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123easytaxfiling com 19. 123easytaxfiling com   Education- Related Adjustments Table of Contents Introduction Useful Items - You may want to see: Student Loan Interest DeductionStudent Loan Interest Defined Can You Claim the Deduction How Much Can You Deduct How Do You Figure the Deduction Tuition and Fees DeductionCan You Claim the Deduction What Expenses Qualify Who Is an Eligible Student Who Can Claim a Dependent's Expenses How Much Can You Deduct Educator Expenses Introduction This chapter discusses the education-related adjustment you can deduct in figuring your adjusted gross income. 123easytaxfiling com This chapter covers the student loan interest deduction, tuition and fees deduction, and the deduction for educator expenses. 123easytaxfiling com Useful Items - You may want to see: Publication 970 Tax Benefits for Education Student Loan Interest Deduction Generally, personal interest you pay, other than certain mortgage interest, is not deductible on your tax return. 123easytaxfiling com However, if your modified adjusted gross income (MAGI) is less than $75,000 ($155,000 if filing a joint return) there is a special deduction allowed for paying interest on a student loan (also known as an education loan) used for higher education. 123easytaxfiling com For most taxpayers, MAGI is the adjusted gross income as figured on their federal income tax return before subtracting any deduction for student loan interest. 123easytaxfiling com This deduction can reduce the amount of your income subject to tax by up to $2,500 in 2013. 123easytaxfiling com Table 19-1 summarizes the features of the student loan interest deduction. 123easytaxfiling com Table 19-1. 123easytaxfiling com Student Loan Interest Deduction at a Glance Do not rely on this table alone. 123easytaxfiling com Refer to the text for more details. 123easytaxfiling com Feature Description Maximum benefit You can reduce your income subject to tax by up to $2,500. 123easytaxfiling com Loan qualifications Your student loan: •  must have been taken out solely to pay qualified education expenses, and   • cannot be from a related person or made under a qualified employer plan. 123easytaxfiling com Student qualifications The student must be: • you, your spouse, or your dependent, and   • enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential at an eligible educational institution. 123easytaxfiling com Time limit on deduction You can deduct interest paid during the remaining period of your student loan. 123easytaxfiling com Phaseout The amount of your deduction depends on your income level. 123easytaxfiling com Student Loan Interest Defined Student loan interest is interest you paid during the year on a qualified student loan. 123easytaxfiling com It includes both required and voluntary interest payments. 123easytaxfiling com Qualified Student Loan This is a loan you took out solely to pay qualified education expenses (defined later) that were: For you, your spouse, or a person who was your dependent (defined in chapter 3) when you took out the loan, Paid or incurred within a reasonable period of time before or after you took out the loan, and For education provided during an academic period when the student is an eligible student. 123easytaxfiling com Loans from the following sources are not qualified student loans. 123easytaxfiling com A related person. 123easytaxfiling com A qualified employer plan. 123easytaxfiling com Exceptions. 123easytaxfiling com   For purposes of the student loan interest deduction, the following are exceptions to the general rules for dependents. 123easytaxfiling com An individual can be your dependent even if you are the dependent of another taxpayer. 123easytaxfiling com An individual can be your dependent even if the individual files a joint return with a spouse. 123easytaxfiling com An individual can be your dependent even if the individual had gross income for the year that was equal to or more than the exemption amount for the year ($3,900 for 2013). 123easytaxfiling com    Reasonable period of time. 123easytaxfiling com   Qualified education expenses are treated as paid or incurred within a reasonable period of time before or after you take out the loan if they are paid with the proceeds of student loans that are part of a federal postsecondary education loan program. 123easytaxfiling com   Even if not paid with the proceeds of that type of loan, the expenses are treated as paid or incurred within a reasonable period of time if both of the following requirements are met. 123easytaxfiling com The expenses relate to a specific academic period. 123easytaxfiling com The loan proceeds are disbursed within a period that begins 90 days before the start of that academic period and ends 90 days after the end of that academic period. 123easytaxfiling com   If neither of the above situations applies, the reasonable period of time is determined based on all the relevant facts and circumstances. 123easytaxfiling com Academic period. 123easytaxfiling com   An academic period includes a semester, trimester, quarter, or other period of study (such as a summer school session) as reasonably determined by an educational institution. 123easytaxfiling com In the case of an educational institution that uses credit hours or clock hours and does not have academic terms, each payment period can be treated as an academic period. 123easytaxfiling com Eligible student. 123easytaxfiling com   This is a student who was enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential. 123easytaxfiling com Enrolled at least half-time. 123easytaxfiling com   A student was enrolled at least half-time if the student was taking at least half the normal full-time work load for his or her course of study. 123easytaxfiling com   The standard for what is half of the normal full-time work load is determined by each eligible educational institution. 123easytaxfiling com However, the standard may not be lower than any of those established by the U. 123easytaxfiling com S. 123easytaxfiling com Department of Education under the Higher Education Act of 1965. 123easytaxfiling com Related person. 123easytaxfiling com   You cannot deduct interest on a loan you get from a related person. 123easytaxfiling com Related persons include: Your spouse, Your brothers and sisters, Your half brothers and half sisters, Your ancestors (parents, grandparents, etc. 123easytaxfiling com ), Your lineal descendants (children, grandchildren, etc. 123easytaxfiling com ), and Certain corporations, partnerships, trusts, and exempt organizations. 123easytaxfiling com Qualified employer plan. 123easytaxfiling com   You cannot deduct interest on a loan made under a qualified employer plan or under a contract purchased under such a plan. 123easytaxfiling com Qualified Education Expenses For purposes of the student loan interest deduction, these expenses are the total costs of attending an eligible educational institution, including graduate school. 123easytaxfiling com They include amounts paid for the following items. 123easytaxfiling com Tuition and fees. 123easytaxfiling com Room and board. 123easytaxfiling com Books, supplies, and equipment. 123easytaxfiling com Other necessary expenses (such as transportation). 123easytaxfiling com The cost of room and board qualifies only to the extent that it is not more than: The allowance for room and board, as determined by the eligible educational institution, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student, or If greater, the actual amount charged if the student is residing in housing owned or operated by the eligible educational institution. 123easytaxfiling com Eligible educational institution. 123easytaxfiling com   An eligible educational institution is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U. 123easytaxfiling com S. 123easytaxfiling com Department of Education. 123easytaxfiling com It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. 123easytaxfiling com   Certain educational institutions located outside the United States also participate in the U. 123easytaxfiling com S. 123easytaxfiling com Department of Education's Federal Student Aid (FSA) programs. 123easytaxfiling com   For purposes of the student loan interest deduction, an eligible educational institution also includes an institution conducting an internship or residency program leading to a degree or certificate from an institution of higher education, a hospital, or a health care facility that offers postgraduate training. 123easytaxfiling com   An educational institution must meet the above criteria only during the academic period(s) for which the student loan was incurred. 123easytaxfiling com The deductibility of interest on the loan is not affected by the institution's subsequent loss of eligibility. 123easytaxfiling com    The educational institution should be able to tell you if it is an eligible educational institution. 123easytaxfiling com Adjustments to qualified education expenses. 123easytaxfiling com   You must reduce your qualified education expenses by certain tax-free items (such as the tax-free part of scholarships and fellowships). 123easytaxfiling com See chapter 4 of Publication 970 for details. 123easytaxfiling com Include as Interest In addition to simple interest on the loan, certain loan origination fees, capitalized interest, interest on revolving lines of credit, and interest on refinanced student loans can be student loan interest if all other requirements are met. 123easytaxfiling com Loan origination fee. 123easytaxfiling com   In general, this is a one-time fee charged by the lender when a loan is made. 123easytaxfiling com To be deductible as interest, the fee must be for the use of money rather than for property or services (such as commitment fees or processing costs) provided by the lender. 123easytaxfiling com A loan origination fee treated as interest accrues over the life of the loan. 123easytaxfiling com Capitalized interest. 123easytaxfiling com    This is unpaid interest on a student loan that is added by the lender to the outstanding principal balance of the loan. 123easytaxfiling com Interest on revolving lines of credit. 123easytaxfiling com   This interest, which includes interest on credit card debt, is student loan interest if the borrower uses the line of credit (credit card) only to pay qualified education expenses. 123easytaxfiling com See Qualified Education Expenses , earlier. 123easytaxfiling com Interest on refinanced student loans. 123easytaxfiling com   This includes interest on both: Consolidated loans—loans used to refinance more than one student loan of the same borrower, and Collapsed loans—two or more loans of the same borrower that are treated by both the lender and the borrower as one loan. 123easytaxfiling com If you refinance a qualified student loan for more than your original loan and you use the additional amount for any purpose other than qualified education expenses, you cannot deduct any interest paid on the refinanced loan. 123easytaxfiling com Voluntary interest payments. 123easytaxfiling com   These are payments made on a qualified student loan during a period when interest payments are not required, such as when the borrower has been granted a deferment or the loan has not yet entered repayment status. 123easytaxfiling com Do Not Include as Interest You cannot claim a student loan interest deduction for any of the following items. 123easytaxfiling com Interest you paid on a loan if, under the terms of the loan, you are not legally obligated to make interest payments. 