 Figures: Net investment income tax 22,
Nonresident aliens 20 Change of address 27 Tables and figures (See Tables 25
Annualized estimated tax and figures) NIIT 22, 25
Crediting of overpayment 26
worksheets 36, 37 Fiscal years: Noncitizens:
Estates and trusts 20
Annualized - Capital gains 38 Estimated tax 23 Estimated tax 20
Expected AGI 21
Annualized - Foreign Earned Farmers and fishermen 23 Nonqualified deferred
Income 39 Expected taxable income 21
Fishermen: compensation 10
Annualized - Qualified Expected taxes and credits 21
Estimated tax 20, 22, 23 Nonresident aliens:
dividends 38 Farmers and fishermen 20, 22,
23 Fiscal years 23 Estimated tax 20, 26
Annualized income installment Gross income 20
method 25 Fiscal year taxpayers 23 Individual taxpayer identification
Higher income individuals 22 Joint returns 20 numbers (ITINs) 12
Annuities 10
How to figure 21, 23 Required annual payment 22
Assistance (See Tax help)
How to pay 26 Form 1040-ES 19, 26 O
Instructions for Worksheet 2-7, Form 1040-ES (NR) 20
B Form 1041-ES 20
Overpayment:
annualized estimated tax 25 Crediting to estimated tax 26
Backup withholding 11, 12 Itemized deductions 21 Form 1099 series 11
Married taxpayers 20 Form W-2G 11
P
C Net capital gain 21, 25 Form W-4 worksheets:
No standard deduction 21 Tax withholding estimator 6 Part-year method of
Capital gains and losses: withholding 6
Nonresident aliens 26 Form W-4, Employee's Allowance
Annualized estimated tax 25 Withholding Certificate 3 Patronage dividends:
Estimated tax on net capital Overpayment 26
Form W-4P 10 Backup withholding 11
gain 21 Payment vouchers 27
Form W-4S 10 Payment vouchers 27
Qualified dividends 25 Payments not required 26
Form W-4V 11 Penalties:
Change of address 27 Regular installment method 23
Form W-7 12 Backup withholding 12
Commodity credit corporation Required annual payment 22
loans 11 Form W-9 12 Willfully false or fraudulent Form
Self-employment income 25
Fraud: W-4 9
Compensation 3 Sick pay 10
Form W-4 statements 9 Withholding allowances 9
Independent contractors, backup Standard deduction 21, 25
withholding 11 Fringe benefits 9 Pensions 10
Total estimated tax
Supplemental wages 8 New job 3
payments 22
Tips 9 G Rollovers 10
Types of taxes included 19
Wages and salaries 3 Wages and salaries withholding
Underpayment penalty 23 Gross income 20 rules compared 10
Crediting of overpayment 26 When to pay 22 Farming 20 Publications (See Tax help)
Credits: When to start payments 23 Fishing 20
Expected taxes and credits 21 Who does not have to pay 19
Criminal penalties: Who must pay 19
R
H
Willfully false or fraudulent Form Estimated tax worksheets 28, 30, Railroad retirement benefits:
W-4 9 31 Higher income individuals: Choosing to withhold 11
Crop insurance payments 11 2019 annualized estimated tax Required annual payment 22 Regular installment method,
Cumulative wage method of worksheet 36 Household workers 3 estimated tax 23
withholding 6 Amended estimated tax, Reimbursements 8
illustrated (Worksheet I Excess 8
D 2-10) 24 Reporting:
Capital gains 34 Individual retirement
Dividends: arrangements (IRAs) 10 Fringe benefits 9
Capital gains, tax on 21 Gambling winnings 11
Backup withholding 11 (See also Pensions)
Foreign earned income 35 (See also Retirement plans) Tips to employer 9
Underreported 12 Form 1040-ES 30
Domestic help 3 Interest income: Required annual payment 22
Qualified dividends 34 Backup withholding 11 Retirement plans
Definition 3 Railroad retirement benefits 31
Withholding 3 Underreported 12 Pension plans 10
Self-employment tax 32 Itemized deductions: Pensions 10
Social security benefits 31 Estimated tax, expected taxable Rollovers 10
E Standard deduction 33 income 21 Rollovers 10
Eligible rollover distributions 10 Exemption from withholding 6 Exemption from withholding 7 Royalties:
Employee business expenses: Claiming 7 Backup withholding 11
Accountable plans 8 Good for only one year 8 J
Nonaccountable plans 9 Itemized deductions 7
Joint returns: S
Reimbursements 8 Students 6
Farmers and fishermen 20 Salaries 3
Employer Identification Numbers Expenses:
(EINs) 12 Allowances 8 Saturday, Sunday, holiday
Employers: rule 23
Repaying withheld tax 6 Self-employment tax 25
Sick pay 9, 10

Publication 505 (2023) Page 43

Social security benefits: Fringe benefits 9 Annualized - Qualified dividends
Choosing to withhold 11 U Gambling winnings 11 (Worksheet 2-8) 38
Social security taxes: Getting right amount of tax Annualized estimated tax
Underpayment penalty: withheld 5, 6 (Worksheet 2-7) 36, 37
Taxpayer identification numbers
(TINs) 12 Amended estimated tax 23 Household workers 3 Capital gains tax worksheet:
Withholding obligation 2 Unemployment Nonperiodic payments 10 Worksheet 2-5 34
compensation 11 Dependents (age 65 or older or
Standard deduction 21, 25 Part-year method 6
Students 6 Penalties 9 blind) exemption from
Supplemental wages 8, 9
W Pensions 10
withholding (Worksheet
1-2) 13
Wages and salaries 3 Periodic payments 10 Estimated tax worksheets
T Withholding Railroad retirement benefits 11 (Worksheet 2-1) 30
Amount of tax withheld, Form Repaying withheld tax 6 Foreign earned income
Tables and figures: W-4 3 Rollovers 10 (Worksheet 2-6) 35
Do you have to pay estimated Annuities 10
tax? (Figure 2-A) 19 Salaries and wages 3 Qualified dividends:
Backup withholding 11 Sick pay 9 Worksheet 2-5 34
Due dates, estimated tax
(Table 2-1) 23 Changing 3 Social security (FICA) tax 2, 11 Railroad retirement benefits
Exemption from withholding on Checking amount of 4 Tips 9 (Worksheet 2-2) 31
Form W-4 (Figure 1-A) 7 Choosing not to withhold 10 Types of income 2, 3 Self-employment tax and
Worksheets, where to find 28 Cumulative wage method 6 Unemployment deduction (Worksheet
Domestic help 3 compensation 11 2-3) 32
Tax help 40
Employers' rules 6 Worksheets (blank): Social security benefits
Tax Rate Schedules 29
Estimated tax 22 (Worksheet 2-2) 31
Tax withholding estimator 6 Annualized - Capital gains
Exemption from 6 (Worksheet 2-8) 38 Standard deduction (Worksheet
Taxpayer identification numbers 2-4) 33
(TINs) 12 Farmworkers 3 Annualized - Foreign Earned
Tips 9 Form W-2G 11 Income (Worksheet 2-9) 39
Total income 21 Form W-4 3

Page 44 Publication 505 (2023)