Filing Your Taxes Online is Fast, Easy and Secure.
Start now and receive your tax refund in as little as 7 days.

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

Find tax credits for everything from school tuition to buying a hybri

3. E-File for FREE

E-file free with direct deposit to get your refund in as few as 7 days.

Filing your taxes with paper mail can be difficult and it could take weeks for your refund to arrive. IRS e-file is easy, fast and secure. There is no paperwork going to the IRS so tax refunds can be processed in as little as 7 days with direct deposit. As you prepare your taxes online, you can see your tax refund in real time.

FREE audit support and representation from an enrolled agent – NEW and only from H&R Block

Free E File

Free Tax FormsMilitary Hr BlockTax Form AmendmentAmend 2009 Tax Return Online FreeWww Free1040taxreturn ComHow Many Years Can You File Back TaxesFiling My State Taxes FreeInstructions For Filing An Amended Tax Return2012 Tax Forms 1040ezWhere To File 2012 Tax Return1040x FormTaxact 2012 Free Tax Return2011 E FileIrs 1040xIrs Form 1040x InstructionsFree 1040x Filing Online1040 Form 2012Hr Block TaxFree Turbotax For MilitaryMilitary DiscountsForm 1040x OnlineHow To Amend Tax Return TurbotaxMy1040ezFile 2011 Federal Tax Return1040 2012Irs Efile Form 4868How To File Self Employed Income TaxAmend Tax ReturnsFree Turbotax 20112012 Tax Forms 1040ezFile Free Tax ReturnFree State Taxes FilingAmendment To Tax Return 2013Free Online Tax Filing 2012Beware Amending Tax ReturnsFederal Income Tax Instructions 1040ezElderly Filing Income TaxAmend TaxOnline 1040 EzFiling 2010 Tax Return