123easytaxfiling com Loan origination fees that are payments for property or services provided by the lender, such as commitment fees or processing costs. 123easytaxfiling com Interest you paid on a loan to the extent payments were made through your participation in the National Health Service Corps Loan Repayment Program (the “NHSC Loan Repayment Program”) or certain other loan repayment assistance programs. 123easytaxfiling com For more information, see Student Loan Repayment Assistance in chapter 5 of Publication 970. 123easytaxfiling com Can You Claim the Deduction Generally, you can claim the deduction if all of the following requirements are met. 123easytaxfiling com Your filing status is any filing status except married filing separately. 123easytaxfiling com No one else is claiming an exemption for you on his or her tax return. 123easytaxfiling com You are legally obligated to pay interest on a qualified student loan. 123easytaxfiling com You paid interest on a qualified student loan. 123easytaxfiling com Interest paid by others. 123easytaxfiling com   If you are the person legally obligated to make interest payments and someone else makes a payment of interest on your behalf, you are treated as receiving the payments from the other person and, in turn, paying the interest. 123easytaxfiling com See chapter 4 of Publication 970 for more information. 123easytaxfiling com No Double Benefit Allowed You cannot deduct as interest on a student loan any amount that is an allowable deduction under any other provision of the tax law (for example, home mortgage interest). 123easytaxfiling com How Much Can You Deduct Your student loan interest deduction for 2013 is generally the smaller of: $2,500, or The interest you paid in 2013. 123easytaxfiling com However, the amount determined above is phased out (gradually reduced) if your MAGI is between $60,000 and $75,000 ($125,000 and $155,000 if you file a joint return). 123easytaxfiling com You cannot take a student loan interest deduction if your MAGI is $75,000 or more ($155,000 or more if you file a joint return). 123easytaxfiling com For details on figuring your MAGI, see chapter 4 of Publication 970. 123easytaxfiling com How Do You Figure the Deduction Generally, you figure the deduction using the Student Loan Interest Deduction Worksheet in the Form 1040 or Form 1040A instructions. 123easytaxfiling com However, if you are filing Form 2555, 2555-EZ, or 4563, or you are excluding income from sources within Puerto Rico, you must complete Worksheet 4-1 in chapter 4 of Publication 970. 123easytaxfiling com To help you figure your student loan interest deduction, you should receive Form 1098-E, Student Loan Interest Statement. 123easytaxfiling com Generally, an institution (such as a bank or governmental agency) that received interest payments of $600 or more during 2013 on one or more qualified student loans must send Form 1098-E (or acceptable substitute) to each borrower by January 31, 2014. 123easytaxfiling com For qualified student loans taken out before September 1, 2004, the institution is required to include on Form 1098-E only payments of stated interest. 123easytaxfiling com Other interest payments, such as certain loan origination fees and capitalized interest, may not appear on the form you receive. 123easytaxfiling com However, if you pay qualifying interest that is not included on Form 1098-E, you can also deduct those amounts. 123easytaxfiling com For information on allocating payments between interest and principal, see chapter 4 of Publication 970. 123easytaxfiling com To claim the deduction, enter the allowable amount on Form 1040, line 33, or Form 1040A, line 18. 123easytaxfiling com Tuition and Fees Deduction You may be able to deduct qualified education expenses paid during the year for yourself, your spouse, or your dependent(s). 123easytaxfiling com You cannot claim this deduction if your filing status is married filing separately or if another person can claim an exemption for you as a dependent on his or her tax return. 123easytaxfiling com The qualified expenses must be for higher education, as explained later under What Expenses Qualify . 123easytaxfiling com The tuition and fees deduction can reduce the amount of your income subject to tax by up to $4,000. 123easytaxfiling com Table 19-2 summarizes the features of the tuition and fees deduction. 123easytaxfiling com You may be able to take a credit for your education expenses instead of a deduction. 123easytaxfiling com You can choose the one that will give you the lower tax. 123easytaxfiling com See chapter 35, Education Credits, for details about the credits. 123easytaxfiling com Can You Claim the Deduction The following rules will help you determine if you can claim the tuition and fees deduction. 123easytaxfiling com Who Can Claim the Deduction Generally, you can claim the tuition and fees deduction if all three of the following requirements are met. 123easytaxfiling com You paid qualified education expenses of higher education in 2013 for academic periods beginning in 2013 and those beginning in the first three months of 2014. 123easytaxfiling com You paid the education expenses for an eligible student. 123easytaxfiling com The eligible student is yourself, your spouse, or your dependent for whom you claim an exemption (defined in chapter 3) on your tax return. 123easytaxfiling com Qualified education expenses are defined under What Expenses Qualify . 123easytaxfiling com Eligible students are defined later under Who Is an Eligible Student . 123easytaxfiling com Who Cannot Claim the Deduction You cannot claim the tuition and fees deduction if any of the following apply. 123easytaxfiling com Your filing status is married filing separately. 123easytaxfiling com Another person can claim an exemption for you as a dependent on his or her tax return. 123easytaxfiling com You cannot take the deduction even if the other person does not actually claim that exemption. 123easytaxfiling com Your modified adjusted gross income (MAGI) is more than $80,000 ($160,000 if filing a joint return). 123easytaxfiling com You (or your spouse) were a nonresident alien for any part of 2013 and the nonresident alien did not elect to be treated as a resident alien for tax purposes. 123easytaxfiling com More information on nonresident aliens can be found in Publication 519, U. 123easytaxfiling com S. 123easytaxfiling com Tax Guide for Aliens. 123easytaxfiling com You or anyone else claims an American opportunity or lifetime learning credit in 2013 with respect to expenses of the student for whom the qualified education expenses were paid. 123easytaxfiling com However, a state tax credit will not disqualify you from claiming a tuition and fees deduction. 123easytaxfiling com Table 19-2. 123easytaxfiling com Tuition and Fees Deduction at a Glance Do not rely on this table alone. 123easytaxfiling com Refer to the text for more details. 123easytaxfiling com Question   Answer What is the maximum benefit?   You can reduce your income subject to tax by up to $4,000. 123easytaxfiling com Where is the deduction taken?   As an adjustment to income on Form 1040, line 34, or Form 1040A, line 19. 123easytaxfiling com For whom must the expenses be paid?   A student enrolled in an eligible educational institution who is either: you, your spouse, or your dependent for whom you claim an exemption. 123easytaxfiling com What tuition and fees are deductible?   Tuition and fees required for enrollment or attendance at an eligible postsecondary educational institution, but not including personal, living, or family expenses, such as room and board. 123easytaxfiling com What Expenses Qualify The tuition and fees deduction is based on qualified education expenses you pay for yourself, your spouse, or a dependent for whom you claim an exemption on your tax return. 123easytaxfiling com Generally, the deduction is allowed for qualified education expenses paid in 2013 in connection with enrollment at an institution of higher education during 2013 or for an academic period (defined earlier under Student Loan Interest Deduction ) beginning in 2013 or in the first 3 months of 2014. 123easytaxfiling com Payments with borrowed funds. 123easytaxfiling com   You can claim a tuition and fees deduction for qualified education expenses paid with the proceeds of a loan. 123easytaxfiling com Use the expenses to figure the deduction for the year in which the expenses are paid, not the year in which the loan is repaid. 123easytaxfiling com Treat loan payments sent directly to the educational institution as paid on the date the institution credits the student's account. 123easytaxfiling com Student withdraws from class(es). 123easytaxfiling com   You can claim a tuition and fees deduction for qualified education expenses not refunded when a student withdraws. 123easytaxfiling com Qualified Education Expenses For purposes of the tuition and fees deduction, qualified education expenses are tuition and certain related expenses required for enrollment or attendance at an eligible educational institution. 123easytaxfiling com Eligible educational institution. 123easytaxfiling com   An eligible educational institution is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U. 123easytaxfiling com S. 123easytaxfiling com Department of Education. 123easytaxfiling com It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. 123easytaxfiling com The educational institution should be able to tell you if it is an eligible educational institution. 123easytaxfiling com   Certain educational institutions located outside the United States also participate in the U. 123easytaxfiling com S. 123easytaxfiling com Department of Education's Federal Student Aid (FSA) programs. 123easytaxfiling com Academic period. 123easytaxfiling com    An academic period is any quarter, semester, trimester, or any other period of study as reasonably determined by an eligible educational institution. 123easytaxfiling com If an eligible educational institution uses credit hours and does not have academic terms, each payment period may be treated as an academic period. 123easytaxfiling com Related expenses. 123easytaxfiling com   Student-activity fees and expenses for course-related books, supplies, and equipment are included in qualified education expenses for the tuition and fees deduction only if the fees and expenses must be paid to the institution as a condition of enrollment or attendance. 123easytaxfiling com Prepaid expenses. 123easytaxfiling com   Qualified education expenses paid in 2013 for an academic period that begins in the first three months of 2014 can be used in figuring the tuition and fees deduction. 123easytaxfiling com See Academic period, earlier. 123easytaxfiling com For example, if you pay $2,000 in December 2013 for qualified tuition for the 2014 winter quarter that begins in January 2014, you can use that $2,000 in figuring the tuition and fees deduction for 2013 only if you meet all the other requirements. 123easytaxfiling com    You cannot use any amount you paid in 2012 or 2014 to figure the qualified education expenses you use to figure your 2013 tuition and fees deduction. 123easytaxfiling com No Double Benefit Allowed You cannot do any of the following. 123easytaxfiling com Deduct qualified education expenses you deduct under any other provision of the law, for example, as a business expense. 