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Income Tax Extension

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Income Tax Extension

Income tax extension Other Methods of Depreciation Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: How To Figure the DeductionBasis Useful Life Salvage Value Methods To UseStraight Line Method Declining Balance Method Income Forecast Method How To Change Methods DispositionsSale or exchange. Income tax extension Property not disposed of or abandoned. Income tax extension Special rule for normal retirements from item accounts. Income tax extension Abandoned property. Income tax extension Single item accounts. Income tax extension Multiple property account. Income tax extension Topics - This chapter discusses: How to figure the deduction Methods to use How to change methods Dispositions Useful Items - You may want to see: Publication 544 Sales and Other Dispositions of Assets 551 Basis of Assets 583 Starting a Business and Keeping Records 946 How To Depreciate Property Form (and Instructions) 3115 Application for Change in Accounting Method 4562 Depreciation and Amortization Schedule C (Form 1040) Profit or Loss From Business If your property is being depreciated under ACRS, you must continue to use rules for depreciation that applied when you placed the property in service. Income tax extension If your property qualified for MACRS, you must depreciate it under MACRS. Income tax extension See Publication 946. Income tax extension However, you cannot use MACRS for certain property because of special rules that exclude it from MACRS. Income tax extension Also, you can elect to exclude certain property from being depreciated under MACRS. Income tax extension Property that you cannot depreciate using MACRS includes: Intangible property, Property you can elect to exclude from MACRS that you properly depreciate under a method that is not based on a term of years, Certain public utility property, Any motion picture film or video tape, Any sound recording, and Certain real and personal property placed in service before 1987. Income tax extension Intangible property. Income tax extension   You cannot depreciate intangible property under ACRS or MACRS. Income tax extension You depreciate intangible property using any other reasonable method, usually, the straight line method. Income tax extension Note. Income tax extension The cost of certain intangible property that you acquire after August 10, 1993, must be amortized over a 15-year period. Income tax extension For more information, see chapter 12 of Publication 535. Income tax extension Public utility property. Income tax extension   The law excludes from MACRS any public utility property for which the taxpayer does not use a normalization method of accounting. Income tax extension This type of property is subject to depreciation under a special rule. Income tax extension Videocassettes. Income tax extension   If you are in the videocassette rental business, you can depreciate those videocassettes purchased for rental. Income tax extension You can depreciate the cost less salvage value of those videocassettes that have a useful life over one year using either: The straight line method, or The income forecast method. Income tax extension The straight line method, salvage value, and useful life are discussed later under Methods To Use. Income tax extension You can deduct in the year of purchase as a business expense the cost of any cassette that has a useful life of one year or less. Income tax extension How To Figure the Deduction Two other reasonable methods can be used to figure your deduction for property not covered under ACRS or MACRS. Income tax extension These methods are straight line and declining balance. Income tax extension To figure depreciation using these methods, you must generally determine three things about the property you intend to depreciate. Income tax extension They are: The basis, The useful life, and The estimated salvage value at the end of its useful life. Income tax extension The amount of the deduction in any year also depends on which method of depreciation you choose. Income tax extension Basis To deduct the proper amount of depreciation each year, first determine your basis in the property you intend to depreciate. Income tax extension The basis used for figuring depreciation is the same as the basis that would be used for figuring the gain on a sale. Income tax extension Your original basis is usually the purchase price. Income tax extension However, if you acquire property in some other way, such as inheriting it, getting it as a gift, or building it yourself, you have to figure your original basis in a different way. Income tax extension Adjusted basis. Income tax extension   Events will often change the basis of property. Income tax extension When this occurs, the changed basis is called the adjusted basis. Income tax extension Some events, such as improvements you make, increase basis. Income tax extension Events such as deducting casualty losses and depreciation decrease basis. Income tax extension If basis is adjusted, the depreciation deduction may also have to be changed, depending on the reason for the adjustment and the method of depreciation you are using. Income tax extension   Publication 551 explains how to figure basis for property acquired in different ways. Income tax extension It also discusses what items increase and decrease basis, how to figure adjusted basis, and how to allocate cost if you buy several pieces of property at one time. Income tax extension Useful Life The useful life of a piece of property is an estimate of how long you can expect to use it in your trade or business, or to produce income. Income tax extension It is the length of time over which you will make yearly depreciation deductions of your basis in the property. Income tax extension It is how long it will continue to be useful to you, not how long the property will last. Income tax extension Many things affect the useful life of property, such as: Frequency of use, Age when acquired, Your repair policy, and Environmental conditions. Income tax extension The useful life can also be affected by technological improvements, progress in the arts, reasonably foreseeable economic changes, shifting of business centers, prohibitory laws, and other causes. Income tax extension Consider all these factors before you arrive at a useful life for your property. Income tax extension The useful life of the same type of property varies from user to user. Income tax extension When you determine the useful life of your property, keep in mind your own experience with similar property. Income tax extension You can use the general experience of the industry you are in until you are able to determine a useful life of your property from your own experience. Income tax extension Change in useful life. Income tax extension   You base your estimate of useful life on certain facts. Income tax extension If these facts change significantly, you can adjust your estimate of the remaining useful life. Income tax extension However, you redetermine the estimated useful life only when the change is substantial and there is a clear reason for making the change. Income tax extension Salvage Value It is important for you to accurately determine the correct salvage value of the property you want to depreciate. Income tax extension You generally cannot depreciate property below a reasonable salvage value. Income tax extension Determining salvage value. Income tax extension   Salvage value is the estimated value of property at the end of its useful life. Income tax extension It is what you expect to get for the property if you sell it after you can no longer use it productively. Income tax extension You must estimate the salvage value of a piece of property when you first acquire it. Income tax extension   Salvage value is affected both by how you use the property and how long you use it. Income tax extension If it is your policy to dispose of property that is still in good operating condition, the salvage value can be relatively large. Income tax extension However, if your policy is to use property until it is no longer usable, its salvage value can be its junk value. Income tax extension Changing salvage value. Income tax extension   Once you determine the salvage value for property, you should not change it merely because prices have changed. Income tax extension However, if you redetermine the useful life of property, as discussed earlier under Change in useful life, you can also redetermine the salvage value. Income tax extension When you redetermine the salvage value, take into account the facts that exist at the time. Income tax extension Net salvage. Income tax extension   Net salvage is the salvage value of property minus what it costs to remove it when you dispose of it. Income tax extension You can choose either salvage value or net salvage when you figure depreciation. Income tax extension You must consistently use the one you choose and the treatment of the costs of removal must be consistent with the practice adopted. Income tax extension However, if the cost to remove the property is more than the estimated salvage value, then net salvage is zero. Income tax extension Your salvage value can never be less than zero. Income tax extension Ten percent rule. Income tax extension   If you acquire personal property that has a useful life of 3 years or more, you can use an amount for salvage value that is less than your actual estimate. Income tax extension You can subtract from your estimate of salvage value an amount equal to 10% of your basis in the property. Income tax extension If salvage value is less than 10% of basis, you can ignore salvage value when you figure depreciation. Income tax extension Methods To Use Two methods of depreciation are the straight line and declining balance methods. Income tax extension If ACRS or MACRS does not apply, you can use one of these methods. Income tax extension The straight line and declining balance methods discussed in this section are not figured in the same way as straight line or declining balance methods under MACRS. Income tax extension Straight Line Method Before 1981, you could use any reasonable method for every kind of depreciable property. Income tax extension One of these methods was the straight line method. Income tax extension This method was also used for intangible property. Income tax extension It lets you deduct the same amount of depreciation each year. Income tax extension To figure your deduction, determine the adjusted basis of your property, its salvage value, and its estimated useful life. Income tax extension Subtract the salvage value, if any, from the adjusted basis. Income tax extension The balance is the total amount of depreciation you can take over the useful life of the property. Income tax extension Divide the balance by the number of years remaining in the useful life. Income tax extension This gives you the amount of your yearly depreciation deduction. Income tax extension Unless there is a big change in adjusted basis, or useful life, this amount will stay the same throughout the time you depreciate the property. Income tax extension If, in the first year, you use the property for less than a full year, you must prorate your depreciation deduction for the number of months in use. Income tax extension Example. Income tax extension In April 1994, Frank bought a franchise for $5,600. Income tax extension It expires in 10 years. Income tax extension This property is intangible property that cannot be depreciated under MACRS. Income tax extension Frank depreciates the franchise under the straight line method, using a 10-year useful life and no salvage value. Income tax extension He takes the $5,600 basis and divides that amount by 10 years ($5,600 ÷ 10 = $560, a full year's use). Income tax extension He must prorate the $560 for his 9 months of use in 1994. Income tax extension This gives him a deduction of $420 ($560 ÷ 9/12). Income tax extension In 1995, Frank can deduct $560 for the full year. Income tax extension Declining Balance Method The declining balance method allows you to recover a larger amount of the cost of the property in the early years of your use of the property. Income tax extension The rate cannot be more than twice the straight line rate. Income tax extension Rate of depreciation. Income tax extension   Under this method, you must determine your declining balance rate of depreciation. Income tax extension The initial step is to: Divide the number 1 by the useful life of your property to get a straight line rate. Income tax extension (For example, if property has a useful life of 5 years, its normal straight line rate of depreciation is ⅕, or 20%. Income tax extension ) Multiply this straight line rate by a number that is more than 1 but not more than 2 to determine the declining balance rate. Income tax extension Unless there is a change in the useful life during the time you depreciate the property, the rate of depreciation generally will not change. Income tax extension Depreciation deductions. Income tax extension   After you determine the rate of depreciation, multiply the adjusted basis of the property by it. Income tax extension This gives you the amount of your deduction. Income tax extension For example, if your adjusted basis at the beginning of the first year is $10,000, and your declining balance rate is 20%, your depreciation deduction for the first year is $2,000 ($10,000 ÷ 20%). Income tax extension To figure your depreciation deduction in the second year, you must first adjust the basis for the amount of depreciation you deducted in the first year. Income tax extension Subtract the previous year's depreciation from your basis ($10,000 - $2,000 = $8,000). Income tax extension Multiply this amount by the rate of depreciation ($8,000 ÷ 20% = $1,600). Income tax extension Your depreciation deduction for the second year is $1,600. Income tax extension   As you can see from this example, your adjusted basis in the property gets smaller each year. Income tax extension Also, under this method, deductions are larger in the earlier years and smaller in the later years. Income tax extension You can make a change to the straight line method without consent. Income tax extension Salvage value. Income tax extension   Do not subtract salvage value when you figure your yearly depreciation deductions under the declining balance method. Income tax extension However, you cannot depreciate the property below its reasonable salvage value. Income tax extension Determine salvage value using the rules discussed earlier, including the special 10% rule. Income tax extension Example. Income tax extension If your adjusted basis has been decreased to $1,000 and the rate of depreciation is 20%, your depreciation deduction should be $200. Income tax extension But if your estimate of salvage value was $900, you can only deduct $100. Income tax extension This is because $100 is the amount that would lower your adjusted basis to equal salvage value. Income tax extension Income Forecast Method The income forecast method requires income projections for each videocassette or group of videocassettes. Income tax extension You can group the videocassettes by title for making this projection. Income tax extension You determine the depreciation by applying a fraction to the cost less salvage value of the cassette. Income tax extension The numerator is the income from the videocassette for the tax year and the denominator is the total projected income for the cassette. Income tax extension For more information on the income forecast method, see Revenue Ruling 60-358 in Cumulative Bulletin 1960, Volume 2, on page 68. Income tax extension How To Change Methods In some cases, you may change your method of depreciation for property depreciated under a reasonable method. Income tax extension If you change your method of depreciation, it is generally a change in your method of accounting. Income tax extension You must get IRS consent before making the change. Income tax extension However, you do not need permission for certain changes in your method of depreciation. Income tax extension The rules discussed in this section do not apply to property depreciated under ACRS or MACRS. Income tax extension For information on ACRS elections,see Revocation of election, in chapter 1 under Alternate ACRS Method. Income tax extension Change to the straight line method. Income tax extension   You can change from the declining balance method to the straight line method at any time during the useful life of your property without IRS consent. Income tax extension However, if you have a written agreement with the IRS that prohibits a change, you must first get IRS permission. Income tax extension When the change is made, figure depreciation based on your adjusted basis in the property at that time. Income tax extension Your adjusted basis takes into account all previous depreciation deductions. Income tax extension Use the estimated remaining useful life of your property at the time of change and its estimated salvage value. Income tax extension   You can change from the declining balance method to straight line only on the original tax return for the year you first use the straight line method. Income tax extension You cannot make the change on an amended return filed after the due date of the original return (including extensions). Income tax extension   When you make the change, attach a statement to your tax return showing: When you acquired the property, Its original cost or other original basis, The total amount claimed for depreciation and other allowances since you acquired it, Its salvage value and remaining useful life, and A description of the property and its use. Income tax extension   After you change to straight line, you cannot change back to the declining balance method or to any other method for a period of 10 years without written permission from the IRS. Income tax extension Changes that require permission. Income tax extension   For most other changes in method of depreciation, you must get permission from the IRS. Income tax extension To request a change in method of depreciation, file Form 3115. Income tax extension File the application within the first 180 days of the tax year the change is to become effective. Income tax extension In most cases, there is a user fee that must accompany Form 3115. Income tax extension See the instructions for Form 3115 to determine if a fee is required. Income tax extension Changes granted automatically. Income tax extension   The IRS automatically approves certain changes of a method of depreciation. Income tax extension But, you must file Form 3115 for these automatic changes. Income tax extension   However, IRS can deny permission if Form 3115 is not filed on time. Income tax extension For more information on automatic changes, see Revenue Procedure 74-11, 1974-1 C. Income tax extension B. Income tax extension 420. Income tax extension Changes for which approval is not automatic. Income tax extension   The automatic change procedures do not apply to: Property or an account where you made a change in depreciation within the last 10 tax years (unless the change was made under the Class Life System), Class Life Asset Depreciation Range System, and Public utility property. Income tax extension   You must request and receive permission for these changes. Income tax extension To make the request, file Form 3115 during the first 180 days of the tax year for which you want the change to be effective. Income tax extension Change from an improper method. Income tax extension   If the IRS disallows the method you are using, you do not need permission to change to a proper method. Income tax extension You can adopt the straight line method, or any other method that would have been permitted if you had used it from the beginning. Income tax extension If you file your tax return using an improper method, but later file an amended return, you can use a proper method on the amended return without getting IRS permission. Income tax extension However, you must file the amended return before the filing date for the next tax year. Income tax extension Dispositions Retirement is the permanent withdrawal of depreciable property from use in your trade or business or for the production of income. Income tax extension You can do this by selling, exchanging, or abandoning the item of property. Income tax extension You can also withdraw it from use without disposing of it. Income tax extension For example, you could place it in a supplies or scrap account. Income tax extension Retirements can be either normal or abnormal depending on all facts and circumstances. Income tax extension The rules discussed next do not apply to MACRS and ACRS property. Income tax extension Normal retirement. Income tax extension   A normal retirement is a permanent withdrawal of depreciable property from use if the following apply: The retirement is made within the useful life you estimated originally, and The property has reached a condition at which you customarily retire or would retire similar property from use. Income tax extension A retirement is generally considered normal unless you can show that you retired the property because of a reason you did not consider when you originally estimated the useful life of the property. Income tax extension Abnormal retirement. Income tax extension   A retirement can be abnormal if you withdraw the property early or under other circumstances. Income tax extension For example, if the property is damaged by a fire or suddenly becomes obsolete and is now useless. Income tax extension Gain or loss on retirement. Income tax extension   There are special rules for figuring the gain or loss on retirement of property. Income tax extension The gain or loss will depend on several factors. Income tax extension These include the type of withdrawal, if the withdrawal was from a single property or multiple property account, and if the retirement was normal or abnormal. Income tax extension A single property account contains only one item of property. Income tax extension A multiple property account is one in which several items have been combined with a single rate of depreciation assigned to the entire account. Income tax extension Sale or exchange. Income tax extension   If property is retired by sale or exchange, you figure gain or loss by the usual rules that apply to sales or other dispositions of property. Income tax extension See Publication 544. Income tax extension Property not disposed of or abandoned. Income tax extension   If property is retired permanently, but not disposed of or physically abandoned, you do not recognize gain. Income tax extension You are allowed a loss in such a case, but only if the retirement is: An abnormal retirement, A normal retirement from a single property account in which you determined the life of each item of property separately, or A normal retirement from a multiple property account in which the depreciation rate is based on the maximum expected life of the longest lived item of property and the loss occurs before the expiration of the full useful life. Income tax extension However, you are not allowed a loss if the depreciation rate is based on the average useful life of the items of property in the account. Income tax extension   To figure your loss, subtract the estimated salvage or fair market value of the property at the date of retirement, whichever is more, from its adjusted basis. Income tax extension Special rule for normal retirements from item accounts. Income tax extension   You can generally deduct losses upon retirement of a few depreciable items of property with similar useful lives, if: You account for each one in a separate account, and You use the average useful life to figure depreciation. Income tax extension However, you cannot deduct losses if you use the average useful life to figure depreciation and they have a wide range of useful lives. Income tax extension   If you have a large number of depreciable property items and use average useful lives to figure depreciation, you cannot deduct the losses upon normal retirements from these accounts. Income tax extension Abandoned property. Income tax extension   If you physically abandon property, you can deduct as a loss the adjusted basis of the property at the time of its abandonment. Income tax extension However, your intent must be to discard the property so that you will not use it again or retrieve it for sale, exchange, or other disposition. Income tax extension Basis of property retired. Income tax extension   The basis for figuring gain or loss on the retirement of property is its adjusted basis at the time of retirement, as determined in the following discussions. Income tax extension Single item accounts. Income tax extension   If an item of property is accounted for in a single item account, the adjusted basis is the basis you would use to figure gain or loss for a sale or exchange of the property. Income tax extension This is generally the cost or other basis of the item of property less depreciation. Income tax extension See Publication 551. Income tax extension Multiple property account. Income tax extension   For a normal retirement from a multiple property account, if you figured depreciation using the average expected useful life, the adjusted basis is the salvage value estimated for the item of property when it was originally acquired. Income tax extension If you figured depreciation using the maximum expected useful life of the longest lived item of property in the account, you must use the depreciation method used for the multiple property account and a rate based on the maximum expected useful life of the item of property retired. Income tax extension   You make the adjustment for depreciation for an abnormal retirement from a multiple property account at the rate that would be proper if the item of property was depreciated in a single property account. Income tax extension The method of depreciation used for the multiple property account is used. Income tax extension You base the rate on either the average expected useful life or the maximum expected useful life of the retired item of property, depending on the method used to determine the depreciation rate for the multiple property account. Income tax extension Prev  Up  Next   Home   More Online Publications
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Consumer Protection Offices