Free E File

Free e file 3. Free e file   Savings Incentive Match Plans for Employees (SIMPLE) Table of Contents Introduction What Is a SIMPLE Plan?Eligible Employees How Are Contributions Made? How Much Can Be Contributed on Your Behalf?Matching contributions less than 3%. Free e file Traditional IRA mistakenly moved to SIMPLE IRA. Free e file When Can You Withdraw or Use Assets?Are Distributions Taxable? Introduction This chapter is for employees who need information about savings incentive match plans for employees (SIMPLE plans). Free e file It explains what a SIMPLE plan is, contributions to a SIMPLE plan, and distributions from a SIMPLE plan. Free e file Under a SIMPLE plan, SIMPLE retirement accounts for participating employees can be set up either as: Part of a 401(k) plan, or A plan using IRAs (SIMPLE IRA). Free e file This chapter only discusses the SIMPLE plan rules that relate to SIMPLE IRAs. Free e file See chapter 3 of Publication 560 for information on any special rules for SIMPLE plans that do not use IRAs. Free e file If your employer maintains a SIMPLE plan, you must be notified, in writing, that you can choose the financial institution that will serve as trustee for your SIMPLE IRA and that you can roll over or transfer your SIMPLE IRA to another financial institution. Free e file See Rollovers and Transfers Exception, later under When Can You Withdraw or Use Assets. Free e file What Is a SIMPLE Plan? A SIMPLE plan is a tax-favored retirement plan that certain small employers (including self-employed individuals) can set up for the benefit of their employees. Free e file See chapter 3 of Publication 560 for information on the requirements employers must satisfy to set up a SIMPLE plan. Free e file A SIMPLE plan is a written agreement (salary reduction agreement) between you and your employer that allows you, if you are an eligible employee (including a self-employed individual), to choose to: Reduce your compensation (salary) by a certain percentage each pay period, and Have your employer contribute the salary reductions to a SIMPLE IRA on your behalf. Free e file These contributions are called salary reduction contributions. Free e file All contributions under a SIMPLE IRA plan must be made to SIMPLE IRAs, not to any other type of IRA. Free e file The SIMPLE IRA can be an individual retirement account or an individual retirement annuity, described in chapter 1. Free e file Contributions are made on behalf of eligible employees. Free e file (See Eligible Employees below. Free e file ) Contributions are also subject to various limits. Free e file (See How Much Can Be Contributed on Your Behalf , later. Free e file ) In addition to salary reduction contributions, your employer must make either matching contributions or nonelective contributions. Free e file See How Are Contributions Made , later. Free e file You may be able to claim a credit for contributions to your SIMPLE plan. Free e file For more information, see chapter 4. Free e file Eligible Employees You must be allowed to participate in your employer's SIMPLE plan if you: Received at least $5,000 in compensation from your employer during any 2 years prior to the current year, and Are reasonably expected to receive at least $5,000 in compensation during the calendar year for which contributions are made. Free e file Self-employed individual. Free e file   For SIMPLE plan purposes, the term employee includes a self-employed individual who received earned income. Free e file Excludable employees. Free e file   Your employer can exclude the following employees from participating in the SIMPLE plan. Free e file Employees whose retirement benefits are covered by a collective bargaining agreement (union contract). Free e file Employees who are nonresident aliens and received no earned income from sources within the United States. Free e file Employees who would not have been eligible employees if an acquisition, disposition, or similar transaction had not occurred during the year. Free e file Compensation. Free e file   For purposes of the SIMPLE plan rules, your compensation for a year generally includes the following amounts. Free e file Wages, tips, and other pay from your employer that is subject to income tax withholding. Free e file Deferred amounts elected under any 401(k) plans, 403(b) plans, government (section 457) plans, SEP plans, and SIMPLE plans. Free e file Self-employed individual compensation. Free e file   For purposes of the SIMPLE plan rules, if you are self-employed, your compensation for a year is your net earnings from self-employment (Schedule SE (Form 1040), Section A, line 4, or Section B, line 6) before subtracting any contributions made to a SIMPLE IRA on your behalf. Free e file   For these purposes, net earnings from self-employment include services performed while claiming exemption from self-employment tax as a member of a group conscientiously opposed to social security benefits. Free e file How Are Contributions Made? Contributions under a salary reduction agreement are called salary reduction contributions. Free e file They are made on your behalf by your employer. Free e file Your employer must also make either matching contributions or nonelective contributions. Free e file Salary reduction contributions. Free e file   During the 60-day period before the beginning of any year, and during the 60-day period before you are eligible, you can choose salary reduction contributions expressed either as a percentage of compensation, or as a specific dollar amount (if your employer offers this choice). Free e file You can choose to cancel the election at any time during the year. Free e file   Salary reduction contributions are also referred to as “elective deferrals. Free e file ”   Your employer cannot place restrictions on the contributions amount (such as by limiting the contributions percentage), except to comply with the salary reduction contributions limit, discussed under How Much Can Be Contributed on Your Behalf, later. Free e file Matching contributions. Free e file   Unless your employer chooses to make nonelective contributions, your employer must make contributions equal to the salary reduction contributions you choose (elect), but only up to certain limits. Free e file See How Much Can Be Contributed on Your Behalf below. Free e file These contributions are in addition to the salary reduction contributions and must be made to the SIMPLE IRAs of all eligible employees (defined earlier) who chose salary reductions. Free e file These contributions are referred to as matching contributions. Free e file   Matching contributions on behalf of a self-employed individual are not treated as salary reduction contributions. Free e file Nonelective contributions. Free e file   Instead of making matching contributions, your employer may be able to choose to make nonelective contributions on behalf of all eligible employees. Free e file These nonelective contributions must be made on behalf of each eligible employee who has at least $5,000 of compensation from your employer, whether or not the employee chose salary reductions. Free e file   One of the requirements your employer must satisfy is notifying the employees that the election was made. Free e file For other requirements that your employer must satisfy, see chapter 3 of Publication 560. Free e file How Much Can Be Contributed on Your Behalf? The limits on contributions to a SIMPLE IRA vary with the type of contribution that is made. Free e file Salary reduction contributions limit. Free e file   Salary reduction contributions (employee-chosen contributions or elective deferrals) that your employer can make on your behalf under a SIMPLE plan are limited to $12,000 for 2013. Free e file The limitation remains at $12,000 for 2014. Free e file If you are a participant in any other employer plans during 2013 and you have elective salary reductions or deferred compensation under those plans, the salary reduction contributions under the SIMPLE plan also are included in the annual limit of $17,500 for 2013 on exclusions of salary reductions and other elective deferrals. Free e file You, not your employer, are responsible for monitoring compliance with these limits. Free e file Additional elective deferrals can be contributed to your SIMPLE plan if: You reached age 50 by the end of 2013, and No other elective deferrals