123easytaxfiling com Deduct qualified education expenses for a student on your income tax return if you or anyone else claims an American opportunity or lifetime learning credit for that same student in the same year. 123easytaxfiling com Deduct qualified education expenses that have been used to figure the tax-free portion of a distribution from a Coverdell education savings account (ESA) or a qualified tuition program (QTP). 123easytaxfiling com For a QTP, this applies only to the amount of tax-free earnings that were distributed, not to the recovery of contributions to the program. 123easytaxfiling com See Figuring the Taxable Portion of a Distribution in chapter 7 (Coverdell ESA) and chapter 8 (QTP) of Publication 970. 123easytaxfiling com Deduct qualified education expenses that have been paid with tax-free interest on U. 123easytaxfiling com S. 123easytaxfiling com savings bonds (Form 8815). 123easytaxfiling com See Figuring the Tax-Free Amount in chapter 10 of Publication 970. 123easytaxfiling com Deduct qualified education expenses that have been paid with tax-free educational assistance such as a scholarship, grant, or employer-provided educational assistance. 123easytaxfiling com See Adjustments to qualified education expenses, later. 123easytaxfiling com Adjustments to qualified education expenses. 123easytaxfiling com   For each student, reduce the qualified education expenses paid by or on behalf of that student under the following rules. 123easytaxfiling com The result is the amount of adjusted qualified education expenses for each student. 123easytaxfiling com Tax-free educational assistance. 123easytaxfiling com   For tax-free educational assistance you received in 2013, reduce the qualified educational expenses for each academic period by the amount of tax-free educational assistance to that academic period. 123easytaxfiling com See Academic period, earlier. 123easytaxfiling com   This includes: The tax-free part of scholarships and fellowships, including Pell grants (see chapter 1 of Publication 970), The tax-free part of any employer-provided educational assistance (see chapter 11 of Publication 970), Veterans' educational assistance (see chapter 1 of Publication 970), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. 123easytaxfiling com Generally, any scholarship or fellowship you receive is treated as tax-free educational assistance. 123easytaxfiling com However, a scholarship or fellowship is not treated as tax-free educational assistance to the extent you include it in gross income (if you are required to file a tax return) for the year the scholarship or fellowship is received and either: The scholarship or fellowship (or any part of it) must be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in Pub. 123easytaxfiling com 970, chapter 1. 123easytaxfiling com The scholarship or fellowship (or any part of it) may be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in Pub. 123easytaxfiling com 970, chapter 1. 123easytaxfiling com You may be able to increase the combined value of your tuition and fees deduction and certain educational assistance if you include some or all of the educational assistance in income in the year it is received. 123easytaxfiling com For details, see Adjustments to Qualified Education Expenses in chapter 6 of Pub. 123easytaxfiling com 970. 123easytaxfiling com Some tax-free educational assistance received in 2013 may be treated as a refund of qualified education expenses paid in 2013. 123easytaxfiling com This tax-free educational assistance is any tax-free educational assistance received by you or anyone else after 2013 for qualified education expenses paid on behalf of a student in 2013 (or attributable to enrollment at an eligible educational institution during 2013). 123easytaxfiling com If this tax-free educational assistance is received after 2013 but before you file your 2013 income tax return, see Refunds received after 2013 but before your income tax return is filed, later. 123easytaxfiling com If this tax-free educational assistance is received after 2013 and after you file your 2013 income tax return, see Refunds received after 2013 and after your income tax return is filed, later. 123easytaxfiling com Refunds. 123easytaxfiling com   A refund of qualified education expenses may reduce adjusted qualified education expenses for the tax year or may require you to include some or all of the refund in your gross income for the year the refund is received. 123easytaxfiling com See chapter 6 of Pub. 123easytaxfiling com 970 for more information. 123easytaxfiling com Some tax-free educational assistance received after 2013 may be treated as a refund. 123easytaxfiling com See Tax-free educational assistance, earlier. 123easytaxfiling com Refunds received in 2013. 123easytaxfiling com    For each student, figure the adjusted qualified education expenses for 2013 by adding all the qualified education expenses paid in 2013 and subtracting any refunds of those expenses received from the eligible educational institution during 2013. 123easytaxfiling com Refunds received after 2013 but before your income tax return is filed. 123easytaxfiling com   If you receive a refund after 2013 of qualified education expenses you paid in 2013 and the refund is received before you file your 2013 income tax return, reduce the amount of qualified education expenses for 2013 by the amount of the refund. 123easytaxfiling com Refunds received after 2013 and after your income tax return is filed. 123easytaxfiling com   If you receive a refund after 2013 of qualified education expenses you paid in 2013 and the refund is received after you file your 2013 income tax return, you may need to include some or all of the refund in your gross income for the year the refund is received. 123easytaxfiling com See chapter 6 of Pub. 123easytaxfiling com 970 for more information. 123easytaxfiling com Coordination with Coverdell education savings accounts and qualified tuition programs. 123easytaxfiling com    Reduce your qualified education expenses by any qualified education expenses used to figure the exclusion from gross income of (a) interest received under an education savings bond program, or (b) any distribution from a Coverdell education savings account or qualified tuition program (QTP). 123easytaxfiling com For a QTP, this applies only to the amount of tax-free earnings that were distributed, not to the recovery of contributions to the program. 123easytaxfiling com Amounts that do not reduce qualified education expenses. 123easytaxfiling com   Do not reduce qualified education expenses by amounts paid with funds the student receives as: Payment for services, such as wages, A loan, A gift, An inheritance, or A withdrawal from the student's personal savings. 123easytaxfiling com   Do not reduce the qualified education expenses by any scholarship or fellowship reported as income on the student's tax return in the following situations. 123easytaxfiling com The use of the money is restricted, by the terms of the scholarship or fellowship, to costs of attendance (such as room and board) other than qualified education expenses. 123easytaxfiling com The use of the money is not restricted. 123easytaxfiling com Expenses That Do Not Qualify Qualified education expenses do not include amounts paid for: Insurance, Medical expenses (including student health fees), Room and board, Transportation, or Similar personal, living, or family expenses. 123easytaxfiling com This is true even if the amount must be paid to the institution as a condition of enrollment or attendance. 123easytaxfiling com Sports, games, hobbies, and noncredit courses. 123easytaxfiling com   Qualified education expenses generally do not include expenses that relate to any course of instruction or other education that involves sports, games or hobbies, or any noncredit course. 123easytaxfiling com However, if the course of instruction or other education is part of the student's degree program, these expenses can qualify. 123easytaxfiling com Comprehensive or bundled fees. 123easytaxfiling com   Some eligible educational institutions combine all of their fees for an academic period into one amount. 123easytaxfiling com If you do not receive, or do not have access to, an allocation showing how much you paid for qualified education expenses and how much you paid for personal expenses, such as those listed above, contact the institution. 123easytaxfiling com The institution is required to make this allocation and provide you with the amount you paid (or were billed) for qualified education expenses on Form 1098-T, Tuition Statement. 123easytaxfiling com See How Do You Figure the Deduction , later, for more information about Form 1098-T. 123easytaxfiling com Who Is an Eligible Student For purposes of the tuition and fees deduction, an eligible student is a student who is enrolled in one or more courses at an eligible educational institution (defined earlier). 123easytaxfiling com Who Can Claim a Dependent's Expenses Generally, in order to claim the tuition and fees deduction for qualified education expenses for a dependent, you must: Have paid the expenses, and Claim an exemption for the student as a dependent. 123easytaxfiling com Table 19-3 summarizes who can claim the deduction. 123easytaxfiling com How Much Can You Deduct The maximum tuition and fees deduction in 2013 is $4,000, $2,000, or $0, depending on the amount of your MAGI. 123easytaxfiling com For details on figuring your MAGI, see chapter 6 of Publication 970. 123easytaxfiling com How Do You Figure the Deduction Figure the deduction using Form 8917. 123easytaxfiling com To help you figure your tuition and fees deduction, you should receive Form 1098-T, Tuition Statement. 123easytaxfiling com Generally, an eligible educational institution (such as a college or university) must send Form 1098-T (or acceptable substitute) to each enrolled student by January 31, 2014. 123easytaxfiling com To claim the deduction, enter the allowable amount on Form 1040, line 34, or Form 1040A, line 19, and attach your completed Form 8917. 123easytaxfiling com Table 19-3. 123easytaxfiling com Who Can Claim a Dependent's Expenses Do not rely on this table alone. 123easytaxfiling com See Who Can Claim a Dependent's Expenses in chapter 6 of Publication 970. 123easytaxfiling com IF your dependent is an eligible student and you. 123easytaxfiling com . 123easytaxfiling com . 123easytaxfiling com AND. 123easytaxfiling com . 123easytaxfiling com . 123easytaxfiling com THEN. 123easytaxfiling com . 123easytaxfiling com . 123easytaxfiling com claim an exemption for your dependent you paid all qualified education expenses for your dependent only you can deduct the qualified education expenses that you paid. 123easytaxfiling com Your dependent cannot take a deduction. 123easytaxfiling com claim an exemption for your dependent your dependent paid all qualified education expenses no one is allowed to take a deduction. 123easytaxfiling com do not claim an exemption for your dependent you paid all qualified education expenses no one is allowed to take a deduction. 123easytaxfiling com do not claim an exemption for your dependent your dependent paid all qualified education expenses no one is allowed to take a deduction. 123easytaxfiling com Educator Expenses If you were an eligible educator in 2013, you can deduct on Form 1040, line 23, or Form 1040A, line 16, up to $250 of qualified expenses you paid in 2013. 123easytaxfiling com If you and your spouse are filing jointly and both of you were eligible educators, the maximum deduction is $500. 123easytaxfiling com However, neither spouse can deduct more than $250 of his or her qualified expenses on Form 1040, line 23, or Form 1040A, line 16. 