City, county, regional, and state consumer offices offer a variety of important services. They might mediate complaints, conduct investigations, prosecute offenders of consumer laws, license and regulate professional service providers, provide educational materials and advocate for consumer rights. To save time, call before sending a written complaint. Ask if the office handles the type of complaint you have and if complaint forms are provided.

State Consumer Protection Offices

Office of the Attorney General

Website: Office of the Attorney General

Address: Office of the Attorney General
Bureau of Consumer Protection
Strawberry Square, 15th Floor
Harrisburg, PA 17120

Phone Number: 717-787-3391

Toll-free: 1-800-441-2555 (PA) 1-888-520-6680 (Home Improvement)

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Regional Consumer Protection Offices

Erie Regional Office - Office of the Attorney General

Website: Erie Regional Office - Office of the Attorney General

Address: Erie Regional Office - Office of the Attorney General
Bureau of Consumer Protection
1001 State St., 10th Floor
Erie, PA 16501

Phone Number: 814-871-4371

Philadelphia Regional Office - Office of the Attorney General

Website: Philadelphia Regional Office - Office of the Attorney General

Address: Philadelphia Regional Office - Office of the Attorney General
Bureau of Consumer Protection
21 S. 12th St., 2nd Floor
Philadelphia, PA 19107

Phone Number: 215-560-2414

Pittsburgh Regional Office - Bureau of Consumer Protection

Website: Pittsburgh Regional Office - Bureau of Consumer Protection

Address: Pittsburgh Regional Office - Bureau of Consumer Protection
Bureau of Consumer Protection
Manor Complex, 6th Floor
564 Forbes Ave.
Pittsburgh, PA 15219

Phone Number: 412-565-5135

Scranton Regional Office of the Attorney General

Website: Scranton Regional Office of the Attorney General

Address: Scranton Regional Office of the Attorney General
Bureau of Consumer Protection
100 Samter Building
101 Penn Ave.
Scranton, PA 18503

Phone Number: 570-963-4913

State College Regional Office of the Attorney General

Website: State College Regional Office of the Attorney General

Address: State College Regional Office of the Attorney General
Bureau of Consumer Protection
444 E. College Ave., Suite 440
State College, PA 16801

Phone Number: 814-863-3900

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County Consumer Protection Offices

Bucks County Department of Consumer Protection

Website: Bucks County Department of Consumer Protection

Address: Bucks County Department of Consumer Protection
50 N. Main St.
Doylestown, PA 18901

Phone Number: 215-348-7442

Delaware County Consumer Affairs

Website: Delaware County Consumer Affairs

Address: Delaware County Consumer Affairs
201 W. Front St.
Government Center Building
Media, PA 19063

Phone Number: 610-891-4865

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Banking Authorities

The officials listed in this section regulate and supervise state-chartered banks. Many of them handle or refer problems and complaints about other types of financial institutions as well. Some also answer general questions about banking and consumer credit. If you are dealing with a federally chartered bank, check Federal Agencies.

Department of Banking

Website: Department of Banking

Address: Department of Banking
Consumer Services
17 N. Second St., Suite 1300
Harrisburg, PA 17101-2290

Phone Number: 717-787-1854

Toll-free: 1-800-722-2657

TTY: 1-800-679-5070

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Insurance Regulators

Each state has its own laws and regulations for each type of insurance. The officials listed in this section enforce these laws. Many of these offices can also provide you with information to help you make informed insurance buying decisions.