can be made for you to the plan for the year because of limits or restrictions, such as the regular annual limit. Free e file The most that can be contributed in additional elective deferrals to your SIMPLE plan is the lesser of the following two amounts. Free e file $2,500 for 2013, or Your compensation for the year reduced by your other elective deferrals for the year. Free e file The additional deferrals are not subject to any other contribution limit and are not taken into account in applying other contribution limits. Free e file The additional deferrals are not subject to the nondiscrimination rules as long as all eligible participants are allowed to make them. Free e file Matching employer contributions limit. Free e file   Generally, your employer must make matching contributions to your SIMPLE IRA in an amount equal to your salary reduction contributions. Free e file These matching contributions cannot be more than 3% of your compensation for the calendar year. Free e file See Matching contributions less than 3% below. Free e file Example 1. Free e file In 2013, Joshua was a participant in his employer's SIMPLE plan. Free e file His compensation, before SIMPLE plan contributions, was $41,600 ($800 per week). Free e file Instead of taking it all in cash, Joshua elected to have 12. Free e file 5% of his weekly pay ($100) contributed to his SIMPLE IRA. Free e file For the full year, Joshua's salary reduction contributions were $5,200, which is less than the $12,000 limit on these contributions. Free e file Under the plan, Joshua's employer was required to make matching contributions to Joshua's SIMPLE IRA. Free e file Because his employer's matching contributions must equal Joshua's salary reductions, but cannot be more than 3% of his compensation (before salary reductions) for the year, his employer's matching contribution was limited to $1,248 (3% of $41,600). Free e file Example 2. Free e file Assume the same facts as in Example 1 , except that Joshua's compensation for the year was $408,163 and he chose to have 2. Free e file 94% of his weekly pay contributed to his SIMPLE IRA. Free e file In this example, Joshua's salary reduction contributions for the year (2. Free e file 94% × $408,163) were equal to the 2013 limit for salary reduction contributions ($12,000). Free e file Because 3% of Joshua's compensation ($12,245) is more than the amount his employer was required to match ($12,000), his employer's matching contributions were limited to $12,000. Free e file In this example, total contributions made on Joshua's behalf for the year were $24,000 ($12,000 (Joshua's contributions) + $12,000 (matching contributions)), the maximum contributions permitted under a SIMPLE IRA for 2013. Free e file Matching contributions less than 3%. Free e file   Your employer can reduce the 3% limit on matching contributions for a calendar year, but only if: The limit is not reduced below 1%, The limit is not reduced for more than 2 years out of the 5-year period that ends with (and includes) the year for which the election is effective, and Employees are notified of the reduced limit within a reasonable period of time before the 60-day election period during which they can enter into salary reduction agreements. Free e file   For purposes of applying the rule in item (2) in determining whether the limit was reduced below 3% for the year, any year before the first year in which your employer (or a former employer) maintains a SIMPLE IRA plan will be treated as a year for which the limit was 3%. Free e file If your employer chooses to make nonelective contributions for a year, that year also will be treated as a year for which the limit was 3%. Free e file Nonelective employer contributions limit. Free e file   If your employer chooses to make nonelective contributions, instead of matching contributions, to each eligible employee's SIMPLE IRA, contributions must be 2% of your compensation for the entire year. Free e file For 2013, only $255,000 of your compensation can be taken into account to figure the contribution limit. Free e file   Your employer can substitute the 2% nonelective contribution for the matching contribution for a year if both of the following requirements are met. Free e file Eligible employees are notified that a 2% nonelective contribution will be made instead of a matching contribution. Free e file This notice is provided within a reasonable period during which employees can enter into salary reduction agreements. Free e file Example 3. Free e file Assume the same facts as in Example 2 , except that Joshua's employer chose to make nonelective contributions instead of matching contributions. Free e file Because his employer's nonelective contributions are limited to 2% of up to $255,000 of Joshua's compensation, his employer's contribution to Joshua's SIMPLE IRA was limited to $5,100. Free e file In this example, total contributions made on Joshua's behalf for the year were $17,100 (Joshua's salary reductions of $12,000 plus his employer's contribution of $5,100). Free e file Traditional IRA mistakenly moved to SIMPLE IRA. Free e file   If you mistakenly roll over or transfer an amount from a traditional IRA to a SIMPLE IRA, you can later recharacterize the amount as a contribution to another traditional IRA. Free e file For more information, see Recharacterizations in chapter 1. Free e file Recharacterizing employer contributions. Free e file   You cannot recharacterize employer contributions (including elective deferrals) under a SEP or SIMPLE plan as contributions to another IRA. Free e file SEPs are discussed in chapter 2 of Publication 560. Free e file SIMPLE plans are discussed in this chapter. Free e file Converting from a SIMPLE IRA. Free e file   Generally, you can convert an amount in your SIMPLE IRA to a Roth IRA under the same rules explained in chapter 1 under Converting From Any Traditional IRA Into a Roth IRA . Free e file    However, you cannot convert any amount distributed from the SIMPLE IRA during the 2-year period beginning on the date you first participated in any SIMPLE IRA plan maintained by your employer. Free e file When Can You Withdraw or Use Assets? Generally, the same distribution (withdrawal) rules that apply to traditional IRAs apply to SIMPLE IRAs. Free e file These rules are discussed in chapter 1. Free e file Your employer cannot restrict you from taking distributions from a SIMPLE IRA. Free e file Are Distributions Taxable? Generally, distributions from a SIMPLE IRA are fully taxable as ordinary income. Free e file If the distribution is an early distribution (discussed in chapter 1), it may be subject to the additional tax on early distributions. Free e file See Additional Tax on Early Distributions, later. Free e file Rollovers and Transfers Exception Generally, rollovers and trustee-to-trustee transfers are not taxable distributions. Free e file Two-year rule. Free e file   To qualify as a tax-free rollover (or a tax-free trustee-to-trustee transfer), a rollover distribution (or a transfer) made from a SIMPLE IRA during the 2-year period beginning on the date on which you first participated in your employer's SIMPLE plan must be contributed (or transferred) to another SIMPLE IRA. Free e file The 2-year period begins on the first day on which contributions made by your employer are deposited in your SIMPLE IRA. Free e file   After the 2-year period, amounts in a SIMPLE IRA can be rolled over or transferred tax free to an IRA other than a SIMPLE IRA, or to a qualified plan, a tax-sheltered annuity plan (section 403(b) plan), or deferred compensation plan of a state or local government (section 457 plan). Free e file Additional Tax on Early Distributions The additional tax on early distributions (discussed in chapter 1) applies to SIMPLE IRAs. Free e file If a distribution is an early distribution and occurs during the 2-year period following the date on which you first participated in your employer's SIMPLE plan, the additional tax on early distributions is increased from 10% to 25%. Free e file If a rollover distribution (or transfer) from a SIMPLE IRA does not satisfy the 2-year rule, and is otherwise an early distribution, the additional tax imposed because of the early distribution is increased from 10% to 25% of the amount distributed. Free e file Prev  Up  Next   Home   More Online Publications
Español