123easytaxfiling com You may be able to deduct expenses that are more than the $250 (or $500) limit on Schedule A (Form 1040), line 21. 123easytaxfiling com Eligible educator. 123easytaxfiling com   An eligible educator is a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide who worked in a school for at least 900 hours during a school year. 123easytaxfiling com Qualified expenses. 123easytaxfiling com   Qualified expenses include ordinary and necessary expenses paid in connection with books, supplies, equipment (including computer equipment, software, and services), and other materials used in the classroom. 123easytaxfiling com An ordinary expense is one that is common and accepted in your educational field. 123easytaxfiling com A necessary expense is one that is helpful and appropriate for your profession as an educator. 123easytaxfiling com An expense does not have to be required to be considered necessary. 123easytaxfiling com   Qualified expenses do not include expenses for home schooling or for nonathletic supplies for courses in health or physical education. 123easytaxfiling com   You must reduce your qualified expenses by the following amounts. 123easytaxfiling com Excludable U. 123easytaxfiling com S. 123easytaxfiling com series EE and I savings bond interest from Form 8815. 123easytaxfiling com See Figuring the Tax-Free Amount in chapter 10 of Publication 970. 123easytaxfiling com Nontaxable qualified tuition program earnings or distributions. 123easytaxfiling com See Figuring the Taxable Portion of a Distribution in chapter 8 of Publication 970. 123easytaxfiling com Nontaxable distribution of earnings from a Coverdell education savings account. 123easytaxfiling com See Figuring the Taxable Portion of a Distribution in chapter 7 of Publication 970. 123easytaxfiling com Any reimbursements you received for these expenses that were not reported to you in box 1 of your Form W-2. 123easytaxfiling com Prev  Up  Next   Home   More Online Publications
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123easytaxfiling com 2. 123easytaxfiling com   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. 123easytaxfiling com This includes income from self-employment, interest, dividends, alimony, rent, gains from the sale of assets, prizes, and awards. 123easytaxfiling com 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. 123easytaxfiling com 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. 123easytaxfiling com 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. 123easytaxfiling com 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. 123easytaxfiling com For information on when the penalty applies, see chapter 4. 123easytaxfiling com 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. 123easytaxfiling com 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. 123easytaxfiling com 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. 123easytaxfiling com Worksheets. 123easytaxfiling com   You may need to use several of the blank worksheets included in this chapter. 123easytaxfiling com See Worksheets for Chapter 2, later, to locate what you need. 123easytaxfiling com 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. 123easytaxfiling com To do this, file a new Form W-4 with your employer. 123easytaxfiling com See chapter 1. 123easytaxfiling com Estimated tax not required. 123easytaxfiling com   You do not have to pay estimated tax for 2014 if you meet all three of the following conditions. 123easytaxfiling com You had no tax liability for 2013. 123easytaxfiling com You were a U. 123easytaxfiling com S. 123easytaxfiling com citizen or resident alien for the whole year. 123easytaxfiling com Your 2013 tax year covered a 12-month period. 123easytaxfiling com   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. 123easytaxfiling com Please click here for the text description of the image. 123easytaxfiling com 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. 123easytaxfiling com 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. 123easytaxfiling com General Rule In most cases, you must pay estimated tax for 2014 if both of the following apply. 123easytaxfiling com You expect to owe at least $1,000 in tax for 2014, after subtracting your withholding and refundable credits. 123easytaxfiling com 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. 123easytaxfiling com Your 2013 tax return must cover all 12 months. 123easytaxfiling com Note. 123easytaxfiling com The percentages in (2a) or (2b) above may be different if you are a farmer, fisherman, or higher income taxpayer. 123easytaxfiling com See Special Rules , later. 123easytaxfiling com 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. 123easytaxfiling com Figure 2-A takes you through the general rule. 123easytaxfiling com You may find this helpful in determining if you must pay estimated tax. 123easytaxfiling com If all your income will be subject to income tax withholding, you probably do not need to pay estimated tax. 123easytaxfiling com Example 1. 123easytaxfiling com Jane Smart uses Figure 2-A and the following information to figure whether she should pay estimated tax for 2014. 123easytaxfiling com She files as head of household claiming her dependent son, takes the standard deduction, and expects no refundable credits for 2014. 123easytaxfiling com 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). 123easytaxfiling com 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. 123easytaxfiling com 50). 123easytaxfiling com Jane does not need to pay estimated tax. 123easytaxfiling com Example 2. 123easytaxfiling com The facts are the same as in Example 1, except that Jane expects only $8,700 tax to be withheld in 2014. 123easytaxfiling com Because that is less than $9,913. 123easytaxfiling com 50, her answer to box 2a is NO. 123easytaxfiling com 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). 123easytaxfiling com Jane must increase her withholding or pay estimated tax for 2014. 123easytaxfiling com Example 3. 123easytaxfiling com The facts are the same as in Example 2, except that the total tax shown on Jane's 2013 return was $8,600. 123easytaxfiling com Because she expects to have more than $8,600 withheld in 2014 ($8,700), her answer to box 2b is YES. 123easytaxfiling com Jane does not need to pay estimated tax for 2014. 123easytaxfiling com Married Taxpayers If you qualify to make joint estimated tax payments, apply the rules discussed here to your joint estimated income. 123easytaxfiling com You and your spouse can make joint estimated tax payments even if you are not living together. 123easytaxfiling com 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). 123easytaxfiling com 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. 123easytaxfiling com These individuals can take credit only for the estimated tax payments that he or she made. 123easytaxfiling com If you and your spouse cannot make joint estimated tax payments, apply these rules to your separate estimated income. 123easytaxfiling com Making joint or separate estimated tax payments will not affect your choice of filing a joint tax return or separate returns for 2014. 123easytaxfiling com 2013 separate returns and 2014 joint return. 123easytaxfiling com   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. 123easytaxfiling com You filed a separate return if you filed as single, head of household, or married filing separately. 123easytaxfiling com 2013 joint return and 2014 separate returns. 123easytaxfiling com   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. 123easytaxfiling com You file a separate return if you file as single, head of household, or married filing separately. 123easytaxfiling com   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. 123easytaxfiling com Then multiply the tax on the joint return by the following fraction. 123easytaxfiling com      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. 123easytaxfiling com Joe and Heather filed a joint return for 2013 showing taxable income of $48,500 and a tax of $6,386. 123easytaxfiling com Of the $48,500 taxable income, $40,100 was Joe's and the rest was Heather's. 123easytaxfiling com For 2014, they plan to file married filing separately. 123easytaxfiling com 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. 123easytaxfiling com 6% Joe's share of tax on joint return  ($6,386 × 87. 123easytaxfiling com 6%) $5,594 Special Rules There are special rules for farmers, fishermen, and certain higher income taxpayers. 123easytaxfiling com 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. 123easytaxfiling com Gross income. 123easytaxfiling com   Your gross income is all income you receive in the form of money, goods, property, and services that is not exempt from tax. 123easytaxfiling com 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. 123easytaxfiling com Joint returns. 123easytaxfiling com   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. 123easytaxfiling com Gross income from farming. 123easytaxfiling com   This is income from cultivating the soil or raising agricultural commodities. 123easytaxfiling com It includes the following amounts. 123easytaxfiling com Income from operating a stock, dairy, poultry, bee, fruit, or truck farm. 123easytaxfiling com Income from a plantation, ranch, nursery, range, orchard, or oyster bed. 123easytaxfiling com Crop shares for the use of your land. 123easytaxfiling com Gains from sales of draft, breeding, dairy, or sporting livestock. 123easytaxfiling com   For 2013, gross income from farming is the total of the following amounts. 123easytaxfiling com Schedule F (Form 1040), Profit or Loss From Farming, line 9. 123easytaxfiling com Form 4835, Farm Rental Income and Expenses, line 7. 123easytaxfiling com 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). 123easytaxfiling com Your gains from sales of draft, breeding, dairy, or sporting livestock shown on Form 4797, Sales of Business Property. 123easytaxfiling com   Wages you receive as a farm employee and wages you receive from a farm corporation are not gross income from farming. 123easytaxfiling com Gross income from fishing. 123easytaxfiling com   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. 123easytaxfiling com   Gross income from fishing includes the following amounts. 123easytaxfiling com Schedule C (Form 1040), Profit or Loss From Business. 123easytaxfiling com Income for services as an officer or crew member of a vessel while the vessel is engaged in fishing. 123easytaxfiling com 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). 123easytaxfiling com Certain taxable interest and punitive damage awards received in connection with the Exxon Valdez litigation. 123easytaxfiling com Income for services normally performed in connection with fishing. 123easytaxfiling com 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. 123easytaxfiling com 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. 123easytaxfiling com For 2013, AGI is the amount shown on Form 1040, line 37; Form 1040A, line 21; and Form 1040EZ, line 4. 123easytaxfiling com Note. 123easytaxfiling com This rule does not apply to farmers and fishermen. 123easytaxfiling com Aliens Resident and nonresident aliens also may have to pay estimated tax. 123easytaxfiling com Resident aliens should follow the rules in this publication, unless noted otherwise. 123easytaxfiling com Nonresident aliens should get Form 1040-ES (NR), U. 123easytaxfiling com S. 123easytaxfiling com Estimated Tax for Nonresident Alien Individuals. 123easytaxfiling com You are an alien if you are not a citizen or national of the United States. 