Insurance Department

Website: Insurance Department

Address: Insurance Department
Consumer Services
1209 Strawberry Square
Harrisburg, PA 17120

Phone Number: 717-787-2317

Toll-free: 1-877-881-6388 (PA)

TTY: 717-783-3898

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Securities Administrators

Each state has its own laws and regulations for securities brokers and securities - including stocks, mutual funds, commodities, real estate, etc. The officials and agencies listed in this section enforce these laws and regulations. Many of these offices can also provide information to help you make informed investment decisions.

Securities Commission

Website: Securities Commission

Address: Securities Commission
17 N. 2nd St., Suite 1300
Harrisburg, PA 17101

Phone Number: 717-787-1854

Toll-free: 1-800-722-2657 (PA)

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Utility Commissions

State Utility Commissions regulate services and rates for gas, electricity and telephones within your state. In some states, the utility commissions regulate other services such as water, transportation, and the moving of household goods. Many utility commissions handle consumer complaints. Sometimes, if a number of complaints are received about the same utility matter, they will conduct investigations.

Pennsylvania Office of Consumer Advocate

Website: Pennsylvania Office of Consumer Advocate

Address: Pennsylvania Office of Consumer Advocate
Office of the Attorney General
555 Walnut St.
5th Floor, Forum Place
Harrisburg, PA 17101-1923

Phone Number: 717-783-5048

Toll-free: 1-800-684-6560 (PA)

Public Utility Commission

Website: Public Utility Commission

Address: Public Utility Commission
Bureau of Consumer Services
PO Box 3265
Harrisburg, PA 17105-3265