Understand the Requirements

Bankruptcy generally is considered the debt management option of last resort because the results are long lasting and far reaching. The Bankruptcy Abuse and Prevention Act of 2005 established more stringent rules for consumers and attorneys.

The filing process may be difficult for debtors:

  • Debtors must file more documents; including itemized statements of monthly net income, proof of income (pay stubs) for the last 60 days, and tax returns for the preceding year (four years for Chapter 13).
  • Debtors must take a pre-filing credit counseling and post-filing education course to have debts discharged.
  • Debtors face increased filing fees, plus fees for credit counseling/education.
  • The bankruptcy petition and process are more complicated, so it's very difficult to file without an attorney.

The filing process is difficult for lawyers:

  • An attorney's signature on a petition certifies that the attorney has performed a reasonable investigation into the circumstances giving rise to the petition.
  • Attorneys must carefully review documents such as tax returns and pay stubs, as well as ask clients for credit reports.
  • Attorneys are more apprehensive about sanctions.

The Free E File

Free e file 4. Free e file   Underpayment Penalty for 2013 Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: General RuleFarmers and fishermen. Free e file Higher income taxpayers. Free e file Minimum required for higher income taxpayers. Free e file Estate or trust payments of estimated tax. Free e file Lowering or eliminating the penalty. Free e file ExceptionsLess Than $1,000 Due No Tax Liability Last Year Figuring Your Required Annual Payment (Part I) Short Method for Figuring the Penalty (Part III) Regular Method for Figuring the Penalty (Part IV)Figuring Your Underpayment (Part IV, Section A) Worksheet for Form 2210, Part IV, Section B—Figuring the Penalty Annualized Income Installment Method (Schedule AI) Farmers and Fishermen Waiver of PenaltyFarmers and fishermen. Free e file Introduction If you did not pay enough tax, either through withholding or by making timely estimated tax payments, you will have underpaid your estimated tax and may have to pay a penalty. Free e file You may understand this chapter better if you can refer to a copy of your latest federal income tax return. Free e file No penalty. Free e file   Generally, you will not have to pay a penalty for 2013 if any of the following apply. Free e file The total of your withholding and timely estimated tax payments was at least as much as your 2012 tax. Free e file (See Special rules for certain individuals for higher income taxpayers and farmers and fishermen. Free e file ) The tax balance due on your 2013 return is no more than 10% of your total 2013 tax, and you paid all required estimated tax payments on time. Free e file Your total tax for 2013 (defined later) minus your withholding is less than $1,000. Free e file You did not have a tax liability for 2012. Free e file You did not have any withholding taxes and your current year tax (less any household employment taxes) is less than $1,000. Free e file IRS can figure the penalty for you. Free e file   If you think you owe the penalty, but you do not want to figure it yourself when you file your tax return, you may not have to. Free e file Generally, the IRS will figure the penalty for you and send you a bill. Free e file   You only need to figure your penalty in the following three situations. Free e file You are requesting a waiver of part, but not all, of the penalty. Free e file You are using the annualized income installment method to figure the penalty. Free e file You are treating the federal income tax withheld from your income as paid on the dates actually withheld. Free e file However, if these situations do not apply to you, and you think you can lower or eliminate your penalty, complete Form 2210 or Form 2210-F and attach it to your return. Free e file See Form 2210 , later. Free e file Topics - This chapter discusses: The general rule for the underpayment penalty, Special rules for certain individuals, Exceptions to the underpayment penalty, How to figure your underpayment and the amount of your penalty on Form 2210, and How to ask the IRS to waive the penalty. Free e file Useful Items - You may want to see: Form (and Instructions) 2210 Underpayment of Estimated Tax by Individuals, Estates, and Trusts 2210-F Underpayment of Estimated Tax by Farmers and Fishermen See chapter 5 for information about getting these forms. Free e file General Rule In general, you may owe a penalty for 2013 if the total of your withholding and timely estimated tax payments did not equal at least the smaller of: 90% of your 2013 tax, or 100% of your 2012 tax. Free e file (Your 2012 tax return must cover a 12-month period. Free e file ) Your 2013 tax, for this purpose, is defined under Total tax for 2013 , later. Free e file Special rules for certain individuals. Free e file   There are special rules for farmers and fishermen and certain higher income taxpayers. Free e file Farmers and fishermen. Free e file   If at least two-thirds of your gross income for 2012 or 2013 is from farming or fishing, substitute  662/3% for 90% in (1) above. Free e file   See Farmers and Fishermen , later. Free e file Higher income taxpayers. Free e file   If your AGI for 2012 was more than $150,000 ($75,000 if your 2013 filing status is married filing a separate return), substitute 110% for 100% in (2) under General Rule . Free e file This rule does not apply to farmers or fishermen. Free e file   For 2012, AGI is the amount shown on Form 1040, line 37; Form 1040A, line 21; and Form 1040EZ, line 4. Free e file Penalty figured separately for each period. Free e file   Because the penalty is figured separately for each payment period, you may owe a penalty for an earlier payment period even if you later paid enough to make up the underpayment. Free e file This is true even if you are due a refund when you file your income tax return. Free e file Example. Free e file You did not make estimated tax payments for 2013 because you thought you had enough tax withheld from your wages. Free e file Early in January 2014, you made an estimate of your total 2013 tax. Free e file Then you realized that your withholding was $2,000 less than the amount needed to avoid a penalty for underpayment of estimated tax. Free e file On January 10, you made an estimated tax payment of $3,000, which is the difference between your withholding and your estimate of your total tax. Free e file Your final return shows your total tax to be $50 less than your estimate, so you are due a refund. Free e file You do not owe a penalty for your payment due January 15, 2014. Free e file However, you may owe a penalty through January 10, 2014, the day you made the $3,000 payment, for your underpayments for the earlier payment periods. Free e file Minimum required each period. Free e file   You will owe a penalty for any 2013 payment period for which your estimated tax payment plus your withholding for the period and overpayments applied from previous periods was less than the smaller of: 22. Free e file 5% of your 2013 tax, or 25% of your 2012 tax. Free e file (Your 2012 tax return must cover a 12-month period. Free e file ) Minimum required for higher income taxpayers. Free e file   If you are subject to the rule for higher income taxpayers, discussed above, substitute 27. Free e file 5% for 25% in (2) under General Rule . Free e file When penalty is charged. Free e file   If you miss a payment or you paid less than the minimum required in a period, you may be charged an underpayment penalty from the date the amount was due to the date the payment is made. Free e file If a payment is mailed, the date of the U. Free e file S. Free e file postmark is considered the date of payment. Free e file   If a payment is made electronically, the date the payment is shown on your payment account (checking, savings, etc. Free e file ) is considered to be the date of payment. Free e file Estate or trust payments of estimated tax. Free e file   If you have estimated taxes credited to you from an estate or trust (Schedule K-1 (Form 1041)), treat the payment as made by you on January 15, 2014. Free e file Amended returns. Free e file    If you file an amended return by the due date of your original return, use the tax shown on your amended return to figure your required estimated tax payments. Free e file If you file an amended return after the due date of the original return, use