123easytaxfiling com You are a resident alien if you either have a green card or meet the substantial presence test. 123easytaxfiling com For more information about withholding, the substantial presence test, and Form 1040-ES (NR), see Publication 519. 123easytaxfiling com Estates and Trusts Estates and trusts also must pay estimated tax. 123easytaxfiling com 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. 123easytaxfiling com Estates and trusts must use Form 1041-ES, Estimated Income Tax for Estates and Trusts, to figure and pay estimated tax. 123easytaxfiling com 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. 123easytaxfiling com When figuring your 2014 estimated tax, it may be helpful to use your income, deductions, and credits for 2013 as a starting point. 123easytaxfiling com Use your 2013 federal tax return as a guide. 123easytaxfiling com You can use Form 1040-ES to figure your estimated tax. 123easytaxfiling com Nonresident aliens use Form 1040-ES (NR) to figure estimated tax. 123easytaxfiling com You must make adjustments both for changes in your own situation and for recent changes in the tax law. 123easytaxfiling com Some of these changes are discussed under What's New for 2014 , earlier. 123easytaxfiling com For information about these and other changes in the law, visit the IRS website at IRS. 123easytaxfiling com gov. 123easytaxfiling com The instructions for Form 1040-ES include a worksheet to help you figure your estimated tax. 123easytaxfiling com Keep the worksheet for your records. 123easytaxfiling com 2014 Estimated Tax Worksheet Use Worksheet 2-1 to help guide you through the information about completing the 2014 Estimated Tax Worksheet. 123easytaxfiling com You can also find a copy of the worksheet in the Instructions for Form 1040-ES. 123easytaxfiling com Expected AGI—Line 1 Your expected AGI for 2014 (line 1) is your expected total income minus your expected adjustments to income. 123easytaxfiling com Total income. 123easytaxfiling com   Include in your total income all the income you expect to receive during the year, even income that is subject to withholding. 123easytaxfiling com However, do not include income that is tax exempt. 123easytaxfiling com   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. 123easytaxfiling com Social security and railroad retirement benefits. 123easytaxfiling com 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. 123easytaxfiling com Adjustments to income. 123easytaxfiling com   Be sure to subtract from your expected total income all of the adjustments you expect to take on your 2014 tax return. 123easytaxfiling com Self-employed. 123easytaxfiling com 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. 123easytaxfiling com Include the amount from Worksheet 2-3 in your expected adjustments to income. 123easytaxfiling com 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. 123easytaxfiling com 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). 123easytaxfiling com Itemized deductions—line 2. 123easytaxfiling com   If you expect to claim itemized deductions on your 2014 tax return, enter the estimated amount on line 2. 123easytaxfiling com   Itemized deductions are the deductions that can be claimed on Schedule A (Form 1040). 123easytaxfiling com    For 2014, your total itemized deductions may be reduced if your AGI is more than the amount shown next for your filing status. 123easytaxfiling com 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. 123easytaxfiling com Standard deduction—line 2. 123easytaxfiling com   If you expect to claim the standard deduction on your 2014 tax return, enter the amount on line 2. 123easytaxfiling com Use Worksheet 2-4 to figure your standard deduction. 123easytaxfiling com No standard deduction. 123easytaxfiling com   The standard deduction for some individuals is zero. 123easytaxfiling com 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. 123easytaxfiling com Exemptions—line 4. 123easytaxfiling com   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. 123easytaxfiling com 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. 123easytaxfiling com 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. 123easytaxfiling com    For 2014, your deduction for personal exemption is reduced if your AGI is more than the amount shown next for your filing status. 123easytaxfiling com 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. 123easytaxfiling com 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. 123easytaxfiling com Most people will have entries for only a few of these steps. 123easytaxfiling com However, you should check every step to be sure you do not overlook anything. 123easytaxfiling com Step 1. 123easytaxfiling com   Figure your expected income tax (line 6). 123easytaxfiling com Generally, you will use the 2014 Tax Rate Schedules, later, to figure your expected income tax. 123easytaxfiling com   However, see below for situations where you must use a different method to compute your estimated tax. 123easytaxfiling com Tax on child's investment income. 123easytaxfiling com   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. 123easytaxfiling com Children under age 18 at the end of 2014. 123easytaxfiling com The following children if their earned income is not more than half their support. 123easytaxfiling com Children age 18 at the end of 2014. 123easytaxfiling com Children who are full-time students over age 18 and under age 24 at the end of 2014. 123easytaxfiling com See Publication 929, Tax Rules for Children and Dependents. 123easytaxfiling com 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. 123easytaxfiling com Tax on net capital gain. 123easytaxfiling com   The regular income tax rates for individuals do not apply to a net capital gain. 123easytaxfiling com Instead, your net capital gain is taxed at a lower maximum rate. 123easytaxfiling com   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. 123easytaxfiling com Tax on capital gain and qualified dividends. 123easytaxfiling com If the amount on line 1 includes a net capital gain or qualified dividends, use Worksheet 2-7 to figure your tax. 123easytaxfiling com Note. 123easytaxfiling com For 2014, your capital gains and dividends rate will depend on your income. 123easytaxfiling com Tax if excluding foreign earned income or excluding or deducting foreign housing. 123easytaxfiling com 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. 123easytaxfiling com Step 2. 123easytaxfiling com   Total your expected taxes (line 8). 123easytaxfiling com Include on line 8 the sum of the following. 123easytaxfiling com Your tax on line 6. 123easytaxfiling com Your expected alternative minimum tax (AMT) from Form 6251, or included on Form 1040A. 123easytaxfiling com Your expected additional taxes from Form 8814, Parents' Election To Report Child's Interest and Dividends, and Form 4972, Tax on Lump-Sum Distributions. 123easytaxfiling com Any recapture of education credits. 123easytaxfiling com Step 3. 123easytaxfiling com   Subtract your expected credits (line 9). 123easytaxfiling com If you are using your 2013 return as a guide and filed Form 1040, your total credits for 2013 were shown on line 54. 123easytaxfiling com If you filed Form 1040A, your total credits for 2013 were on line 34. 123easytaxfiling com   If your credits on line 9 are more than your taxes on line 8, enter “-0-” on line 10 and go to Step 4. 123easytaxfiling com Step 4. 123easytaxfiling com   Add your expected self-employment tax (line 11). 123easytaxfiling com You already should have figured your self-employment tax (see Self-employed under Expected AGI—Line 1, earlier). 123easytaxfiling com Step 5. 123easytaxfiling com   Add your expected other taxes (line 12). 123easytaxfiling com   Other taxes include the following. 123easytaxfiling com 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. 123easytaxfiling com 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. 123easytaxfiling com Amounts written on Form 1040 on the line for “other taxes” (line 60 on the 2013 Form 1040). 123easytaxfiling com 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. 123easytaxfiling com Repayment of the first-time homebuyer credit. 123easytaxfiling com See Form 5405. 123easytaxfiling com Additional Medicare Tax. 123easytaxfiling com A 0. 123easytaxfiling com 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. 123easytaxfiling com 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. 123easytaxfiling com A self-employment loss should not be considered for purposes of this tax. 123easytaxfiling com RRTA compensation should be separately compared to the threshold. 123easytaxfiling com Your employer is responsible for withholding the 0. 123easytaxfiling com 9% Additional Medicare Tax on Medicare wages or RRTA compensation it pays to you in excess of $200,000 in 2014. 123easytaxfiling com You should consider this withholding, if applicable, in determining whether you need to make an estimated payment. 123easytaxfiling com For more information on Additional Medicare Tax, go to IRS. 123easytaxfiling com gov and enter “Additional Medicare Tax” in the search box. 123easytaxfiling com Net Investment Income Tax (NIIT). 123easytaxfiling com The NIIT is 3. 123easytaxfiling com 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. 123easytaxfiling com 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. 123easytaxfiling com gov and enter “Net Investment Income Tax” in the search box. 123easytaxfiling com Step 6. 123easytaxfiling com   Subtract your refundable credit (line 13b). 123easytaxfiling com   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. 123easytaxfiling com   The result of steps 1 through 6 is your total estimated tax for 2014 (line 13c). 123easytaxfiling com 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. 123easytaxfiling com General rule. 123easytaxfiling com   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. 123easytaxfiling com Your 2013 tax return must cover all 12 months. 123easytaxfiling com Special rules. 123easytaxfiling com   There are special rules for higher income taxpayers and for farmers and fishermen. 123easytaxfiling com Higher income taxpayers. 123easytaxfiling com   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. 123easytaxfiling com This rule does not apply to farmers and fishermen. 123easytaxfiling com For 2013, AGI is the amount shown on Form 1040, line 37; Form 1040A, line 21; and Form 1040EZ, line 4. 123easytaxfiling com Example. 123easytaxfiling com   Jeremy Martin's total tax on his 2013 return was $42,581, and his expected tax for 2014 is $71,253. 123easytaxfiling com His 2013 AGI was $180,000. 123easytaxfiling com Because Jeremy had more than $150,000 of AGI in 2013, he figures his required annual payment as follows. 123easytaxfiling com He determines that 90% of his expected tax for 2014 is $64,128 (. 123easytaxfiling com 90 × $71,253). 123easytaxfiling com Next, he determines that 110% of the tax shown on his 2013 return is $46,839 (1. 123easytaxfiling com 10 x $42,581). 123easytaxfiling com Finally, he determines that his required annual payment is $46,839, the smaller of the two. 123easytaxfiling com Farmers and fishermen. 123easytaxfiling com   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% (. 123easytaxfiling com 6667) of your total tax for 2014, or 100% of the total tax shown on your 2013 return. 123easytaxfiling com (Your 2013 tax return must cover all 12 months. 123easytaxfiling com )   For definitions of “gross income from farming” and “gross income from fishing,” see Farmers and Fishermen , under Special Rules discussed earlier. 