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The Income Tax Extension

Income tax extension 2. Income tax extension   Estimated Tax for 2014 Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Who Does Not Have To Pay Estimated Tax Who Must Pay Estimated TaxGeneral Rule Married Taxpayers Special Rules Aliens Estates and Trusts How To Figure Estimated Tax2014 Estimated Tax Worksheet When To Pay Estimated TaxWhen To Start Farmers and Fishermen How To Figure Each PaymentRegular Installment Method Annualized Income Installment Method Estimated Tax Payments Not Required How To Pay Estimated TaxCredit an Overpayment Pay Online Pay by Phone Pay by Check or Money Order Using the Estimated Tax Payment Voucher Introduction Estimated tax is the method used to pay tax on income that is not subject to withholding. Income tax extension This includes income from self-employment, interest, dividends, alimony, rent, gains from the sale of assets, prizes, and awards. Income tax extension You also may have to pay estimated tax if the amount of income tax being withheld from your salary, pension, or other income is not enough. Income tax extension Estimated tax is used to pay both income tax and self-employment tax, as well as other taxes and amounts reported on your tax return. Income tax extension If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. Income tax extension If you do not pay enough by the due date of each payment period (see When To Pay Estimated Tax , later), you may be charged a penalty even if you are due a refund when you file your tax return. Income tax extension For information on when the penalty applies, see chapter 4. Income tax extension It would be helpful for you to have a copy of your 2013 tax return and an estimate of your 2014 income nearby while reading this chapter. Income tax extension Topics - This chapter discusses: Who must pay estimated tax, How to figure estimated tax (including illustrated examples), When to pay estimated tax, How to figure each payment, and How to pay estimated tax. Income tax extension Useful Items - You may want to see: Form (and Instructions) 1040-ES Estimated Tax for Individuals See chapter 5 for information about how to get this publication and form. Income tax extension Worksheets. Income tax extension   You may need to use several of the blank worksheets included in this chapter. Income tax extension See Worksheets for Chapter 2, later, to locate what you need. Income tax extension Who Does Not Have To Pay Estimated Tax If you receive salaries and wages, you may be able to avoid paying estimated tax by asking your employer to take more tax out of your earnings. Income tax extension To do this, file a new Form W-4 with your employer. Income tax extension See chapter 1. Income tax extension Estimated tax not required. Income tax extension   You do not have to pay estimated tax for 2014 if you meet all three of the following conditions. Income tax extension You had no tax liability for 2013. Income tax extension You were a U. Income tax extension S. Income tax extension citizen or resident alien for the whole year. Income tax extension Your 2013 tax year covered a 12-month period. Income tax extension   You had no tax liability for 2013 if your total tax (defined later under Total tax for 2013—line 14b ) was zero or you did not have to file an income tax return. Income tax extension Please click here for the text description of the image. Income tax extension Figure 2-A: Do You Have To Pay Estimated Tax? Who Must Pay Estimated Tax If you owed additional tax for 2013, you may have to pay estimated tax for 2014. Income tax extension You can use the following general rule as a guide during the year to see if you will have enough withholding, or should increase your withholding or make estimated tax payments. Income tax extension General Rule In most cases, you must pay estimated tax for 2014 if both of the following apply. Income tax extension You expect to owe at least $1,000 in tax for 2014, after subtracting your withholding and refundable credits. Income tax extension You expect your withholding and refundable credits to be less than the smaller of: 90% of the tax to be shown on your 2014 tax return, or 100% of the tax shown on your 2013 tax return. Income tax extension Your 2013 tax return must cover all 12 months. Income tax extension Note. Income tax extension The percentages in (2a) or (2b) above may be different if you are a farmer, fisherman, or higher income taxpayer. Income tax extension See Special Rules , later. Income tax extension If the result from using the general rule above suggests that you will not have enough withholding, complete the 2014 Estimated Tax Worksheet for a more accurate calculation. Income tax extension Figure 2-A takes you through the general rule. Income tax extension You may find this helpful in determining if you must pay estimated tax. Income tax extension If all your income will be subject to income tax withholding, you probably do not need to pay estimated tax. Income tax extension Example 1. Income tax extension Jane Smart uses Figure 2-A and the following information to figure whether she should pay estimated tax for 2014. Income tax extension She files as head of household claiming her dependent son, takes the standard deduction, and expects no refundable credits for 2014. Income tax extension Expected adjusted gross income (AGI) for 2014 $82,800 AGI for 2013 $73,700 Total tax on 2013 return (Form 1040,  line 61) $  8,746 Total 2014 estimated tax (line 13c of the 2014 Estimated Tax Worksheet) $11,015 Tax expected to be withheld in 2014 $10,000 Jane's answer to Figure 2-A, box 1, is YES; she expects to owe at least $1,000 for 2014 after subtracting her withholding from her expected total tax ($11,015 − $10,000 = $1,015). Income tax extension Her answer to box 2a is YES; she expects her income tax withholding ($10,000) to be at least 90% of the tax to be shown on her 2014 return ($11,015 × 90% = $9,913. Income tax extension 50). Income tax extension Jane does not need to pay estimated tax. Income tax extension Example 2. Income tax extension The facts are the same as in Example 1, except that Jane expects only $8,700 tax to be withheld in 2014. Income tax extension Because that is less than $9,913. Income tax extension 50, her answer to box 2a is NO. Income tax extension Jane's answer to box 2b is also NO; she does not expect her income tax withholding ($8,700) to be at least 100% of the total tax shown on her 2013 return ($8,746). Income tax extension Jane must increase her withholding or pay estimated tax for 2014. Income tax extension Example 3. Income tax extension The facts are the same as in Example 2, except that the total tax shown on Jane's 2013 return was $8,600. Income tax extension Because she expects to have more than $8,600 withheld in 2014 ($8,700), her answer to box 2b is YES. Income tax extension Jane does not need to pay estimated tax for 2014. Income tax extension Married Taxpayers If you qualify to make joint estimated tax payments, apply the rules discussed here to your joint estimated income. Income tax extension You and your spouse can make joint estimated tax payments even if you are not living together. Income tax extension However, you and your spouse cannot make joint estimated tax payments if: You are legally separated under a decree of divorce or separate maintenance, You and your spouse have different tax years, Either spouse is a nonresident alien (unless that spouse elected to be treated as a resident alien for tax purposes). Income tax extension See Choosing Resident Alien Status in Publication 519, or Individuals of the same sex and opposite sex who are in registered domestic partnerships, civil unions, or other similar formal relationships that are not marriages under state law cannot make joint estimated tax payments. Income tax extension These individuals can take credit only for the estimated tax payments that he or she made. Income tax extension If you and your spouse cannot make joint estimated tax payments, apply these rules to your separate estimated income. Income tax extension Making joint or separate estimated tax payments will not affect your choice of filing a joint tax return or separate returns for 2014. Income tax extension 2013 separate returns and 2014 joint return. Income tax extension   If you plan to file a joint return with your spouse for 2014, but you filed separate returns for 2013, your 2013 tax is the total of the tax shown on your separate returns. Income tax extension You filed a separate return if you filed as single, head of household, or married filing separately. Income tax extension 2013 joint return and 2014 separate returns. Income tax extension   If you plan to file a separate return for 2014, but you filed a joint return for 2013, your 2013 tax is your share of the tax on the joint return. Income tax extension You file a separate return if you file as single, head of household, or married filing separately. Income tax extension   To figure your share of the tax on a joint return, first figure the tax both you and your spouse would have paid had you filed separate returns for 2013 using the same filing status for 2014. Income tax extension Then multiply the tax on the joint return by the following fraction. Income tax extension      The tax you would have paid had you filed a separate return   The total tax you and your spouse would have paid had you filed separate returns Example. Income tax extension Joe and Heather filed a joint return for 2013 showing taxable income of $48,500 and a tax of $6,386. Income tax extension Of the $48,500 taxable income, $40,100 was Joe's and the rest was Heather's. Income tax extension For 2014, they plan to file married filing separately. Income tax extension Joe figures his share of the tax on the 2013 joint return as follows: Tax on $40,100 based on separate return $5,960 Tax on $8,400 based on separate return 843 Total $6,803 Joe's percentage of total ($5,960 ÷ $6,803) 87. Income tax extension 6% Joe's share of tax on joint return  ($6,386 × 87. Income tax extension 6%) $5,594 Special Rules There are special rules for farmers, fishermen, and certain higher income taxpayers. Income tax extension Farmers and Fishermen If at least two-thirds of your gross income for 2013 or 2014 is from farming or fishing, substitute 662/3% for 90% in (2a) under General Rule , earlier. Income tax extension Gross income. Income tax extension   Your gross income is all income you receive in the form of money, goods, property, and services that is not exempt from tax. Income tax extension To determine whether two-thirds of your gross income for 2013 was from farming or fishing, use as your gross income the total of the income (not loss) amounts. Income tax extension Joint returns. Income tax extension   On a joint return, you must add your spouse's gross income to your gross income to determine if at least two-thirds of your total gross income is from farming or fishing. Income tax extension Gross income from farming. Income tax extension   This is income from cultivating the soil or raising agricultural commodities. Income tax extension It includes the following amounts. Income tax extension Income from operating a stock, dairy, poultry, bee, fruit, or truck farm. Income tax extension Income from a plantation, ranch, nursery, range, orchard, or oyster bed. Income tax extension Crop shares for the use of your land. Income tax extension Gains from sales of draft, breeding, dairy, or sporting livestock. Income tax extension   For 2013, gross income from farming is the total of the following amounts. Income tax extension Schedule F (Form 1040), Profit or Loss From Farming, line 9. Income tax extension Form 4835, Farm Rental Income and Expenses, line 7. Income tax extension Your share of the gross farming income from a partnership, S corporation, estate or trust, from: Schedule K-1 (Form 1065), Schedule K-1 (Form 1120S), or Schedule K-1 (Form 1041). Income tax extension Your gains from sales of draft, breeding, dairy, or sporting livestock shown on Form 4797, Sales of Business Property. Income tax extension   Wages you receive as a farm employee and wages you receive from a farm corporation are not gross income from farming. Income tax extension Gross income from fishing. Income tax extension   This is income from catching, taking, harvesting, cultivating, or farming any kind of fish, shellfish (for example, clams and mussels), crustaceans (for example, lobsters, crabs, and shrimp), sponges, seaweeds, or other aquatic forms of animal and vegetable life. Income tax extension   Gross income from fishing includes the following amounts. Income tax extension Schedule C (Form 1040), Profit or Loss From Business. Income tax extension Income for services as an officer or crew member of a vessel while the vessel is engaged in fishing. Income tax extension Your share of the gross fishing income from a partnership, S corporation, estate or trust, from: Schedule K-1 (Form 1065), Schedule K-1 (Form 1120S), or Schedule K-1 (Form 1041). Income tax extension Certain taxable interest and punitive damage awards received in connection with the Exxon Valdez litigation. Income tax extension Income for services normally performed in connection with fishing. Income tax extension Services normally performed in connection with fishing include: Shore service as an officer or crew member of a vessel engaged in fishing, and Services that are necessary for the immediate preservation of the catch, such as cleaning, icing, and packing the catch. Income tax extension Higher Income Taxpayers If your AGI for 2013 was more than $150,000 ($75,000 if your filing status for 2014 is married filing a separate return), substitute 110% for 100% in (2b) under General Rule , earlier. Income tax extension For 2013, AGI is the amount shown on Form 1040, line 37; Form 1040A, line 21; and Form 1040EZ, line 4. Income tax extension Note. Income tax extension This rule does not apply to farmers and fishermen. Income tax extension Aliens Resident and nonresident aliens also may have to pay estimated tax. Income tax extension Resident aliens should follow the rules in this publication, unless noted otherwise. Income tax extension Nonresident aliens should get Form 1040-ES (NR), U. Income tax extension S. Income tax extension Estimated Tax for Nonresident Alien Individuals. Income tax extension You are an alien if you are not a citizen or national of the United States. Income tax extension You are a resident alien if you either have a green card or meet the substantial presence test. Income tax extension For more information about withholding, the substantial presence test, and Form 1040-ES (NR), see Publication 519. Income tax extension Estates and Trusts Estates and trusts also must pay estimated tax. Income tax extension However, estates (and certain grantor trusts that receive the residue of the decedent's estate under the decedent's will) are exempt from paying estimated tax for the first 2 years after the decedent's death. Income tax extension Estates and trusts must use Form 1041-ES, Estimated Income Tax for Estates and Trusts, to figure and pay estimated tax. Income tax extension How To Figure Estimated Tax To figure your estimated tax, you must figure your expected AGI, taxable income, taxes, deductions, and credits for the year. Income tax extension When figuring your 2014 estimated tax, it may be helpful to use your income, deductions, and credits for 2013 as a starting point. Income tax extension Use your 2013 federal tax return as a guide. Income tax extension You can use Form 