the tax shown on the original return. Free e file   However, if you and your spouse file a joint return after the due date to replace separate returns you originally filed by the due date, use the tax shown on the joint return to figure your required estimated tax payments. Free e file This rule applies only if both original separate returns were filed on time. Free e file 2012 separate returns and 2013 joint return. Free e file    If you file a joint return with your spouse for 2013, but you filed separate returns for 2012, your 2012 tax is the total of the tax shown on your separate returns. Free e file You filed a separate return if you filed as single, head of household, or married filing separately. Free e file 2012 joint return and 2013 separate returns. Free e file    If you file a separate return for 2013, but you filed a joint return with your spouse for 2012, your 2012 tax is your share of the tax on the joint return. Free e file You are filing a separate return if you file as single, head of household, or married filing separately. Free e file   To figure your share of the taxes on a joint return, first figure the tax both you and your spouse would have paid had you filed separate returns for 2012 using the same filing status as for 2013. Free e file Then multiply the tax on the joint return by the following fraction. Free e file   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. Free e file Lisa and Paul filed a joint return for 2012 showing taxable income of $49,000 and a tax of $6,484. Free e file Of the $49,000 taxable income, $41,000 was Lisa's and the rest was Paul's. Free e file For 2013, they file married filing separately. Free e file Lisa figures her share of the tax on the 2012 joint return as follows. Free e file 2012 tax on $41,000 based on a separate return $ 6,286 2012 tax on $8,000 based on a  separate return 803 Total $ 7,089 Lisa's percentage of total tax  ($6,286 ÷ $ 7,089) 88. Free e file 67% Lisa's part of tax on joint return ($6,484 × 88. Free e file 67%) $ 5,749 Form 2210. Free e file   In most cases, you do not need to file Form 2210. Free e file The IRS will figure the penalty for you and send you a bill. Free e file If you want us to figure the penalty for you, leave the penalty line on your return blank. Free e file Do not file Form 2210. Free e file   To determine if you should file Form 2210, see Part II of Form 2210. Free e file If you decide to figure your penalty, complete Part I, Part II, and either Part III or Part IV of the form and the Penalty Worksheet in the Instructions for Form 2210. Free e file If you use Form 2210, you cannot file Form 1040EZ. Free e file   On Form 1040, enter the amount of your penalty on line 77. Free e file If you owe tax on line 76, add the penalty to your tax due and show your total payment on line 76. Free e file If you are due a refund, subtract the penalty from the overpayment and enter the result on line 73. Free e file   On Form 1040A, enter the amount of your penalty on line 46. Free e file If you owe tax on line 45, add the penalty to your tax due and show your total payment on line 45. Free e file If you are due a refund, subtract the penalty from the overpayment and enter the result on line 42. Free e file Lowering or eliminating the penalty. Free e file    You may be able to lower or eliminate your penalty if you file Form 2210. Free e file You must file Form 2210 with your return if any of the following applies. Free e file You request a waiver. Free e file See Waiver of Penalty , later. Free e file You use the annualized income installment method. Free e file See the explanation of this method under Annualized Income Installment Method (Schedule AI) . Free e file You use your actual withholding for each payment period for estimated tax purposes. Free e file See Actual withholding method under Figuring Your Underpayment (Part IV, Section A). Free e file You base any of your required installments on the tax shown on your 2012 return and you filed or are filing a joint return for either 2012 or 2013, but not for both years. Free e file Exceptions Generally, you do not have to pay an underpayment penalty if either: Your total tax is less than $1,000, or You had no tax liability last year. Free e file Less Than $1,000 Due You do not owe a penalty if the total tax shown on your return minus the amount you paid through withholding (including excess social security and tier 1 railroad retirement (RRTA) tax withholding) is less than $1,000. Free e file Total tax for 2013. Free e file   For 2013, your total tax on Form 1040 is the amount on line 61 reduced by the following. Free e file    Unreported social security and Medicare tax or RRTA tax from Forms 4137 or 8919 (line 57). Free e file Any tax included on line 58 for excess contributions to IRAs, Archer MSAs, Coverdell education savings accounts, and health savings accounts, or any tax on excess accumulations in qualified retirement plans. Free e file The following write-ins on line 60: Uncollected social security and Medicare tax or RRTA tax on tips or group-term life insurance, Tax on excess golden parachute payments, Excise tax on insider stock compensation from an expatriated corporation, Look-back interest due under section 167(g), Look-back interest due under section 460(b), Recapture of federal mortgage subsidy, and Additional tax on advance payments of health coverage tax credit when not eligible. Free e file Any refundable credit amounts listed on lines 64a, 65, 66, 70, and any credit from Form 8885 included on line 71. Free e file   If you filed Form 1040A, your 2013 total tax is the amount on line 35 reduced by any refundable credits on lines 38a, 39, and 40. Free e file   If you filed Form 1040EZ, your 2013 total tax is the amount on line 10 reduced by the amount on line 8a. Free e file Note. Free e file When figuring the amount on line 60, include household employment taxes only if you had federal income tax withheld from your income or you would owe the penalty even if you did not include those taxes. Free e file Paid through withholding. Free e file    For 2013, the amount you paid through withholding on Form 1040 is the amount on line 62 plus any excess social security or tier 1 RRTA tax withholding on line 69. Free e file Add to that any write-in amount on line 72 identified as “Form 8689. Free e file ” On Form 1040A, the amount you paid through withholding is the amount on line 36 plus any excess social security or tier 1 RRTA tax withholding included on line 41. Free e file On Form 1040EZ, it is the amount on line 7. Free e file No Tax Liability Last Year You do not owe a penalty if you had no tax liability last year and you were a U. Free e file S. Free e file citizen or resident for the whole year. Free e file For this rule to apply, your tax year must have included all 12 months of the year. Free e file You had no tax liability for 2012 if your total tax was zero or you were not required to file an income tax return. Free e file Example. Free e file Ray, who is single and 22 years old, was unemployed for a few months during 2012. Free e file He earned $6,700 in wages before he was laid off, and he received $1,400 in unemployment compensation afterwards. Free e file He had no other income. Free e file Even though he had gross income of $8,100, he did not have to pay income tax because his gross income was less than the filing requirement for a single person under age 65 ($9,750 for 2012). Free e file He filed a return only to have his withheld income tax refunded to him. Free e file In 2013, Ray began regular work as an independent contractor. Free e file Ray made no estimated tax payments in 2013. Free e file Even though he did owe tax at the end of the year, Ray does not owe the underpayment penalty for 2013 because he had no tax liability in 2012. Free e file Total tax for 2012. Free e file   For 2012, your total tax on Form 1040 is the amount on line 61 reduced by the following. Free e file    Unreported social security and Medicare tax or RRTA tax from Forms 4137 or 8919 (line 57). Free e file Any tax included on line 58 for excess contributions to IRAs, Archer MSAs, Coverdell education savings accounts, and health savings accounts, or any tax on excess accumulations in qualified retirement plans. Free e file The following write-ins on line 60: Uncollected social security and Medicare tax or RRTA tax on tips or group-term life insurance, Tax on excess golden parachute payments, Excise tax on insider stock compensation from an expatriated corporation, Look-back interest