123easytaxfiling com Total tax for 2013—line 14b. 123easytaxfiling com   Your 2013 total tax, if you filed Form 1040, is the amount on line 61 reduced by the following. 123easytaxfiling com Unreported social security and Medicare tax or RRTA tax from Forms 4137 or 8919 (line 57). 123easytaxfiling com The following amounts from Form 5329 included on line 58. 123easytaxfiling com Any tax on excess contributions to IRAs, Archer MSAs, Coverdell education savings accounts, and health savings accounts. 123easytaxfiling com Any tax on excess accumulations in qualified retirement plans. 123easytaxfiling com The following write-ins on line 60. 123easytaxfiling com Excise tax on excess golden parachute payments (identified as “EPP”). 123easytaxfiling com Excise tax on insider stock compensation from an expatriated corporation (identified as “ISC”). 123easytaxfiling com Look-back interest due under section 167(g) (identified as “From Form 8866”). 123easytaxfiling com Look-back interest due under section 460(b) (identified as “From Form 8697”). 123easytaxfiling com Recapture of federal mortgage subsidy (identified as “FMSR”). 123easytaxfiling com Additional tax on advance payments of health coverage tax credit when not eligible (identified as “HCTC”). 123easytaxfiling com Uncollected social security and Medicare tax or RRTA tax on tips or group-term life insurance (identified as “UT”). 123easytaxfiling com Any refundable credit amounts. 123easytaxfiling com   If you filed Form 1040A, your 2013 total tax is the amount on line 35 reduced by any refundable credits. 123easytaxfiling com   If you filed Form 1040EZ, your 2013 total tax is the amount on line 10 reduced by the amount on line 8a. 123easytaxfiling com 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. 123easytaxfiling com Subtract your expected withholding from your required annual payment (line 14c). 123easytaxfiling com You usually must pay this difference in four equal installments. 123easytaxfiling com See When To Pay Estimated Tax and How To Figure Each Payment . 123easytaxfiling com 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. 123easytaxfiling com Withholding—line 15. 123easytaxfiling com   Your expected withholding for 2014 (line 15) includes the income tax you expect to be withheld from all sources (wages, pensions and annuities, etc. 123easytaxfiling com ). 123easytaxfiling com It includes excess social security, and tier 1 railroad retirement tax you expect to be withheld from your wages and compensation. 123easytaxfiling com 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. 123easytaxfiling com See Excess Social Security or Railroad Retirement Tax Withholding in chapter 3. 123easytaxfiling com   It also includes Additional Medicare Tax you expect to be withheld from your wages or compensation. 123easytaxfiling com Your employer is responsible for withholding the 0. 123easytaxfiling com 9% Additional Medicare Tax on Medicare wages or RRTA compensation it pays to you in excess of $200,000. 123easytaxfiling com When To Pay Estimated Tax For estimated tax purposes, the year is divided into four payment periods. 123easytaxfiling com Each period has a specific payment due date. 123easytaxfiling com 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. 123easytaxfiling com If a payment is mailed, the date of the U. 123easytaxfiling com S. 123easytaxfiling com postmark is considered the date of payment. 123easytaxfiling com The payment periods and due dates for estimated tax payments are shown next. 123easytaxfiling com For exceptions to the dates listed, see Saturday, Sunday, holiday rule below. 123easytaxfiling com For the period: Due date: Jan. 123easytaxfiling com 11 – March 31 April 15 April 1 – May 31 June 16 June 1 – August 31 September 15 Sept. 123easytaxfiling com 1 – Dec. 123easytaxfiling com 31 January 15  next year2 1If your tax year does not begin on January 1,  see Fiscal year taxpayers . 123easytaxfiling com 2See January payment . 123easytaxfiling com Saturday, Sunday, holiday rule. 123easytaxfiling com   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. 123easytaxfiling com January payment. 123easytaxfiling com   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. 123easytaxfiling com Example. 123easytaxfiling com Janet Adams does not pay any estimated tax for 2014. 123easytaxfiling com She files her 2014 income tax return and pays the balance due shown on her return on January 26, 2015. 123easytaxfiling com Janet's estimated tax for the fourth payment period is considered to have been paid on time. 123easytaxfiling com However, she may owe a penalty for not making the first three estimated tax payments, if required. 123easytaxfiling com Any penalty for not making those payments will be figured up to January 26, 2015. 123easytaxfiling com Fiscal year taxpayers. 123easytaxfiling com   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. 123easytaxfiling com   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. 123easytaxfiling com When To Start You do not have to make estimated tax payments until you have income on which you will owe income tax. 123easytaxfiling com 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. 123easytaxfiling com You have several options when paying estimated taxes. 123easytaxfiling com 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. 123easytaxfiling com If you choose to pay in installments, make your first payment by the due date for the first payment period. 123easytaxfiling com Make your remaining installment payments by the due dates for the later periods. 123easytaxfiling com To avoid any estimated tax penalties, all installments must be paid by their due date and for the required amount. 123easytaxfiling com No income subject to estimated tax during first period. 123easytaxfiling com   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. 123easytaxfiling com 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. 123easytaxfiling com Table 2-1 shows the dates for making installment payments. 123easytaxfiling com    Table 2-1. 123easytaxfiling com 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. 123easytaxfiling com 15     Jan. 123easytaxfiling com 15 next year April 1–May 31 June 16 Sept. 123easytaxfiling com 15     Jan. 123easytaxfiling com 15 next year June 1–Aug. 123easytaxfiling com 31 Sept. 123easytaxfiling com 15 Jan. 123easytaxfiling com 15 next year After Aug. 123easytaxfiling com 31 Jan. 123easytaxfiling com 15 next year (None) *See January payment and Saturday, Sunday, holiday rule . 123easytaxfiling com How much to pay to avoid penalty. 123easytaxfiling com   To determine how much you should pay by each payment due date, see How To Figure Each Payment , later. 123easytaxfiling com 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. 123easytaxfiling com The due dates for the first three payment periods, discussed under When To Pay Estimated Tax , earlier, do not apply to you. 123easytaxfiling com 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. 123easytaxfiling com Fiscal year farmers and fishermen. 123easytaxfiling com   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. 123easytaxfiling com 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. 123easytaxfiling com You should pay enough by each due date to avoid a penalty for that period. 123easytaxfiling com 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. 123easytaxfiling com The penalty is discussed in chapter 4. 123easytaxfiling com 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. 123easytaxfiling com Enter this amount on line 17. 123easytaxfiling com However, use this method only if your income is basically the same throughout the year. 123easytaxfiling com Change in estimated tax. 123easytaxfiling com   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. 123easytaxfiling com 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. 123easytaxfiling com If you do not receive your income evenly throughout the year, your required estimated tax payments may not be the same for each period. 123easytaxfiling com See Annualized Income Installment Method . 123easytaxfiling com Amended estimated tax. 123easytaxfiling com 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. 123easytaxfiling com Example. 123easytaxfiling com Early in 2014, Mira Roberts figures that her estimated tax due is $1,800. 123easytaxfiling com She makes estimated tax payments on April 15 and June 16 of $450 each ($1,800 ÷ 4). 123easytaxfiling com On July 10, she sells investment property at a gain. 123easytaxfiling com Her refigured estimated tax is $4,100. 123easytaxfiling com Her required estimated tax payment for the third payment period is $2,175, as shown in her filled-in Worksheet 2-14. 123easytaxfiling com If Mira's estimated tax does not change again, her required estimated tax payment for the fourth payment period will be $1,025. 123easytaxfiling com Worksheet 2-14. 123easytaxfiling com Amended Estimated Tax Worksheet—Illustrated               1. 123easytaxfiling com Amended total estimated tax due 1. 123easytaxfiling com $4,100 2. 123easytaxfiling com Multiply line 1 by:           50% (. 123easytaxfiling com 50) if next payment is due June 16, 2014           75% (. 123easytaxfiling com 75) if next payment is due September 15,  2014           100% (1. 123easytaxfiling com 00) if next payment is due January 15,  2015 2. 123easytaxfiling com 3,075     3. 123easytaxfiling com Estimated tax payments for all previous periods 3. 123easytaxfiling com 900     4. 123easytaxfiling com 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. 123easytaxfiling com $2,175       Note. 123easytaxfiling com If the payment on line 4 is due January 15, 2015, stop here. 123easytaxfiling com Otherwise, go to line 5. 123easytaxfiling com         5. 123easytaxfiling com Add lines 3 and 4 5. 123easytaxfiling com 3,075 6. 123easytaxfiling com Subtract line 5 from line 1 and enter the result (but not less than zero) 6. 123easytaxfiling com 1,025 7. 123easytaxfiling com 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. 123easytaxfiling com 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. 123easytaxfiling com $1,025 Worksheet 2-14. 123easytaxfiling com Amended Estimated Tax Worksheet—Blank               1. 123easytaxfiling com Amended total estimated tax due 1. 123easytaxfiling com   2. 123easytaxfiling com Multiply line 1 by:           50% (. 123easytaxfiling com 50) if next payment is due June 16, 2014           75% (. 123easytaxfiling com 75) if next payment is due September 15,  2014           100% (1. 123easytaxfiling com 00) if next payment is due January 15,  2015 2. 123easytaxfiling com       3. 123easytaxfiling com Estimated tax payments for all previous periods 3. 123easytaxfiling com       4. 123easytaxfiling com 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. 123easytaxfiling com         Note. 123easytaxfiling com If the payment on line 4 is due January 15, 2015, stop here. 123easytaxfiling com Otherwise, go to line 5. 123easytaxfiling com         5. 123easytaxfiling com Add lines 3 and 4 5. 123easytaxfiling com   6. 123easytaxfiling com Subtract line 5 from line 1 and enter the result (but not less than zero) 6. 123easytaxfiling com   7. 123easytaxfiling com 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. 123easytaxfiling com 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. 123easytaxfiling com   Underpayment penalty. 123easytaxfiling com   The penalty is figured separately for each payment period. 123easytaxfiling com 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. 123easytaxfiling com To see how you may be able to avoid or reduce this penalty, see Annualized Income Installment Method (Schedule AI) in chapter 4. 