1040-ES to figure your estimated tax. Income tax extension Nonresident aliens use Form 1040-ES (NR) to figure estimated tax. Income tax extension You must make adjustments both for changes in your own situation and for recent changes in the tax law. Income tax extension Some of these changes are discussed under What's New for 2014 , earlier. Income tax extension For information about these and other changes in the law, visit the IRS website at IRS. Income tax extension gov. Income tax extension The instructions for Form 1040-ES include a worksheet to help you figure your estimated tax. Income tax extension Keep the worksheet for your records. Income tax extension 2014 Estimated Tax Worksheet Use Worksheet 2-1 to help guide you through the information about completing the 2014 Estimated Tax Worksheet. Income tax extension You can also find a copy of the worksheet in the Instructions for Form 1040-ES. Income tax extension Expected AGI—Line 1 Your expected AGI for 2014 (line 1) is your expected total income minus your expected adjustments to income. Income tax extension Total income. Income tax extension   Include in your total income all the income you expect to receive during the year, even income that is subject to withholding. Income tax extension However, do not include income that is tax exempt. Income tax extension   Total income includes all income and loss for 2014 that, if you had received it in 2013, would have been included on your 2013 tax return in the total on line 22 of Form 1040, line 15 of Form 1040A, or line 4 of Form 1040EZ. Income tax extension Social security and railroad retirement benefits. Income tax extension If you expect to receive social security or tier 1 railroad retirement benefits during 2014, use Worksheet 2-2 to figure the amount of expected taxable benefits you should include on line 1. Income tax extension Adjustments to income. Income tax extension   Be sure to subtract from your expected total income all of the adjustments you expect to take on your 2014 tax return. Income tax extension Self-employed. Income tax extension If you expect to have income from self-employment, use Worksheet 2-3 to figure your expected self-employment tax and your allowable deduction for self-employment tax. Income tax extension Include the amount from Worksheet 2-3 in your expected adjustments to income. Income tax extension If you file a joint return and both you and your spouse have net earnings from self-employment, each of you must complete a separate worksheet. Income tax extension Expected Taxable Income— Lines 2–5 Reduce your expected AGI for 2014 (line 1) by either your expected itemized deductions or your standard deduction and by your exemptions (lines 2 through 5). Income tax extension Itemized deductions—line 2. Income tax extension   If you expect to claim itemized deductions on your 2014 tax return, enter the estimated amount on line 2. Income tax extension   Itemized deductions are the deductions that can be claimed on Schedule A (Form 1040). Income tax extension    For 2014, your total itemized deductions may be reduced if your AGI is more than the amount shown next for your filing status. Income tax extension Single $254,200 Married filing jointly or qualifying widow(er) $305,050 Married filing separately $152,525 Head of household $279,650   If you expect your AGI to be more than this amount, use Worksheet 2-5 to figure the amount to enter on line 2. Income tax extension Standard deduction—line 2. Income tax extension   If you expect to claim the standard deduction on your 2014 tax return, enter the amount on line 2. Income tax extension Use Worksheet 2-4 to figure your standard deduction. Income tax extension No standard deduction. Income tax extension   The standard deduction for some individuals is zero. Income tax extension Your standard deduction will be zero if you: File a separate return and your spouse itemizes deductions, Are a dual-status alien, or File a return for a period of less than 12 months because you change your accounting period. Income tax extension Exemptions—line 4. Income tax extension   After you have subtracted either your expected itemized deductions or your standard deduction from your expected AGI, reduce the amount remaining by $3,950 for each exemption you expect to take on your 2014 tax return. Income tax extension If another person (such as your parent) can claim an exemption for you on his or her tax return, you cannot claim your own personal exemption. Income tax extension This is true even if the other person will not claim your exemption or the exemption will be reduced or eliminated under the phaseout rule. Income tax extension    For 2014, your deduction for personal exemption is reduced if your AGI is more than the amount shown next for your filing status. Income tax extension Single $254,200 Married filing jointly or qualifying widow(er) $305,050 Married filing separately $152,525 Head of household $279,650   If you expect your AGI to be more than this amount, use Worksheet 2-6 to figure the amount to enter on line 4. Income tax extension Expected Taxes and Credits— Lines 6–13c After you have figured your expected taxable income (line 5), follow the steps next to figure your expected taxes, credits, and total tax for 2014. Income tax extension Most people will have entries for only a few of these steps. Income tax extension However, you should check every step to be sure you do not overlook anything. Income tax extension Step 1. Income tax extension   Figure your expected income tax (line 6). Income tax extension Generally, you will use the 2014 Tax Rate Schedules, later, to figure your expected income tax. Income tax extension   However, see below for situations where you must use a different method to compute your estimated tax. Income tax extension Tax on child's investment income. Income tax extension   You must use a special method to figure tax on the income of the following children who have more than $2,000 of investment income. Income tax extension Children under age 18 at the end of 2014. Income tax extension The following children if their earned income is not more than half their support. Income tax extension Children age 18 at the end of 2014. Income tax extension Children who are full-time students over age 18 and under age 24 at the end of 2014. Income tax extension See Publication 929, Tax Rules for Children and Dependents. Income tax extension Although the ages and dollar amounts in the publication may be different in the 2014 revision, this reference will give you basic information for figuring the tax. Income tax extension Tax on net capital gain. Income tax extension   The regular income tax rates for individuals do not apply to a net capital gain. Income tax extension Instead, your net capital gain is taxed at a lower maximum rate. Income tax extension   The term “net capital gain” means the amount by which your net long-term capital gain for the year is more than your net short-term capital loss. Income tax extension Tax on capital gain and qualified dividends. Income tax extension If the amount on line 1 includes a net capital gain or qualified dividends, use Worksheet 2-7 to figure your tax. Income tax extension Note. Income tax extension For 2014, your capital gains and dividends rate will depend on your income. Income tax extension Tax if excluding foreign earned income or excluding or deducting foreign housing. Income tax extension If you expect to claim the foreign earned income exclusion or the housing exclusion or deduction on Form 2555 or Form 2555-EZ, use Worksheet 2-8 to figure your estimated tax. Income tax extension Step 2. Income tax extension   Total your expected taxes (line 8). Income tax extension Include on line 8 the sum of the following. Income tax extension Your tax on line 6. Income tax extension Your expected alternative minimum tax (AMT) from Form 6251, or included on Form 1040A. Income tax extension Your expected additional taxes from Form 8814, Parents' Election To Report Child's Interest and Dividends, and Form 4972, Tax on Lump-Sum Distributions. Income tax extension Any recapture of education credits. Income tax extension Step 3. Income tax extension   Subtract your expected credits (line 9). Income tax extension If you are using your 2013 return as a guide and filed Form 1040, your total credits for 2013 were shown on line 54. Income tax extension If you filed Form 1040A, your total credits for 2013 were on line 34. Income tax extension   If your credits on line 9 are more than your taxes on line 8, enter “-0-” on line 10 and go to Step 4. Income tax extension Step 4. Income tax extension   Add your expected self-employment tax (line 11). Income tax extension You already should have figured your self-employment tax (see Self-employed under Expected AGI—Line 1, earlier). Income tax extension Step 5. Income tax extension   Add your expected other taxes (line 12). Income tax extension   Other taxes include the following. Income tax extension Additional tax on early distributions from: An IRA or other qualified retirement plan, A tax-sheltered annuity, or A modified endowment contract entered into after June 20, 1988. Income tax extension Household employment taxes if: You will have federal income tax withheld from wages, pensions, annuities, gambling winnings, or other income, or You would be required to make estimated tax payments even if you did not include household employment taxes when figuring your estimated tax. Income tax extension Amounts written on Form 1040 on the line for “other taxes” (line 60 on the 2013 Form 1040). Income tax extension But, do not include recapture of a federal mortgage subsidy; tax on excess golden parachute payments; look-back interest due under section 167(g) or 460(b) of the Internal Revenue Code; excise tax on insider stock compensation from an expatriated corporation; uncollected social security and Medicare tax or RRTA tax on tips or group-term life insurance; or additional tax on advance payments of health coverage tax credit when not eligible. Income tax extension Repayment of the first-time homebuyer credit. Income tax extension See Form 5405. Income tax extension Additional Medicare Tax. Income tax extension A 0. Income tax extension 9% Additional Medicare Tax applies to your combined Medicare wages and self-employment income and/or your RRTA compensation that exceeds the amount listed in the following chart, based on your filing status. Income tax extension Filing Status Threshold Amount Married filing jointly $250,000 Married filing separately $125,000 Single $200,000 Head of household $200,000 Qualifying Widow(er) $200,000 Medicare wages and self-employment income are combined to determine if your income exceeds the threshold. Income tax extension A self-employment loss should not be considered for purposes of this tax. Income tax extension RRTA compensation should be separately compared to the threshold. Income tax extension Your employer is responsible for withholding the 0. Income tax extension 9% Additional Medicare Tax on Medicare wages or RRTA compensation it pays to you in excess of $200,000 in 2014. Income tax extension You should consider this withholding, if applicable, in determining whether you need to make an estimated payment. Income tax extension For more information on Additional Medicare Tax, go to IRS. Income tax extension gov and enter “Additional Medicare Tax” in the search box. Income tax extension Net Investment Income Tax (NIIT). Income tax extension The NIIT is 3. Income tax extension 8% of the lesser of your net investment income or the excess of your modified adjusted gross income over the amount listed in the following chart, based on your filing status. Income tax extension Filing Status Threshold Amount Married filing jointly $250,000 Married filing separately $125,000 Single $200,000 Head of household $200,000 Qualifying Widow(er) $250,000 For more information on Net Investment Income Tax, go to IRS. Income tax extension gov and enter “Net Investment Income Tax” in the search box. Income tax extension Step 6. Income tax extension   Subtract your refundable credit (line 13b). Income tax extension   To figure your expected fuel tax credit, do not include fuel tax for the first three quarters of the year that you expect to have refunded to you. Income tax extension   The result of steps 1 through 6 is your total estimated tax for 2014 (line 13c). Income tax extension Required Annual Payment— Line 14c On lines 14a through 14c, figure the total amount you must pay for 2014, through withholding and estimated tax payments, to avoid paying a penalty. Income tax extension General rule. Income tax extension   The total amount you must pay is the smaller of: 90% of your total expected tax for 2014, or 100% of the total tax shown on your 2013 return. Income tax extension Your 2013 tax return must cover all 12 months. Income tax extension Special rules. Income tax extension   There are special rules for higher income taxpayers and for farmers and fishermen. Income tax extension Higher income taxpayers. Income tax extension   If your AGI for 2013 was more than $150,000 ($75,000 if your filing status for 2014 is married filing separately), substitute 110% for 100% in (2) above. Income tax extension This rule does not apply to farmers and fishermen. Income tax extension For 2013, AGI is the amount shown on Form 1040, line 37; Form 1040A, line 21; and Form 1040EZ, line 4. Income tax extension Example. Income tax extension   Jeremy Martin's total tax on his 2013 return was $42,581, and his expected tax for 2014 is $71,253. Income tax extension His 2013 AGI was $180,000. Income tax extension Because Jeremy had more than $150,000 of AGI in 2013, he figures his required annual payment as follows. Income tax extension He determines that 90% of his expected tax for 2014 is $64,128 (. Income tax extension 90 × $71,253). Income tax extension Next, he determines that 110% of the tax shown on his 2013 return is $46,839 (1. Income tax extension 10 x $42,581). Income tax extension Finally, he determines that his required annual payment is $46,839, the smaller of the two. Income tax extension Farmers and fishermen. Income tax extension   If at least two-thirds of your gross income for 2013 or 2014 is from farming or fishing, your required annual payment is the smaller of: 662/3% (. Income tax extension 6667) of your total tax for 2014, or 100% of the total tax shown on your 2013 return. Income tax extension (Your 2013 tax return must cover all 12 months. Income tax extension )   For definitions of “gross income from farming” and “gross income from fishing,” see Farmers and Fishermen , under Special Rules discussed earlier. Income tax extension Total tax for 2013—line 14b. Income tax extension   Your 2013 total tax, if you filed Form 1040, is the amount on line 61 reduced by the following. Income tax extension Unreported social security and Medicare tax or RRTA tax from Forms 4137 or 8919 (line 57). Income tax extension The following amounts from Form 5329 included on line 58. Income tax extension Any tax on excess contributions to IRAs, Archer MSAs, Coverdell education savings accounts, and health savings accounts. Income tax extension Any tax on excess accumulations in qualified retirement plans. Income tax extension The following write-ins on line 60. Income tax extension Excise tax on excess golden parachute payments (identified as “EPP”). Income tax extension Excise tax on insider stock compensation from an expatriated corporation (identified as “ISC”). Income tax extension Look-back interest due under section 167(g) (identified as “From