due under section 167(g), Look-back interest due under section 460(b), Recapture of federal mortgage subsidy, and Additional tax on advance payments of health coverage tax credit when not eligible. Free e file Any refundable credit amounts listed on lines 64a, 65, 66, 70, and credits from Forms 8801 (line 27 only), and 8885 included on line 71. Free e file   If you filed Form 1040A, your 2012 total tax is the amount on line 35 reduced by any refundable credits on lines 38a, 39, and 40. Free e file   If you filed Form 1040EZ, your 2012 total tax is the amount on line 11 reduced by the amount on line 8a. Free e file Figuring Your Required Annual Payment (Part I) Figure your required annual payment in Part I of Form 2210, following the line-by-line instructions. Free e file If you rounded the entries on your tax return to whole dollars, you can round on Form 2210. Free e file Example. Free e file The tax on Lori Lane's 2012 return was $12,400. Free e file Her AGI was not more than $150,000 for either 2012 or 2013. Free e file The tax on her 2013 return (Form 1040, line 55) is $13,044. Free e file Line 56 (self-employment tax) is $8,902. Free e file Her 2013 total tax is $21,946. Free e file For 2013, Lori had $1,600 income tax withheld and made four equal estimated tax payments ($1,000 each). Free e file 90% of her 2013 tax is $19,751. Free e file Because she paid less than her 2012 tax ($12,400) and less than 90% of her 2013 tax ($19,751), and does not meet an exception, Lori knows that she owes a penalty for underpayment of estimated tax. Free e file The IRS will figure the penalty for Lori, but she decides to figure it herself on Form 2210 and pay it with her taxes when she files her tax return. Free e file Lori's required annual payment is $12,400 (100% of 2012 tax) because that is smaller than 90% of her 2013 tax. Free e file Different 2012 filing status. Free e file    If you file a separate return for 2013, but you filed a joint return with your spouse for 2012, see 2012 joint return and 2013 separate returns , earlier, to figure the amount to enter as your 2012 tax on line 8 of Form 2210. Free e file Short Method for Figuring the Penalty (Part III) You may be able to use the short method in Part III of Form 2210 to figure your penalty for underpayment of estimated tax. Free e file If you qualify to use this method, it will result in the same penalty amount as the regular method. Free e file However, either the annualized income installment method or the actual withholding method, explained later, may result in a smaller penalty. Free e file You can use the short method only if you meet one of the following requirements. Free e file You made no estimated tax payments for 2013 (it does not matter whether you had income tax withholding). Free e file You paid the same amount of estimated tax on each of the four payment due dates. Free e file If you do not meet either requirement, figure your penalty using the regular method in Part IV of Form 2210 and the Penalty Worksheet in the instructions. Free e file Note. Free e file If any payment was made before the due date, you can use the short method, but the penalty may be less if you use the regular method. Free e file However, if the payment was only a few days early, the difference is likely to be small. Free e file You cannot use the short method if any of the following apply. Free e file You made any estimated tax payments late. Free e file You checked box C or D in Part II of Form 2210. Free e file You are filing Form 1040NR or 1040NR-EZ and you did not receive wages as an employee subject to U. Free e file S. Free e file income tax withholding. Free e file If you use the short method, you cannot use the annualized income installment method to figure your underpayment for each payment period. Free e file Also, you cannot use your actual withholding during each period to figure your payments for each period. Free e file These methods, which may give you a smaller penalty amount, are explained under Figuring Your Underpayment (Part IV, Section A). Free e file Complete Part III of Form 2210 following the line-by-line instructions in the Instructions for Form 2210. Free e file Regular Method for Figuring the Penalty (Part IV) You can use the regular method in Part IV of Form 2210 to figure your penalty for underpayment of estimated tax if you paid one or more estimated tax payments earlier than the due date. Free e file You must use the regular method in Part IV of Form 2210 to figure your penalty for underpayment of estimated tax if any of the following apply to you. Free e file You paid one or more estimated tax payments on a date after the due date. Free e file You paid at least one, but less than four, installments of estimated tax. Free e file You paid estimated tax payments in un- equal amounts. Free e file You use the annualized income installment method to figure your underpayment for each payment period. Free e file You use your actual withholding during each payment period to figure your payments. Free e file Under the regular method, figure your underpayment for each payment period in Section A, then figure your penalty using the Penalty Worksheet in the Instructions for Form 2210. Free e file Enter the results on line 27 of Section B. Free e file Figuring Your Underpayment (Part IV, Section A) Figure your underpayment of estimated tax for each payment period in Section A following the line-by-line instructions in the Instructions for Form 2210. Free e file Complete lines 20 through 26 of the first column before going to line 20 of the next column. Free e file Required installments—line 18. Free e file   Your required payment for each payment period (line 18) is usually one-fourth of your required annual payment (Part I, line 9). Free e file This method—the regular method—is the one to use if you received your income evenly throughout the year. Free e file   However, if you did not receive your income evenly throughout the year, you may be able to lower or eliminate your penalty by figuring your underpayment using the annualized income installment method. Free e file First complete Schedule AI (Form 2210), then enter the amounts from line 25 of that schedule on line 18 of Form 2210, Part IV. Free e file See Annualized Income Installment Method (Schedule AI), later. Free e file Payments made—line 19. Free e file   Enter in each column the total of: Your estimated tax paid after the due date for the previous column and by the due date shown at the top of the column, and One-fourth of your withholding. Free e file For special rules for figuring your payments, see Form 2210 instructions for line 19. Free e file   If you file Form 1040, your withholding is the amount on line 62, plus any excess social security or tier 1 RRTA tax withholding on line 69. Free e file If you file Form 1040A, your withholding is the amount on line 36 plus any excess social security or tier 1 RRTA tax withholding included in line 41. Free e file Actual withholding method. Free e file    Instead of using one-fourth of your withholding for each quarter, you can choose to use the amounts actually withheld by each due date. Free e file You can make this choice separately for the tax withheld from your wages and for all other withholding. Free e file This includes any excess social security and tier 1 RRTA tax withheld. Free e file   Using your actual withholding may result in a smaller penalty if most of your withholding occurred early in the year. Free e file   If you use your actual withholding, you must check box D in Form 2210, Part II. Free e file Then complete Form 2210 using the regular method (Part IV) and file it with your return. Free e file Worksheet for Form 2210, Part IV, Section B—Figuring the Penalty Figure the amount of your penalty for Section B using the Penalty Worksheet in the Form 2210 instructions. Free e file The penalty is imposed on each underpayment amount shown on Form 2210, Section A, line 25, for the number of days that it remained unpaid. Free e file For 2013, there are four rate periods—April 16 through June 30, July 1 through September 30, October 1 through December 31, and January 1, 2014 through April 15, 2014. Free e file A 3% rate applies to all four periods. Free e file Payments. Free e file    Before completing the Penalty Worksheet, it may be helpful to make a list of the payments you made and income tax withheld after the due date (or the last day payments could be made on time) for the earliest payment period an underpayment occurred. Free e file For example, if you