123easytaxfiling com 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. 123easytaxfiling com 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. 123easytaxfiling com To see whether you can pay less for any period, complete the 2014 Annualized Estimated Tax Worksheet (Worksheet 2-9). 123easytaxfiling com You first must complete the 2014 Estimated Tax Worksheet (Worksheet 2-1) through line 16b. 123easytaxfiling com Use the result you figure on line 32 of Worksheet 2-9 to make your estimated tax payments and complete your payment vouchers. 123easytaxfiling com Note. 123easytaxfiling com If you use the annualized income installment method to figure your estimated tax payments, you must file Form 2210 with your 2014 tax return. 123easytaxfiling com See Annualized Income Installment Method (Schedule AI) in chapter 4 for more information. 123easytaxfiling com Instructions for the 2014 Annualized Estimated Tax Worksheet (Worksheet 2-9) Use Worksheet 2-9 to help you follow these instructions. 123easytaxfiling com 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. 123easytaxfiling com The top of the worksheet shows the dates for each payment period. 123easytaxfiling com The periods build; that is, each period includes all previous periods. 123easytaxfiling com After the end of each payment period, complete the corresponding worksheet column to figure the payment due for that period. 123easytaxfiling com Line 1. 123easytaxfiling com   Enter your AGI for the period. 123easytaxfiling com 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. 123easytaxfiling com See Expected AGI—Line 1 , earlier. 123easytaxfiling com Self-employment income. 123easytaxfiling com   If you had self-employment income, first complete Section B of this worksheet. 123easytaxfiling com Use the amounts on line 43 when figuring your expected AGI to enter in each column of Section A, line 1. 123easytaxfiling com Line 4. 123easytaxfiling com   Be sure to consider all deduction limits figured on Schedule A (Form 1040), such as reducing your medical expenses by 10% (7. 123easytaxfiling com 5% if either you or your spouse was born before January 2, 1950) or reducing certain miscellaneous deductions by 2% of your AGI. 123easytaxfiling com Figure your deduction limits using your expected AGI in the corresponding column of line 1 (2014 Annualized Estimated Tax Worksheet (Worksheet 2-9)). 123easytaxfiling com Line 6. 123easytaxfiling com   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. 123easytaxfiling com In that case, use Worksheet 2-10 to figure the amount to enter on line 6. 123easytaxfiling com Complete Worksheet 2–10 for each period, as necessary. 123easytaxfiling com Line 7. 123easytaxfiling com   If you will not itemize your deductions, use Worksheet 2-4 to figure your standard deduction. 123easytaxfiling com Line 10. 123easytaxfiling com   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. 123easytaxfiling com   In that case, use Worksheet 2-11 to figure the amount to enter on line 10. 123easytaxfiling com Line 12. 123easytaxfiling com   Generally, you will use the Tax Rate Schedules to figure the tax on your annualized income. 123easytaxfiling com However, see below for situations where you must use a different method to compute your estimated tax. 123easytaxfiling com Tax on child's investment income. 123easytaxfiling com   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. 123easytaxfiling com Children under age 18 at the end of 2014. 123easytaxfiling com The following children if their earned income is not more than half their support. 123easytaxfiling com Children age 18 at the end of 2014. 123easytaxfiling com Children who are full-time students over age 18 and under age 24 at the end of 2014. 123easytaxfiling com See Publication 929. 123easytaxfiling com Tax on net capital gain. 123easytaxfiling com   The regular income tax rates for individuals do not apply to a net capital gain. 123easytaxfiling com Instead, your net capital gain is taxed at a lower maximum rate. 123easytaxfiling com   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. 123easytaxfiling com Tax on qualified dividends and capital gains. 123easytaxfiling com   For 2014, your capital gain and dividends rate will depend on your income. 123easytaxfiling com Tax on capital gain or qualified dividends. 123easytaxfiling com 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. 123easytaxfiling com Tax if excluding foreign earned income or excluding or deducting foreign housing. 123easytaxfiling com 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. 123easytaxfiling com Line 13. 123easytaxfiling com   If you file Form 1040, add the tax from Forms 8814, 4972, and 6251 for the period. 123easytaxfiling com If you file Form 1040A, add the amount from the Alternative Minimum Tax Worksheet found in the instructions. 123easytaxfiling com Also include any recapture of an education credit for each period. 123easytaxfiling com 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. 123easytaxfiling com   Use the 2013 forms or worksheets to see if you will owe any of the taxes discussed above. 123easytaxfiling com Figure the tax based on your income and deductions during the period shown in the column headings. 123easytaxfiling com Multiply this amount by the annualization amounts shown for each column on line 2 of the 2014 Annualized Estimated Tax Worksheet (Worksheet 2-9). 123easytaxfiling com Enter the result on line 13 of this worksheet. 123easytaxfiling com Line 15. 123easytaxfiling com   Include all the nonrefundable credits you expect to claim because of events that will occur during the period. 123easytaxfiling com Note. 123easytaxfiling com When figuring your credits for each period, annualize any item of income or deduction to figure each credit. 123easytaxfiling com 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. 123easytaxfiling com Line 18. 123easytaxfiling com   Add your expected other taxes. 123easytaxfiling com   Other taxes include the following. 123easytaxfiling com 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. 123easytaxfiling com 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. 123easytaxfiling com Amounts on Form 1040 written on the line for “other taxes” (line 60 on the 2013 Form 1040). 123easytaxfiling com 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. 123easytaxfiling com Repayment of the first-time homebuyer credit if the home will cease to be your main home in 2014. 123easytaxfiling com See Form 5405 for exceptions. 123easytaxfiling com Additional Medicare Tax. 123easytaxfiling com A 0. 123easytaxfiling com 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. 123easytaxfiling com 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. 123easytaxfiling com A self-employment loss should not be considered for purposes of this tax. 123easytaxfiling com RRTA compensation should be separately compared to the threshold. 123easytaxfiling com Your employer is responsible for withholding the 0. 123easytaxfiling com 9% Additional Medicare Tax on Medicare wages or RRTA compensation it pays you in excess of $200,000 in 2014. 123easytaxfiling com You should consider this withholding, if applicable, in determining whether you need to make an estimated payment. 123easytaxfiling com For more information on Additional Medicare Tax, go to IRS. 123easytaxfiling com gov and enter “Additional Medicare Tax” in the search box. 123easytaxfiling com Net Investment Income Tax (NIIT). 123easytaxfiling com The NIIT is 3. 123easytaxfiling com 8% of the lesser of your net investment income or the excess of your modified adjusted gross income over a specified threshold amount. 123easytaxfiling com 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. 123easytaxfiling com gov and enter “Net Investment Income Tax” in the search box. 123easytaxfiling com Line 20. 123easytaxfiling com   Include all the refundable credits (other than withholding credits) you can claim because of events that occurred during the period. 123easytaxfiling com Note. 123easytaxfiling com When figuring your refundable credits for each period, annualize any item of income or deduction used to figure each credit. 123easytaxfiling com Line 29. 123easytaxfiling com   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. 123easytaxfiling com Line 31. 123easytaxfiling com   For each period, include estimated tax payments made and any excess social security and railroad retirement tax. 123easytaxfiling com   Also include estimated federal income tax withholding. 123easytaxfiling com One-fourth of your estimated withholding is considered withheld on the due date of each payment period. 123easytaxfiling com To figure the amount to include on line 31 for each period, multiply your total expected withholding for 2014 by: 25% (. 123easytaxfiling com 25) for the first period, 50% (. 123easytaxfiling com 50) for the second period, 75% (. 123easytaxfiling com 75) for the third period, and 100% (1. 123easytaxfiling com 00) for the fourth period. 123easytaxfiling com   However, you may choose to include your withholding according to the actual dates on which the amounts will be withheld. 123easytaxfiling com For each period, include withholding made from the beginning of the period up to and including the payment due date. 123easytaxfiling com You can make this choice separately for the taxes withheld from your wages and all other withholding. 123easytaxfiling com For an explanation of what to include in withholding, see Total Estimated Tax Payments Needed—Line 16a , earlier. 123easytaxfiling com Nonresident aliens. 123easytaxfiling com   If you will file Form 1040NR and you do not receive wages as an employee subject to U. 123easytaxfiling com S. 123easytaxfiling com income tax withholding, the instructions for the worksheet are modified as follows. 123easytaxfiling com Skip column (a). 123easytaxfiling com On line 1, enter your income for the period that is effectively connected with a U. 123easytaxfiling com S. 123easytaxfiling com trade or business. 123easytaxfiling com 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. 123easytaxfiling com S. 123easytaxfiling com trade or business by the following. 123easytaxfiling com 72% for column (b). 123easytaxfiling com 45% for column (c). 123easytaxfiling com 30% for column (d). 123easytaxfiling com However, if you can use a treaty rate lower than 30%, use the percentages determined by multiplying your treaty rate by 2. 123easytaxfiling com 4, 1. 123easytaxfiling com 5, and 1, respectively. 123easytaxfiling com 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. 123easytaxfiling com On lines 24 and 27, skip column (b). 123easytaxfiling com 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). 123easytaxfiling com See Publication 519 for more information. 123easytaxfiling com 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. 123easytaxfiling com 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. 123easytaxfiling com How To Pay Estimated Tax There are several ways to pay estimated tax. 123easytaxfiling com Credit an overpayment on your 2013 return to your 2014 estimated tax. 123easytaxfiling com Pay by direct transfer from your bank account, or pay by credit or debit card using a pay-by-phone system or the Internet. 123easytaxfiling com Send in your payment (check or money order) with a payment voucher from Form 1040-ES. 123easytaxfiling com 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. 123easytaxfiling com On Form 1040, or Form 1040A, enter the amount you want credited to your estimated tax rather than refunded. 