Form 8866”). Income tax extension Look-back interest due under section 460(b) (identified as “From Form 8697”). Income tax extension Recapture of federal mortgage subsidy (identified as “FMSR”). Income tax extension Additional tax on advance payments of health coverage tax credit when not eligible (identified as “HCTC”). Income tax extension Uncollected social security and Medicare tax or RRTA tax on tips or group-term life insurance (identified as “UT”). Income tax extension Any refundable credit amounts. Income tax extension   If you filed Form 1040A, your 2013 total tax is the amount on line 35 reduced by any refundable credits. Income tax extension   If you filed Form 1040EZ, your 2013 total tax is the amount on line 10 reduced by the amount on line 8a. Income tax extension Total Estimated Tax Payments Needed—Line 16a Use lines 15 and 16a to figure the total estimated tax you may be required to pay for 2014. Income tax extension Subtract your expected withholding from your required annual payment (line 14c). Income tax extension You usually must pay this difference in four equal installments. Income tax extension See When To Pay Estimated Tax and How To Figure Each Payment . Income tax extension You do not have to pay estimated tax if: Line 14c minus line 15 is zero or less, or Line 13c minus line 15 is less than $1,000. Income tax extension Withholding—line 15. Income tax extension   Your expected withholding for 2014 (line 15) includes the income tax you expect to be withheld from all sources (wages, pensions and annuities, etc. Income tax extension ). Income tax extension It includes excess social security, and tier 1 railroad retirement tax you expect to be withheld from your wages and compensation. Income tax extension For this purpose, you will have excess social security or tier 1 railroad retirement tax withholding for 2014 only if your wages and compensation from two or more employers are more than $117,000. Income tax extension See Excess Social Security or Railroad Retirement Tax Withholding in chapter 3. Income tax extension   It also includes Additional Medicare Tax you expect to be withheld from your wages or compensation. Income tax extension Your employer is responsible for withholding the 0. Income tax extension 9% Additional Medicare Tax on Medicare wages or RRTA compensation it pays to you in excess of $200,000. Income tax extension When To Pay Estimated Tax For estimated tax purposes, the year is divided into four payment periods. Income tax extension Each period has a specific payment due date. Income tax extension If you do not pay enough tax by the due date of each of the payment periods, you may be charged a penalty even if you are due a refund when you file your income tax return. Income tax extension If a payment is mailed, the date of the U. Income tax extension S. Income tax extension postmark is considered the date of payment. Income tax extension The payment periods and due dates for estimated tax payments are shown next. Income tax extension For exceptions to the dates listed, see Saturday, Sunday, holiday rule below. Income tax extension For the period: Due date: Jan. Income tax extension 11 – March 31 April 15 April 1 – May 31 June 16 June 1 – August 31 September 15 Sept. Income tax extension 1 – Dec. Income tax extension 31 January 15  next year2 1If your tax year does not begin on January 1,  see Fiscal year taxpayers . Income tax extension 2See January payment . Income tax extension Saturday, Sunday, holiday rule. Income tax extension   If the due date for an estimated tax payment falls on a Saturday, Sunday, or legal holiday, the payment will be on time if you make it on the next day that is not a Saturday, Sunday, or a holiday. Income tax extension January payment. Income tax extension   If you file your 2014 Form 1040 or Form 1040A by February 2, 2015, and pay the rest of the tax you owe, you do not need to make the payment due on January 15, 2015. Income tax extension Example. Income tax extension Janet Adams does not pay any estimated tax for 2014. Income tax extension She files her 2014 income tax return and pays the balance due shown on her return on January 26, 2015. Income tax extension Janet's estimated tax for the fourth payment period is considered to have been paid on time. Income tax extension However, she may owe a penalty for not making the first three estimated tax payments, if required. Income tax extension Any penalty for not making those payments will be figured up to January 26, 2015. Income tax extension Fiscal year taxpayers. Income tax extension   If your tax year does not start on January 1, your payment due dates are: The 15th day of the 4th month of your fiscal year, The 15th day of the 6th month of your fiscal year, The 15th day of the 9th month of your fiscal year, and The 15th day of the 1st month after the end of your fiscal year. Income tax extension   You do not have to make the last payment listed above if you file your income tax return by the last day of the first month after the end of your fiscal year and pay all the tax you owe with your return. Income tax extension When To Start You do not have to make estimated tax payments until you have income on which you will owe income tax. Income tax extension If you have income subject to estimated tax during the first payment period, you must make your first payment by the due date for the first payment period. Income tax extension You have several options when paying estimated taxes. Income tax extension You can: apply an overpayment from the previous tax year, pay all your estimated tax by the due date of your first payment, or pay it in installments. Income tax extension If you choose to pay in installments, make your first payment by the due date for the first payment period. Income tax extension Make your remaining installment payments by the due dates for the later periods. Income tax extension To avoid any estimated tax penalties, all installments must be paid by their due date and for the required amount. Income tax extension No income subject to estimated tax during first period. Income tax extension   If you do not have income subject to estimated tax until a later payment period, you must make your first payment by the due date for that period. Income tax extension You can pay your entire estimated tax by the due date for that period or you can pay it in installments by the due date for that period and the due dates for the remaining periods. Income tax extension Table 2-1 shows the dates for making installment payments. Income tax extension    Table 2-1. Income tax extension Due Dates for Estimated Tax Installment Payments If you first have income on which you must pay estimated tax: Make a payment  by:* Make later  installments  by:* Before April 1 April 15 June 16     Sept. Income tax extension 15     Jan. Income tax extension 15 next year April 1–May 31 June 16 Sept. Income tax extension 15     Jan. Income tax extension 15 next year June 1–Aug. Income tax extension 31 Sept. Income tax extension 15 Jan. Income tax extension 15 next year After Aug. Income tax extension 31 Jan. Income tax extension 15 next year (None) *See January payment and Saturday, Sunday, holiday rule . Income tax extension How much to pay to avoid penalty. Income tax extension   To determine how much you should pay by each payment due date, see How To Figure Each Payment , later. Income tax extension Farmers and Fishermen If at least two-thirds of your gross income for 2013 or 2014 is from farming or fishing, you have only one payment due date for your 2014 estimated tax, January 15, 2015. Income tax extension The due dates for the first three payment periods, discussed under When To Pay Estimated Tax , earlier, do not apply to you. Income tax extension If you file your 2014 Form 1040 by March 2, 2015, and pay all the tax you owe at that time, you do not need to make an estimated tax payment. Income tax extension Fiscal year farmers and fishermen. Income tax extension   If you are a farmer or fisherman, but your tax year does not start on January 1, you can either: Pay all your estimated tax by the 15th day after the end of your tax year, or File your return and pay all the tax you owe by the 1st day of the 3rd month after the end of your tax year. Income tax extension How To Figure Each Payment After you have figured your total estimated tax, figure how much you must pay by the due date of each payment period. Income tax extension You should pay enough by each due date to avoid a penalty for that period. Income tax extension If you do not pay enough during any payment period, you may be charged a penalty even if you are due a refund when you file your tax return. Income tax extension The penalty is discussed in chapter 4. Income tax extension Regular Installment Method If your first estimated tax payment is due April 15, 2014, you can figure your required payment for each period by dividing your annual estimated tax due (line 16a of the 2014 Estimated Tax Worksheet (Worksheet 2-1)) by 4. Income tax extension Enter this amount on line 17. Income tax extension However, use this method only if your income is basically the same throughout the year. Income tax extension Change in estimated tax. Income tax extension   After you make an estimated tax payment, changes in your income, adjustments, deductions, credits, or exemptions may make it necessary for you to refigure your estimated tax. Income tax extension Pay the unpaid balance of your amended estimated tax by the next payment due date after the change or in installments by that date and the due dates for the remaining payment periods. Income tax extension If you do not receive your income evenly throughout the year, your required estimated tax payments may not be the same for each period. Income tax extension See Annualized Income Installment Method . Income tax extension Amended estimated tax. Income tax extension If you refigure your estimated tax during the year, or if your first estimated tax payment is due after April 15, 2014, figure your required payment for each remaining payment period using Worksheet 2-14. Income tax extension Example. Income tax extension Early in 2014, Mira Roberts figures that her estimated tax due is $1,800. Income tax extension She makes estimated tax payments on April 15 and June 16 of $450 each ($1,800 ÷ 4). Income tax extension On July 10, she sells investment property at a gain. Income tax extension Her refigured estimated tax is $4,100. Income tax extension Her required estimated tax payment for the third payment period is $2,175, as shown in her filled-in Worksheet 2-14. Income tax extension If Mira's estimated tax does not change again, her required estimated tax payment for the fourth payment period will be $1,025. Income tax extension Worksheet 2-14. Income tax extension Amended Estimated Tax Worksheet—Illustrated               1. Income tax extension Amended total estimated tax due 1. Income tax extension $4,100 2. Income tax extension Multiply line 1 by:           50% (. Income tax extension 50) if next payment is due June 16, 2014           75% (. Income tax extension 75) if next payment is due September 15,  2014           100% (1. Income tax extension 00) if next payment is due January 15,  2015 2. Income tax extension 3,075     3. Income tax extension Estimated tax payments for all previous periods 3. Income tax extension 900     4. Income tax extension 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. Income tax extension $2,175       Note. Income tax extension If the payment on line 4 is due January 15, 2015, stop here. Income tax extension Otherwise, go to line 5. Income tax extension         5. Income tax extension Add lines 3 and 4 5. Income tax extension 3,075 6. Income tax extension Subtract line 5 from line 1 and enter the result (but not less than zero) 6. Income tax extension 1,025 7. Income tax extension Each following required payment: If the payment on line 4 is due June 16, 2014, enter one-half of the amount on line 6 here and on the payment vouchers for your payments due September 15, 2014, and January 15, 2015. Income tax extension If the amount on line 4 is due September 15, 2014, enter the amount from line 6 here and on the payment voucher for your payment due January 15, 2015 7. Income tax extension $1,025 Worksheet 2-14. Income tax extension Amended Estimated Tax Worksheet—Blank               1. Income tax extension Amended total estimated tax due 1. Income tax extension   2. Income tax extension Multiply line 1 by:           50% (. Income tax extension 50) if next payment is due June 16, 2014           75% (. Income tax extension 75) if next payment is due September 15,  2014           100% (1. Income tax extension 00) if next payment is due January 15,  2015 2. Income tax extension       3. Income tax extension Estimated tax payments for all previous periods 3. Income tax extension       4. Income tax extension 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. Income tax extension         Note. Income tax extension If the payment on line 4 is due January 15, 2015, stop here. Income tax extension Otherwise, go to line 5. Income tax extension         5. Income tax extension Add lines 3 and 4 5. Income tax extension   6. Income tax extension Subtract line 5 from line 1 and enter the result (but not less than zero) 6. Income tax extension   7. Income tax extension Each following required payment: If the payment on line 4 is due June 16, 2014, enter one-half of the amount on line 6 here and on the payment vouchers for your payments due September 15, 2014, and January 15, 2015. Income tax extension If the amount on line 4 is due September 15, 2014, enter the amount from line 6 here and on the payment voucher for your payment due January 15, 2015 7. Income tax extension   Underpayment penalty. Income tax extension   The penalty is figured separately for each payment period. Income tax extension If you figure your payments using the regular installment method and later refigure your payments because of an increase in income, you may be charged a penalty for underpayment of estimated tax for the period(s) before you changed your payments. Income tax extension To see how you may be able to avoid or reduce this penalty, see Annualized Income Installment Method (Schedule AI) in chapter 4. Income tax extension Annualized Income Installment Method If you do not receive your income evenly throughout the year (for example, your income from a repair shop you operate is much larger in the summer than it is during the rest of the year), your required estimated tax payment for one or more periods may be less than the amount figured using the regular installment method. Income tax extension The annualized income installment method annualizes your tax at the end of each period based on a reasonable estimate of your income, deductions, and other items relating to events that occurred from the beginning of the tax year through the end of the period. Income tax extension To see whether you can pay less for any period, complete the 2014 Annualized Estimated Tax Worksheet (Worksheet 2-9). Income tax extension You first must complete the 2014 Estimated Tax Worksheet (Worksheet 2-1) through line 16b. Income tax extension Use the result you figure on line 32 of Worksheet 2-9 to make your estimated tax payments and complete your payment vouchers. Income tax extension Note. Income tax extension If you use the annualized income installment method to figure your estimated tax payments, you must file Form 2210 with your 2014 tax return. Income tax extension See Annualized Income Installment Method (Schedule