had an underpayment for the first payment period, list your payments after April 15, 2013. Free e file You can use the table in the Form 2210 instructions to make your list. Free e file Follow those instructions for listing income tax withheld and payments made with your return. Free e file Use the list to determine when each underpayment was paid. Free e file   If you mail your estimated tax payments, use the date of the U. Free e file S. Free e file postmark as the date of payment. Free e file Line 1b. Free e file   Apply the payments listed to underpayment balance in the first column until it is fully paid. Free e file Apply payments in the order made. Free e file Figuring the penalty. Free e file   If an underpayment was paid in two or more payments on different dates, you must figure the penalty separately for each payment. Free e file On line 3 of the Penalty Worksheet enter the number of days between the due date (line 2) and the date of each payment on line 1b. Free e file On line 4 figure the penalty for the amount of each payment applied on line 1b or the amount remaining unpaid. Free e file If no payments are applied, figure the penalty on the amount on line 1a. Free e file Aid for counting days. Free e file    Table 4-1 provides a simple method for counting the number of days between a due date and a payment date. Free e file Find the number for the date the payment was due by going across to the column of the month the payment was due and moving down the column to the due date. Free e file In the same manner, find the number for the date the payment was made. Free e file Subtract the due date “number” from the payment date “number. Free e file ”   For example, if a payment was due on June 15 (61), but was not paid until September 1 (139), the payment was 78 (139 – 61) days late. Free e file Table 4-1. Free e file Calendar To Determine the Number of Days a Payment Is Late Instructions. Free e file Use this table with Form 2210 if you are completing Part IV, Section B. Free e file First, find the number for the payment due date by going across to the column of the month the payment was due and moving down the column to the due date. Free e file Then, in the same manner, find the number for the date the payment was made. Free e file Finally, subtract the due date number from the payment date number. Free e file The result is the number of days the payment is late. Free e file Example. Free e file The payment due date is June 15 (61). Free e file The payment was made on November 4 (203). Free e file The payment is 142 days late (203 – 61). Free e file Tax Year 2013 Day of 2013 2013 2013 2013 2013 2013 2013 2013 2013 2014 2014 2014 2014 Month April May June July Aug. Free e file Sept. Free e file Oct. Free e file Nov. Free e file Dec. Free e file Jan. Free e file Feb. Free e file Mar. Free e file Apr. Free e file 1   16 47 77 108 139 169 200 230 261 292 320 351 2   17 48 78 109 140 170 201 231 262 293 321 352 3   18 49 79 110 141 171 202 232 263 294 322 353 4   19 50 80 111 142 172 203 233 264 295 323 354 5   20 51 81 112 143 173 204 234 265 296 324 355 6   21 52 82 113 144 174 205 235 266 297 325 356 7   22 53 83 114 145 175 206 236 267 298 326 357 8   23 54 84 115 146 176 207 237 268 299 327 358 9   24 55 85 116 147 177 208 238 269 300 328 359 10   25 56 86 117 148 178 209 239 270 301 329 360 11   26 57 87 118 149 179 210 240 271 302 330 361 12   27 58 88 119 150 180 211 241 272 303 331 362 13   28 59 89 120 151 181 212 242 273 304 332 363 14   29 60 90 121 152 182 213 243 274 305 333 364 15 0 30 61 91 122 153 183 214 244 275 306 334 365 16 1 31 62 92 123 154 184 215 245 276 307 335   17 2 32 63 93 124 155 185 216 246 277 308 336   18 3 33 64 94 125 156 186 217 247 278 309 337   19 4 34 65 95 126 157 187 218 248 279 310 338   20 5 35 66 96 127 158 188 219 249 280 311 339   21 6 36 67 97 128 159 189 220 250 281 312 340   22 7 37 68 98 129 160 190 221 251 282 313 341   23 8 38 69 99 130 161 191 222 252 283 314 342   24 9 39 70 100 131 162 192 223 253 284 315 343   25 10 40 71 101 132 163 193 224 254 285 316 344   26 11 41 72 102 133 164 194 225 255 286 317 345   27 12 42 73 103 134 165 195 226 256 287 318 346   28 13 43 74 104 135 166 196 227 257 288 319 347   29 14 44 75 105 136 167 197 228 258 289   348   30 15 45 76 106 137 168 198 229 259 290   349   31   46   107 138   199   260 291   350   Annualized Income Installment Method (Schedule AI) If you did not receive your income evenly throughout the year (for example, your income from a shop you operated at a marina was much larger in the summer than it was during the rest of the year), you may be able to lower or eliminate your penalty by figuring your underpayment using the annualized income installment method. Free e file Under this method, your required installment (Part IV, line 18) for one or more payment periods may be less than one-fourth of your required annual payment. Free e file To figure your underpayment using this method, complete Form 2210, Schedule AI. Free e file Schedule AI annualizes your tax at the end of each payment period based on your income, deductions, and other items relating to events that occurred from the beginning of the tax year through the end of the period. Free e file If you use the annualized income installment method, you must check box C in Part II of Form 2210. Free e file Also, you must attach Form 2210 and Schedule AI to your return. Free e file If you use Schedule AI for any payment due date, you must use it for all payment due dates. Free e file Completing Schedule AI. Free e file   Follow the Form 2210 instructions to complete Schedule AI. Free e file For each period shown on Schedule AI, figure your income and deductions based on your method of accounting. Free e file If you use the cash method of accounting (used by most people), include all income actually or constructively received during the period and all deductions actually paid during the period. Free e file Note. Free e file Each period includes amounts from the previous period(s). Free e file Period (a) includes items for January 1 through March 31. Free e file Period (b) includes items for January 1 through May 31. Free e file Period (c) includes items for January 1 through August 31. Free e file Period (d) includes items for the entire year. Free e file Farmers and Fishermen If you are a farmer or fisherman, the following special rules for underpayment of estimated tax apply to you. Free e file The penalty for underpaying your 2013 estimated tax will not apply if you file your return and pay all the tax due by March 3, 2014. Free e file If you are a fiscal year taxpayer, the penalty will not apply if you file your return and pay the tax due by the first day of the third month after the end of your tax year. Free e file Any penalty you owe for underpaying your 2013 estimated tax will be figured from one payment due date, January 15, 2014. Free e file The underpayment penalty for 2013 is figured on the difference between the amount of 2013 withholding plus estimated tax paid by the due date and the smaller of: 662/3% (rather than 90%) of your 2013 tax, or 100% of the tax shown on your 2012 return. Free e file Even if these special rules apply to you, you will not owe the penalty if you meet either of the two conditions discussed under Exceptions . Free e file See Who Must Pay Estimated Tax in chapter 2 for the definition of a farmer or fisherman who is eligible for these special rules. Free e file Form 2210-F. Free e file   Use Form 2210-F to figure any underpayment penalty. Free e file Do not attach it to your return unless you check a box in Part I. Free e file However, if none of the boxes apply to you and you owe a penalty, you do not need to attach Form 2210-F. Free e file Enter the amount from line 16 on Form 1040, line 77 and add the penalty to any balance due on your return or subtract it from your refund. Free e file Keep your filled-in Form 2210-F for your records. Free e file    If none of the boxes on Form 2210-F apply to you and you owe a penalty, the IRS can figure your penalty and send you a bill. Free e file Waiver of Penalty The IRS can waive the penalty for underpayment if either of the following applies. Free e file You did not make a payment because of a casualty, disaster, or other unusual circumstance and it would be inequitable to impose the penalty. Free e file You retired (after reaching age 62) or became disabled in 2012 or 2013 and both the following requirements are met. Free e file You had a reasonable cause for not making the payment. Free e