123easytaxfiling com Take the amount you have credited into account when figuring your estimated tax payments. 123easytaxfiling com If you timely file your 2013 return, treat the credit as a payment made on April 15, 2014. 123easytaxfiling com 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. 123easytaxfiling com 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. 123easytaxfiling com You also cannot use that overpayment in any other way. 123easytaxfiling com Example. 123easytaxfiling com When Kathleen finished filling out her 2013 tax return, she saw that she had overpaid her taxes by $750. 123easytaxfiling com Kathleen knew she would owe additional tax in 2014. 123easytaxfiling com She credited $600 of the overpayment to her 2014 estimated tax and had the remaining $150 refunded to her. 123easytaxfiling com In September, she amended her 2013 return by filing Form 1040X, Amended U. 123easytaxfiling com S. 123easytaxfiling com Individual Income Tax Return. 123easytaxfiling com It turned out that she owed $250 more in tax than she had thought. 123easytaxfiling com This reduced her 2013 overpayment from $750 to $500. 123easytaxfiling com 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. 123easytaxfiling com Kathleen could not use any of the $600 she had credited to her 2014 estimated tax to pay this bill. 123easytaxfiling com Pay Online Paying online is convenient and secure and helps make sure we get your payments on time. 123easytaxfiling com You can make your estimated tax payments online when you e-file or at any time during the year. 123easytaxfiling com You can pay using either of the following electronic payment methods. 123easytaxfiling com Direct transfer from your bank account. 123easytaxfiling com Credit or debit card. 123easytaxfiling com To pay your taxes online or for more information, go to www. 123easytaxfiling com irs. 123easytaxfiling com gov/e-pay. 123easytaxfiling com Pay by Phone Paying by phone is another safe and secure method of paying electronically. 123easytaxfiling com Use one of the following methods. 123easytaxfiling com Direct transfer from your bank account. 123easytaxfiling com Credit or debit card. 123easytaxfiling com 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. 123easytaxfiling com To pay using a credit or debit card, you can call one of the following service providers. 123easytaxfiling com There is a convenience fee charged by these providers that varies by provider, card type, and payment amount. 123easytaxfiling com WorldPay 1-888-9-PAY-TAXTM (1-888-972-9829) www. 123easytaxfiling com payUSAtax. 123easytaxfiling com com Official Payments Corporation 1-888-UPAY-TAXTM (1-888-872-9829) www. 123easytaxfiling com officialpayments. 123easytaxfiling com com Link2GOV Corporation 1-888-PAY-1040TM (1-888-729-1040) www. 123easytaxfiling com PAY1040. 123easytaxfiling com com For the latest details on how to pay by phone, go to www. 123easytaxfiling com irs. 123easytaxfiling com gov/e-pay. 123easytaxfiling com 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. 123easytaxfiling com 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. 123easytaxfiling com Do not use the address shown in the Form 1040 or Form 1040A instructions. 123easytaxfiling com If you did not pay estimated tax last year, get a copy of Form 1040-ES from the IRS (see chapter 5). 123easytaxfiling com Follow the instructions to make sure you use the vouchers correctly. 123easytaxfiling com Joint estimated tax payments. 123easytaxfiling com    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. 123easytaxfiling com Change of address. 123easytaxfiling com    You must notify the IRS if you are making estimated tax payments and you changed your address during the year. 123easytaxfiling com Complete Form 8822, Change of Address, and mail it to the address shown in the instructions for that form. 123easytaxfiling com Worksheets for Chapter 2 Use the following worksheets and tables to figure your correct estimated tax. 123easytaxfiling com IF you need. 123easytaxfiling com . 123easytaxfiling com . 123easytaxfiling com THEN use. 123easytaxfiling com . 123easytaxfiling com . 123easytaxfiling com 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. 123easytaxfiling com Use them only to figure your 2014 estimated taxes. 123easytaxfiling com 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. 123easytaxfiling com 0%   $0 $0 $12,950     10. 123easytaxfiling com 0%   $0 9,075 36,900 $907. 123easytaxfiling com 50 + 15. 123easytaxfiling com 0%   9,075 12,950 49,400 $1,295. 123easytaxfiling com 00 + 15. 123easytaxfiling com 0%   12,950 36,900 89,350 5,081. 123easytaxfiling com 25 + 25. 123easytaxfiling com 0%   36,900 49,400 127,550 6,762. 123easytaxfiling com 50 + 25. 123easytaxfiling com 0%   49,400 89,350 186,350 18,193. 123easytaxfiling com 75 + 28. 123easytaxfiling com 0%   89,350 127,550 206,600 26,300. 123easytaxfiling com 00 + 28. 123easytaxfiling com 0%   127,550 186,350 405,100 45,353. 123easytaxfiling com 75 + 33. 123easytaxfiling com 0%   186,350 206,600 405,100 48,434. 123easytaxfiling com 00 + 33. 123easytaxfiling com 0%   206,600 405,100 406,750 117,541. 123easytaxfiling com 25 + 35. 123easytaxfiling com 0%   405,100 405,100 432,200 113,939. 123easytaxfiling com 00 + 35. 123easytaxfiling com 0%   405,100 406,750 - - - - - - 118,118. 123easytaxfiling com 75 + 39. 123easytaxfiling com 6%   406,750 432,200 - - - - - - 123,424. 123easytaxfiling com 00 + 39. 123easytaxfiling com 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. 123easytaxfiling com 0%   $0 $0 $9,075     10. 123easytaxfiling com 0%   $0 18,150 73,800 $1,815. 123easytaxfiling com 00 + 15. 123easytaxfiling com 0%   18,150 9,075 36,900 $907. 123easytaxfiling com 50 + 15. 123easytaxfiling com 0%   9,075 73,800 148,850 10,162. 123easytaxfiling com 50 + 25. 123easytaxfiling com 0%   73,800 36,900 74,425 5,081. 123easytaxfiling com 25 + 25. 123easytaxfiling com 0%   36,900 148,850 226,850 28,925. 123easytaxfiling com 00 + 28. 123easytaxfiling com 0%   148,850 74,425 113,425 14,462. 123easytaxfiling com 50 + 28. 123easytaxfiling com 0%   74,425 226,850 405,100 50,765. 123easytaxfiling com 00 + 33. 123easytaxfiling com 0%   226,850 113,425 202,550 25,382. 123easytaxfiling com 50 + 33. 123easytaxfiling com 0%   113,425 405,100 457,600 109,587. 123easytaxfiling com 50 + 35. 123easytaxfiling com 0%   405,100 202,550 228,800 54,793. 123easytaxfiling com 75 + 35. 123easytaxfiling com 0%   202,550 457,600 - - - - - - 127,962. 123easytaxfiling com 50 + 39. 123easytaxfiling com 6%   457,600 228,800 - - - - - - 63,981. 123easytaxfiling com 25 + 39. 123easytaxfiling com 6%   228,800                             Worksheet 2-1. 123easytaxfiling com 2014 Estimated Tax Worksheet When this worksheet refers you to instructions, you can find those instructions in the Instructions for 2014 Form 1040-ES. 123easytaxfiling com 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. 123easytaxfiling com  Caution: If line 1 is over $152,525, your deduction may be reduced. 123easytaxfiling com See Worksheet 2-5. 123easytaxfiling com If you do not plan to itemize deductions, enter your standard deduction. 123easytaxfiling com 2     3 Subtract line 2 from line 1 3     4 Exemptions. 123easytaxfiling com Multiply $3,950 by the number of personal exemptions. 123easytaxfiling com  Caution: If line 1 is over $152,525, the amount of your personal exemptions may be limited. 123easytaxfiling com See Worksheet 2-6. 123easytaxfiling com 4     5 Subtract line 4 from line 3 5     6 Tax. 123easytaxfiling com 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. 123easytaxfiling com Add to this amount any other taxes you expect to include in the total on Form 1040, line 44 8     9 Credits (see instructions). 123easytaxfiling com Do not include any income tax withholding on this line 9     10 Subtract line 9 from line 8. 123easytaxfiling com 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. 123easytaxfiling com Subtract line 13b from line 13a. 123easytaxfiling com 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. 123easytaxfiling com 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. 123easytaxfiling com To avoid a penalty, make sure your estimate on line 13c is as accurate as possible. 123easytaxfiling com Even if you pay the required annual payment, you may still owe tax when you file your return. 123easytaxfiling com If you prefer, you can pay the amount shown on line 13c. 123easytaxfiling com                         15 Income tax withheld and estimated to be withheld during 2014 (including income tax withholding on pensions, annuities, certain deferred income, etc. 123easytaxfiling com ) 15     16a Subtract line 15 from line 14c 16a             Is the result zero or less? □ Yes. 123easytaxfiling com Stop here. 123easytaxfiling com You are not required to make estimated tax payments. 123easytaxfiling com  □ No. 123easytaxfiling com Go to line 16b. 123easytaxfiling com             b Subtract line 15 from line 13c 16b             Is the result less than $1,000? □ Yes. 123easytaxfiling com Stop here. 123easytaxfiling com You are not required to make estimated tax payments. 123easytaxfiling com  □ No. 123easytaxfiling com Go to line 17 to figure your required payment. 123easytaxfiling com                         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. 123easytaxfiling com 2014 Estimated Tax Worksheet—Line 1 Estimated Taxable Social Security and Railroad Retirement Benefits Note. 123easytaxfiling com 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. 123easytaxfiling com     1. 123easytaxfiling com Enter your expected social security and railroad retirement benefits 1. 123easytaxfiling com   2. 123easytaxfiling com Enter one-half of line 1 2. 123easytaxfiling com   3. 123easytaxfiling com Enter your expected total income. 123easytaxfiling com Do not include any social security and railroad retirement benefits, nontaxable interest income, nontaxable IRA distributions, or nontaxable pension distributions 3. 123easytaxfiling com   4. 123easytaxfiling com Enter your expected nontaxable interest income 4. 123easytaxfiling com   5. 123easytaxfiling com Enter (as a positive amount) the total of any expected exclusions or deductions for: U. 123easytaxfiling com S. 123easytaxfiling com 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. 123easytaxfiling com   6. 123easytaxfiling com Add lines 2, 3, 4, and 5 6. 123easytaxfiling com   7. 123easytaxfiling com Enter your expected adjustments to income. 123easytaxfiling com Do not include any student loan interest deduction 7. 123easytaxfiling com   8. 123easytaxfiling com Subtract line 7 from line 6. 123easytaxfiling com If zero or less, stop here. 123easytaxfiling com  Note. 123easytaxfiling com 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. 123easytaxfiling com   9. 123easytaxfiling com 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. 123easytaxfiling com   10. 123easytaxfiling com Subtract line 9 from line 8. 123easytaxfiling com If zero or less, stop here. 123easytaxfiling com  Note. 123easytaxfiling com 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. 123easytaxfiling com   11. 123easytaxfiling com 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. 123easytaxfiling com   12. 123easytaxfiling com Subtract line 11 from line 10. 123easytaxfiling com If zero or less, enter -0- 12. 123easytaxfiling com   13. 123easytaxfiling com Enter the smaller of line 10 or line 11 13. 123easytaxfiling com   14. 123easytaxfiling com Enter one-half of line 13 14. 123easytaxfiling com   15