AI) in chapter 4 for more information. Income tax extension Instructions for the 2014 Annualized Estimated Tax Worksheet (Worksheet 2-9) Use Worksheet 2-9 to help you follow these instructions. Income tax extension The purpose of this worksheet is to determine your estimated tax liability as your income accumulates throughout the year, rather than dividing your entire year's estimated tax liability by four as if your income was earned equally throughout the year. Income tax extension The top of the worksheet shows the dates for each payment period. Income tax extension The periods build; that is, each period includes all previous periods. Income tax extension After the end of each payment period, complete the corresponding worksheet column to figure the payment due for that period. Income tax extension Line 1. Income tax extension   Enter your AGI for the period. Income tax extension This is your gross income for the period, including your share of partnership or S corporation income or loss, minus your adjustments to income for that period. Income tax extension See Expected AGI—Line 1 , earlier. Income tax extension Self-employment income. Income tax extension   If you had self-employment income, first complete Section B of this worksheet. Income tax extension Use the amounts on line 43 when figuring your expected AGI to enter in each column of Section A, line 1. Income tax extension Line 4. Income tax extension   Be sure to consider all deduction limits figured on Schedule A (Form 1040), such as reducing your medical expenses by 10% (7. Income tax extension 5% if either you or your spouse was born before January 2, 1950) or reducing certain miscellaneous deductions by 2% of your AGI. Income tax extension Figure your deduction limits using your expected AGI in the corresponding column of line 1 (2014 Annualized Estimated Tax Worksheet (Worksheet 2-9)). Income tax extension Line 6. Income tax extension   Multiply line 4 by line 5 and enter the result on line 6 unless line 3 is more than $305,050 if married filing jointly or qualifying widow(er), $279,650 if head of household, $254,200 if single, or $152,525 if married filing separately. Income tax extension In that case, use Worksheet 2-10 to figure the amount to enter on line 6. Income tax extension Complete Worksheet 2–10 for each period, as necessary. Income tax extension Line 7. Income tax extension   If you will not itemize your deductions, use Worksheet 2-4 to figure your standard deduction. Income tax extension Line 10. Income tax extension   Multiply $3,950 by your total expected exemptions and enter the result on line 10 unless line 3 is more than $305,050 if married filing jointly or qualifying widow(er), $279,650 if head of household, $254,200 if single, or $152,525 if married filing separately. Income tax extension   In that case, use Worksheet 2-11 to figure the amount to enter on line 10. Income tax extension Line 12. Income tax extension   Generally, you will use the Tax Rate Schedules to figure the tax on your annualized income. Income tax extension However, see below for situations where you must use a different method to compute your estimated tax. Income tax extension Tax on child's investment income. Income tax extension   You must use a special method to figure tax on the income of the following children who have more than $2,000 of investment income. Income tax extension Children under age 18 at the end of 2014. Income tax extension The following children if their earned income is not more than half their support. Income tax extension Children age 18 at the end of 2014. Income tax extension Children who are full-time students over age 18 and under age 24 at the end of 2014. Income tax extension See Publication 929. Income tax extension Tax on net capital gain. Income tax extension   The regular income tax rates for individuals do not apply to a net capital gain. Income tax extension Instead, your net capital gain is taxed at a lower maximum rate. Income tax extension   The term “net capital gain” means the amount by which your net long-term capital gain for the year is more than your net short-term capital loss. Income tax extension Tax on qualified dividends and capital gains. Income tax extension   For 2014, your capital gain and dividends rate will depend on your income. Income tax extension Tax on capital gain or qualified dividends. Income tax extension If the amount on line 1 includes a net capital gain or qualified dividends, use Worksheet 2-12 to figure the amount to enter on line 12. Income tax extension Tax if excluding foreign earned income or excluding or deducting foreign housing. Income tax extension If you expect to claim the foreign earned income exclusion or the housing exclusion or deduction on Form 2555 or Form 2555-EZ, use Worksheet 2-13 to figure the amount to enter on line 12. Income tax extension Line 13. Income tax extension   If you file Form 1040, add the tax from Forms 8814, 4972, and 6251 for the period. Income tax extension If you file Form 1040A, add the amount from the Alternative Minimum Tax Worksheet found in the instructions. Income tax extension Also include any recapture of an education credit for each period. Income tax extension You may owe this tax if you claimed an education credit in an earlier year and you received either tax-free educational assistance or a refund of qualifying expenses for the same student after filing your 2013 return. Income tax extension   Use the 2013 forms or worksheets to see if you will owe any of the taxes discussed above. Income tax extension Figure the tax based on your income and deductions during the period shown in the column headings. Income tax extension Multiply this amount by the annualization amounts shown for each column on line 2 of the 2014 Annualized Estimated Tax Worksheet (Worksheet 2-9). Income tax extension Enter the result on line 13 of this worksheet. Income tax extension Line 15. Income tax extension   Include all the nonrefundable credits you expect to claim because of events that will occur during the period. Income tax extension Note. Income tax extension When figuring your credits for each period, annualize any item of income or deduction to figure each credit. Income tax extension For example, if you need to use your AGI to figure a credit, use line 3 of Worksheet 2-9 to figure the credit for each column. Income tax extension Line 18. Income tax extension   Add your expected other taxes. Income tax extension   Other taxes include the following. Income tax extension Additional tax on early distributions from: An IRA or other qualified retirement plan, A tax-sheltered annuity, or A modified endowment contract entered into after June 20, 1988. Income tax extension Household employment taxes if: You will have federal income tax withheld from wages, pensions, annuities, gambling winnings, or other income, or You would be required to make estimated tax payments even if you did not include household employment taxes when figuring your estimated tax. Income tax extension Amounts on Form 1040 written on the line for “other taxes” (line 60 on the 2013 Form 1040). Income tax extension But do not include recapture of a federal mortgage subsidy; tax on excess golden parachute payments; look-back interest due under section 167(g) or 460(b) of the Internal Revenue Code; excise tax on insider stock compensation from an expatriated corporation; uncollected social security, Medicare, or RRTA tax on tips or group-term life insurance; or additional tax on advance payments of health coverage tax credit when not eligible. Income tax extension Repayment of the first-time homebuyer credit if the home will cease to be your main home in 2014. Income tax extension See Form 5405 for exceptions. Income tax extension Additional Medicare Tax. Income tax extension A 0. Income tax extension 9% Additional Medicare Tax applies to your combined Medicare wages and self-employment income and/or your RRTA compensation that exceeds the amount listed in the following chart, based on your filing status. Income tax extension Filing Status Threshold Amount Married filing jointly $250,000 Married filing separately $125,000 Single $200,000 Head of household $200,000 Qualifying Widow(er) $200,000 Medicare wages and self-employment income are combined to determine if your income exceeds the threshold. Income tax extension A self-employment loss should not be considered for purposes of this tax. Income tax extension RRTA compensation should be separately compared to the threshold. Income tax extension Your employer is responsible for withholding the 0. Income tax extension 9% Additional Medicare Tax on Medicare wages or RRTA compensation it pays you in excess of $200,000 in 2014. Income tax extension You should consider this withholding, if applicable, in determining whether you need to make an estimated payment. Income tax extension For more information on Additional Medicare Tax, go to IRS. Income tax extension gov and enter “Additional Medicare Tax” in the search box. Income tax extension Net Investment Income Tax (NIIT). Income tax extension The NIIT is 3. Income tax extension 8% of the lesser of your net investment income or the excess of your modified adjusted gross income over a specified threshold amount. Income tax extension Threshold amounts: Filing Status Threshold Amount Married filing jointly $250,000 Married filing separately $125,000 Single $200,000 Head of household $200,000 Qualifying Widow(er) $250,000 For more information on Net Investment Income Tax, go to IRS. Income tax extension gov and enter “Net Investment Income Tax” in the search box. Income tax extension Line 20. Income tax extension   Include all the refundable credits (other than withholding credits) you can claim because of events that occurred during the period. Income tax extension Note. Income tax extension When figuring your refundable credits for each period, annualize any item of income or deduction used to figure each credit. Income tax extension Line 29. Income tax extension   If line 28 is smaller than line 25 and you are not certain of the estimate of your 2014 tax, you can avoid a penalty by entering the amount from line 25 on line 29. Income tax extension Line 31. Income tax extension   For each period, include estimated tax payments made and any excess social security and railroad retirement tax. Income tax extension   Also include estimated federal income tax withholding. Income tax extension One-fourth of your estimated withholding is considered withheld on the due date of each payment period. Income tax extension To figure the amount to include on line 31 for each period, multiply your total expected withholding for 2014 by: 25% (. Income tax extension 25) for the first period, 50% (. Income tax extension 50) for the second period, 75% (. Income tax extension 75) for the third period, and 100% (1. Income tax extension 00) for the fourth period. Income tax extension   However, you may choose to include your withholding according to the actual dates on which the amounts will be withheld. Income tax extension For each period, include withholding made from the beginning of the period up to and including the payment due date. Income tax extension You can make this choice separately for the taxes withheld from your wages and all other withholding. Income tax extension For an explanation of what to include in withholding, see Total Estimated Tax Payments Needed—Line 16a , earlier. Income tax extension Nonresident aliens. Income tax extension   If you will file Form 1040NR and you do not receive wages as an employee subject to U. Income tax extension S. Income tax extension income tax withholding, the instructions for the worksheet are modified as follows. Income tax extension Skip column (a). Income tax extension On line 1, enter your income for the period that is effectively connected with a U. Income tax extension S. Income tax extension trade or business. Income tax extension On line 21, increase your entry by the amount determined by multiplying your income for the period that is not effectively connected with a U. Income tax extension S. Income tax extension trade or business by the following. Income tax extension 72% for column (b). Income tax extension 45% for column (c). Income tax extension 30% for column (d). Income tax extension However, if you can use a treaty rate lower than 30%, use the percentages determined by multiplying your treaty rate by 2. Income tax extension 4, 1. Income tax extension 5, and 1, respectively. Income tax extension On line 26, enter one-half of the amount from line 16c of the Form 1040-ES (NR) 2014 Estimated Tax Worksheet in column (b), and one-fourth in columns (c) and (d) of Worksheet 2-9. Income tax extension On lines 24 and 27, skip column (b). Income tax extension On line 31, if you do not use the actual withholding method, include one-half of your total expected withholding in column (b) and one-fourth in columns (c) and (d). Income tax extension See Publication 519 for more information. Income tax extension Estimated Tax Payments Not Required You do not have to pay estimated tax if your withholding in each payment period is at least as much as: One-fourth of your required annual payment, or Your required annualized income installment for that period. Income tax extension You also do not have to pay estimated tax if you will pay enough through withholding to keep the amount you will owe with your return under $1,000. Income tax extension How To Pay Estimated Tax There are several ways to pay estimated tax. Income tax extension Credit an overpayment on your 2013 return to your 2014 estimated tax. Income tax extension Pay by direct transfer from your bank account, or pay by credit or debit card using a pay-by-phone system or the Internet. Income tax extension Send in your payment (check or money order) with a payment voucher from Form 1040-ES. Income tax extension Credit an Overpayment If you show an overpayment of tax after completing your Form 1040 or Form 1040A for 2013, you can apply part or all of it to your estimated tax for 2014. Income tax extension On Form 1040, or Form 1040A, enter the amount you want credited to your estimated tax rather than refunded. Income tax extension Take the amount you have credited into account when figuring your estimated tax payments. Income tax extension If you timely file your 2013 return, treat the credit as a payment made on April 15, 2014. Income tax extension If you are a beneficiary of an estate or trust, and the trustee elects to credit 2014 trust payments of estimated tax to you, you can treat the amount credited as paid by you on January 15, 2015. Income tax extension If you choose to have an overpayment of tax credited to your estimated tax, you cannot have any of that amount refunded to you until you file your tax return for the following year. Income tax extension You also cannot use that overpayment in any other way. Income tax extension Example. Income tax extension When Kathleen finished filling out her 2013 tax return, she saw that she had overpaid her taxes by $750. Income tax extension Kathleen knew she would owe additional tax in 2014. Income tax extension She credited $600 of the overpayment to her 2014 estimated tax and had the remaining $150 refunded to her. Income tax extension In September, she amended her 2013 return by filing Form 1040X, Amended U. Income tax extension S. Income tax extension Individual Income Tax Return. Income tax extension It turned out that she owed $250 more in tax than she had thought. Income tax extension This reduced her 2013 overpayment from $750 to $500. Income tax extension Because the $750 had already been applied to her 2014 estimated tax or refunded to her, the IRS billed her for the additional $250 she owed, plus penalties and interest. Income tax extension Kathleen could not use any of the $600 she had credited to her 2014 estimated tax to pay this bill. Income tax extension Pay Online Paying online is convenient and secure and helps make sure we get your payments on time. Income tax extension You can make your estimated tax payments online when you e-file or at any time during the year. Income tax extension You can pay using either of the following electronic payment methods. Income tax extension Direct transfer from your bank account. Income tax extension Credit or debit card. Income tax extension To pay your taxes online or for more information, go to www. Income tax extension irs. Income tax extension gov/e-pay. Income tax extension Pay by Phone Paying by phone is another safe and secure method of paying electronically. Income tax extension Use one of the following methods. Income tax extension Direct transfer from your bank account. Income tax extension Credit or debit card. Income tax extension To pay by direct transfer from your bank account, call EFTPS Customer Service at 1-800-555-4477 (English), 1-800-244-4829 (Espanol), or TTY/TDD 1-800-733-4829. Income tax extension To pay using a credit or debit card, you can call one of the following service providers. Income tax extension There is a convenience fee charged by these providers that varies by provider, card type, and payment amount. Income tax extension WorldPay 1-888-9-PAY-TAXTM (1-888-972-9829) www. Income tax extension payUSAtax. Income tax extension com Official Payments Corporation 1-888-UPAY-TAXTM (1-888-872-9829) www. Income tax extension officialpayments. Income tax extension com Link2GOV Corporation 1-888-PAY-1040TM (1-888-729-1040) www. Income tax extension PAY1040. Income tax extension com For the latest details on how to pay by phone, go to www. Income tax extension irs. Income tax extension gov/e-pay. Income tax extension Pay by Check or Money Order Using the Estimated Tax Payment Voucher Each payment of estimated tax by check or money order must be accompanied by a payment voucher from Form 1040-ES. Income tax extension If you use your own envelopes (and not the window envelope that comes with the 1040-ES package), make sure you mail your payment vouchers to the address shown in the Form 1040-ES instructions for the place where you live. Income tax extension Do not use the address shown in the Form 1040 or Form 1040A instructions. Income tax extension If you did not pay estimated tax last year, get a copy of Form 1040-ES from the IRS (see chapter 5). Income tax extension Follow the instructions to make sure you use the vouchers correctly. Income tax extension Joint estimated tax payments. Income tax extension    If you file a joint return and are making joint estimated tax payments, enter the names and social security numbers on the payment voucher in the same order as they will appear on the joint return. Income tax extension Change of address. Income tax extension    You must notify the IRS if you are making estimated tax payments and you changed your address during the year. Income tax extension Complete Form 8822, Change of Address, and mail it to the address shown in the instructions for that form. Income tax extension Worksheets for Chapter 2 Use the following worksheets and tables to figure your correct estimated tax. Income tax extension IF you need. Income tax extension . Income tax extension . Income tax extension THEN use. Income tax extension . Income tax extension . Income tax extension 2014 Tax Rate Schedules   the 2014 Estimated Tax Worksheet Worksheet 2-1 to estimate your taxable social security and railroad retirement benefits—line 1 of ES Worksheet (or Annualized ES Worksheet (Worksheet 2-9)) Worksheet 2-2 to estimate your self-employment (SE) tax and your deduction for SE tax—lines 1 and 11 of ES Worksheet (lines 1 and 17 of Annualized ES Worksheet (Worksheet 2-9)) Worksheet 2-3 to estimate your standard deduction—line 2 of ES Worksheet (line 7 of Annualized ES Worksheet (Worksheet 2-9)) Worksheet 2-4 to reduce your itemized deductions because your estimated AGI is more than $152,525—line 2 of ES Worksheet Worksheet 2-5 to reduce your exemption amount because your estimated AGI is more than $152,525—line 4 of ES Worksheet Worksheet 2-6 to estimate your income tax if line 1 of your ES Worksheet includes a net capital gain or qualified dividends—line 6 of ES Worksheet Worksheet 2-7 to estimate your income tax if you expect to claim a foreign earned income exclusion or foreign housing exclusion or deduction on Form 2555 or Form 2555-EZ—line 6 of ES Worksheet Worksheet 2-8 the 2014 Annualized Estimated Tax Worksheet (Annualized ES Worksheet) Worksheet 2-9 to reduce your itemized deductions because your estimated annualized AGI is more than $152,525—line 6 of Annualized ES Worksheet Worksheet 2-10 to reduce your exemption amount because your estimated annualized AGI is more than $152,525—line 10 of Annualized ES Worksheet Worksheet 2-11 to estimate your income tax if line 1 of your Annualized ES Worksheet includes a net capital gain or qualified dividends—line 12 of Annualized ES Worksheet Worksheet 2-12 to estimate your income tax if you expect to claim a foreign earned income exclusion or foreign housing exclusion or deduction on Form 2555 or Form 2555-EZ—line 12 of Annualized ES Worksheet Worksheet 2-13 to refigure (amend) your estimated tax during the year Worksheet 2-14 2014 Tax Rate Schedules Do not use these Tax Rate Schedules to figure your 2013 taxes. Income tax extension Use them only to figure your 2014 estimated taxes. Income tax extension Schedule X—Use if your 2014 filing status is  Single Schedule Z—Use if your 2014 filing status is Head of household If line 5 is: The tax is:     If line 5 is: The tax is:     Over— But not  over—         of the  amount  over— Over— But not  over—         of the  amount  over— $0 $9,075     10. Income tax extension 0%   $0 $0 $12,950     10. Income tax extension 0%   $0 9,075 36,900 $907. Income tax extension 50 + 15. Income tax extension 0%   9,075 12,950 49,400 $1,295. Income tax extension 00 + 15. Income tax extension 0%   12,950 36,900 89,350 5,081. Income tax extension 25 + 25. Income tax extension 0%   36,900 49,400 127,550 6,762. Income tax extension 50 + 25. Income tax extension 0%   49,400 89,350 186,350 18,193. Income tax extension 75 + 28. Income tax extension 0%   89,350 127,550 206,600 26,300. Income tax extension 00 + 28. Income tax extension 0%   127,550 186,350 405,100 45,353. Income tax extension 75 + 33. Income tax extension 0%   186,350 206,600 405,100 48,434. Income tax extension 00 + 33. Income tax extension 0%   206,600 405,100 406,750 117,541. Income tax extension 25 + 35. Income tax extension 0%   405,100 405,100 432,200 113,939. Income tax extension 00 + 35. Income tax extension 0%   405,100 406,750 - - - - - - 118,118. Income tax extension 75 + 39. Income tax extension 6%   406,750 432,200 - - - - - - 123,424. Income tax extension 00 + 39. Income tax extension 6%   432,200 Schedule Y-1—Use if your 2014 filing status is Married filing jointly or Qualifying widow(er) Schedule Y-2—Use if your 2014 filing status is  Married filing separately If line 5 is: The tax is:     If line 5 is: The tax is:     Over— But not  over—         of the  amount  over— Over— But not  over—         of the  amount  over— $0 $18,150     10. Income tax extension 0%   $0 $0 $9,075     10. Income tax extension 0%   $0 18,150 73,800 $1,815. Income tax extension 00 + 15. Income tax extension 0%   18,150 9,075 36,900 $907. Income tax extension 50 + 15. Income tax extension 0%   9,075 73,800 148,850 10,162. Income tax extension 50 + 25. Income tax extension 0%   73,800 36,900 74,425 5,081. Income tax extension 25 + 25. Income tax extension 0%   36,900 148,850 226,850 28,925. Income tax extension 00 + 28. Income tax extension 0%   148,850 74,425 113,425 14,462. Income tax extension 50 + 28. Income tax extension 0%   74,425 226,850 405,100 50,765. Income tax extension 00 + 33. Income tax extension 0%   226,850 113,425 202,550 25,382. Income tax extension 50 + 33. Income tax extension 0%   113,425 405,100 457,600 109,587. Income tax extension 50 + 35. Income tax extension 0%   405,100 202,550 228,800 54,793. Income tax extension 75 + 35. Income tax extension 0%   202,550 457,600 - - - - - - 127,962. Income tax extension 50 + 39. Income tax extension 6%   457,600 228,800 - - - - - - 63,981. Income tax extension 25 + 39. Income tax extension 6%   228,800                             Worksheet 2-1. Income tax extension 2014 Estimated Tax Worksheet When this worksheet refers you to instructions, you can find those instructions in the Instructions for 2014 Form 1040-ES. Income tax extension 1 Adjusted gross income you expect in 2014 (see instructions) 1     2 If you plan to itemize deductions, enter the estimated total of your itemized deductions. Income tax extension  Caution: If line 1 is over $152,525, your deduction may be reduced. Income tax extension See Worksheet 2-5. Income tax extension If you do not plan to itemize deductions, enter your standard deduction. Income tax extension 2     3 Subtract line 2 from line 1 3     4 Exemptions. Income tax extension Multiply $3,950 by the number of personal exemptions. Income tax extension  Caution: If line 1 is over $152,525, the amount of your personal exemptions may be limited. Income tax extension See Worksheet 2-6. Income tax extension 4     5 Subtract line 4 from line 3 5     6 Tax. Income tax extension Figure your tax on the amount on line 5 by using the 2014 Tax Rate Schedules Caution: If you will have qualified dividends or a net capital gain, or expect to exclude or deduct foreign earned income or housing, see Worksheets 2-7 and 2-8 to figure the tax 6     7 Alternative minimum tax from Form 6251 or included on Form 1040A, line 28 7     8 Add lines 6 and 7. Income tax extension Add to this amount any other taxes you expect to include in the total on Form 1040, line 44 8     9 Credits (see instructions). Income tax extension Do not include any income tax withholding on this line 9     10 Subtract line 9 from line 8. Income tax extension If zero or less, enter -0- 10     11 Self-employment tax (see instructions) 11     12 Other taxes including, if applicable, Additional Medicare Tax and/or NIIT (see instructions) 12     13a Add lines 10 through 12 13a     b Earned income credit, additional child tax credit, fuel tax credit, and refundable American opportunity credit 13b     c Total 2014 estimated tax. Income tax extension Subtract line 13b from line 13a. Income tax extension If zero or less, enter -0- ▶ 13c     14a Multiply line 13c by 90% (662/3% for farmers and fishermen) 14a           b Required annual payment based on prior year's tax (see instructions) 14b           c Required annual payment to avoid a penalty. Income tax extension Enter the smaller of line 14a or 14b ▶ 14c        Caution: Generally, if you do not prepay (through income tax withholding and estimated tax payments) at least the amount on line 14c, you may owe a penalty for not paying enough estimated tax. Income tax extension To avoid a penalty, make sure your estimate on line 13c is as accurate as possible. Income tax extension Even if you pay the required annual payment, you may still owe tax when you file your return. Income tax extension If you prefer, you can pay the amount shown on line 13c. Income tax extension                         15 Income tax withheld and estimated to be withheld during 2014 (including income tax withholding on pensions, annuities, certain deferred income, etc. Income tax extension ) 15     16a Subtract line 15 from line 14c 16a             Is the result zero or less? □ Yes. Income tax extension Stop here. Income tax extension You are not required to make estimated tax payments. Income tax extension  □ No. Income tax extension Go to line 16b. Income tax extension             b Subtract line 15 from line 13c 16b             Is the result less than $1,000? □ Yes. Income tax extension Stop here. Income tax extension You are not required to make estimated tax payments. Income tax extension  □ No. Income tax extension Go to line 17 to figure your required payment. Income tax extension                         17 If the first payment you are required to make is due April 15, 2014, enter ¼ of line 16a (minus any 2013 overpayment that you are applying to this installment) here, and on your estimated tax payment voucher(s) if you are paying by check or money order 17     Worksheet 2-2. Income tax extension 2014 Estimated Tax Worksheet—Line 1 Estimated Taxable Social Security and Railroad Retirement Benefits Note. Income tax extension If you are using this worksheet to estimate your taxable social security or railroad retirement benefits for Worksheet 2-9, 2014 Annualized Estimated Tax Worksheet, multiply the expected amount of benefits for each period by the annualization amount shown on Worksheet 2-9, line 2, for the same period before entering it on line 1 below. Income tax extension     1. Income tax extension Enter your expected social security and railroad retirement benefits 1. Income tax extension   2. Income tax extension Enter one-half of line 1 2. Income tax extension   3. Income tax extension Enter your expected total income. Income tax extension Do not include any social security and railroad retirement benefits, nontaxable interest income, nontaxable IRA distributions, or nontaxable pension distributions 3. Income tax extension   4. Income tax extension Enter your expected nontaxable interest income 4. Income tax extension   5. Income tax extension Enter (as a positive amount) the total of any expected exclusions or deductions for: U. Income tax extension S. Income tax extension savings bond interest used for higher education expenses (Form 8815) Employer-provided adoption benefits (Form 8839) Foreign earned income or housing (Form 2555 or 2555-EZ) Income by bona fide residents of American Samoa (Form 4563) or Puerto Rico 5. Income tax extension   6. Income tax extension Add lines 2, 3, 4, and 5 6. Income tax extension   7. Income tax extension Enter your expected adjustments to income. Income tax extension Do not include any student loan interest deduction 7. Income tax extension   8. Income tax extension Subtract line 7 from line 6. Income tax extension If zero or less, stop here. Income tax extension  Note. Income tax extension Do not include any social security or railroad retirement benefits in the amount on line 1 of your 2014 Estimated Tax Worksheet (Worksheet 2-1) (or Annualized Estimated Tax Worksheet (Worksheet 2-9)) 8. Income tax extension   9. Income tax extension 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. Income tax extension   10. Income tax extension Subtract line 9 from line 8. Income tax extension If zero or less, stop here. Income tax extension  Note. Income tax extension Do not include any social security or railroad retirement benefits in the amount on line 1 of your Worksheet 2-1 (or Annualized Estimated Tax Worksheet (Worksheet 2-9)) 10. Income tax extension   11. Income tax extension 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. Income tax extension   12. Income tax extension Subtract line 11 from line 10. Income tax extension If zero or less, enter -0- 12. Income tax extension   13. Income tax extension Enter the smaller of line 10 or line 11 13. Income tax extension   14. Income tax extension Enter one-half of line 13 14. Income tax extension   15