file Your underpayment was not due to willful neglect. Free e file How to request a waiver. Free e file   To request a waiver, see the Instructions for Form 2210. Free e file Farmers and fishermen. Free e file   To request a waiver, see the Instructions for Form 2210-F. Free e file Federally declared disaster. Free e file   Certain estimated tax payment deadlines for taxpayers who reside or have a business in a federally declared disaster area are postponed for a period during and after the disaster. Free e file During the processing of your tax return, the IRS automatically identifies taxpayers located in a covered disaster area (by county or parish) and applies the appropriate penalty relief. Free e file Do not file Form 2210 or 2210-F if your underpayment was due to a federally declared disaster. Free e file If you still owe a penalty after the automatic waiver is applied, we will send you a bill. Free e file   Individuals, estates, and trusts not in a covered disaster area but whose books, records, or tax professionals' offices are in a covered area are also entitled to relief. Free e file Also eligible are relief workers affiliated with a recognized government or charitable organization assisting in the relief activities in a covered disaster area. Free e file If you meet either of these eligibility requirements, you must call the IRS disaster hotline at 1-866-562-5227 and identify yourself as eligible for this relief. Free e file   Details on the applicable disaster postponement period can be found at IRS. Free e file gov. Free e file Enter Tax Relief in Disaster Situations. Free e file Select the federally declared disaster that affected you. Free e file    Worksheet 4-1. Free e file 2013 Form 2210, Schedule AI—Line 12 Qualified Dividends and Capital Gain Tax Worksheet Note. Free e file To figure the annualized entries for lines 2, 3, and 5 below, multiply the expected amount for the period by the  annualization amount on line 2 of Schedule AI for the same period. Free e file                   1. Free e file Enter line 11 of your Schedule AI, or line 3 from Worksheet 4-2 1. Free e file       2. Free e file Enter your annualized qualified dividends for the period 2. Free e file           3. Free e file Are you filing Schedule D?               □ Yes. Free e file Enter the smaller of your annualized amount from line 15 or line 16 of Schedule D. Free e file If either line 15 or line 16 is blank or a loss, enter -0-. Free e file 3. Free e file             □ No. Free e file Enter your annualized capital gain distributions from Form 1040, line 13             4. Free e file Add lines 2 and 3   4. Free e file           5. Free e file If you are claiming investment interest expense on Form 4952, enter your annualized amount from line 4g of that form. Free e file Otherwise, enter -0-   5. Free e file           6. Free e file Subtract line 5 from line 4. Free e file If zero or less, enter -0- 6. Free e file       7. Free e file Subtract line 6 from line 1. Free e file If zero or less, enter -0- 7. Free e file       8. Free e file Enter: $36,900 if single or married filing separately, $73,800 if married filing jointly or qualifying widow(er), $49,400 if head of household. Free e file 8. Free e file       9. Free e file Enter the smaller of line 1 or line 8 9. Free e file       10. Free e file Enter the smaller of line 7 or line 9 10. Free e file       11. Free e file Subtract line 10 from line 9. Free e file This amount is taxed at 0% 11. Free e file       12. Free e file Enter the smaller of line 1 or line 6 12. Free e file       13. Free e file Enter the amount from line 11 13. Free e file       14. Free e file Subtract line 13 from line 12 14. Free e file       15. Free e file Multiply line 14 by 15% (. Free e file 15) 15. Free e file   16. Free e file Figure the tax on the amount on line 7. Free e file If the amount on line 7 is less than $100,000, use the Tax Table in the 2013 Form 1040 instructions to figure this tax. Free e file If the amount on line 7 is $100,000 or more, use the Tax Computation Worksheet in the 2013 Form 1040 instructions 16. Free e file   17. Free e file Add lines 15 and 16 17. Free e file   18. Free e file Figure the tax on the amount on line 1. Free e file If the amount on line 1 is less than $100,000, use the Tax Table in the 2013 Form 1040 instructions to figure this tax. Free e file If the amount on line 1 is $100,000 or more, use the Tax Computation Worksheet in the 2013 Form 1040 instructions 18. Free e file   19. Free e file Tax on all taxable income. Free e file Enter the smaller of line 17 or line 18. Free e file Also enter this amount on line 12 of Schedule AI in the appropriate column. Free e file However, if you are using this worksheet to figure the tax on the amount on line 3 of Worksheet 4-2, enter the amount from line 19 on Worksheet 4-2, line 4 19. Free e file   Worksheet 4-2. Free e file 2013 Form 2210, Schedule AI—Line 12 Foreign Earned Income Tax Worksheet Before you begin:If Schedule AI, line 11, is zero for the period, do not complete this worksheet. Free e file             1. Free e file Enter the amount from line 11 of Schedule AI for the period 1. Free e file   2. Free e file Enter the annualized amount* of foreign earned income and housing amount excluded or deducted (from  Form 2555, lines 45 and 50, or Form 2555-EZ, line 18) in figuring the amount entered for the period on line 1  of Schedule AI 2. Free e file   3. Free e file Add lines 1 and 2 3. Free e file   4. Free e file Tax on the amount on line 3. Free e file Use the Tax Table, Tax Computation Worksheet, Form 8615**, Qualified Dividends and Capital Gain Tax Worksheet***, or Schedule D Tax Worksheet***, whichever applies. Free e file See the 2013 Instructions for Form 1040, line 44, to find out which tax computation method to use. Free e file (Note. Free e file You do not have to use the same method for each period on Schedule AI. Free e file ) 4. Free e file   5. Free e file Tax on the amount on line 2. Free e file If the amount on line 2 is less than $100,000, use the Tax Table in the 2013 Form 1040 instructions to figure this tax. Free e file If the amount on line 7 is $100,000 or more, use the Tax Computation Worksheet in the 2013 Form 1040 instructions 5. Free e file   6. Free e file Subtract line 5 from line 4. Free e file Enter the result here and on line 12 of Schedule AI. Free e file If zero or less,  enter -0- 6. Free e file             * To figure the annualized amount for line 2, multiply the exclusion or deduction for the period by the annualization amount on line 2 of Schedule AI for the same period. Free e file     ** If you use Form 8615 to figure the tax on line 4 above, enter the amount from line 3 above on line 4 of Form 8615. Free e file If the child's parent files Form 2555 or 2555-EZ, enter the amounts from lines 3 and 4 of the parent's Foreign Earned Income Tax Worksheet on lines 6 and 10, respectively, of Form 8615. Free e file Complete the rest of Form 8615 according to its instructions. Free e file Then complete lines 5 and 6 above. Free e file     *** Enter the amount from line 3 above on line 1 of the Qualified Dividends and Capital Gain Tax Worksheet (or Worksheet 4-1 in this chapter) or the Schedule D Tax Worksheet, whichever worksheet you use to figure the tax on line 4 above. Free e file Complete that worksheet through line 6 (line 10 if you use the Schedule D Tax Worksheet). Free e file Next, determine if you have a capital gain excess. Free e file     Figuring capital gain excess. Free e file To find out if you have a capital gain excess for the appropriate period, subtract line 11 of Schedule AI from line 6 of Worksheet 4-1 or your Qualified Dividends and Capital Gain Tax Worksheet (line 10 of your Schedule D Tax Worksheet). Free e file If the result is more than zero, that amount is your capital gain excess. Free e file     No capital gain excess. Free e file If you do not have a capital gain excess, complete the rest of Worksheet 4-1, Qualified Dividends and Capital Gain Tax Worksheet, or the Schedule D Tax Worksheet according to the worksheet's instructions. Free e file Then complete lines 5 and 6 above. Free e file     Capital gain excess. Free e file If you have a capital gain excess, complete a second Worksheet 4-1, Qualified Dividends and Capital Gain Tax Worksheet, or Schedule D Tax Worksheet (whichever applies) as instructed above but in its entirety and with the following additional modifications. Free e file Then complete lines 5 and 6 above. Free e file     Make the modifications below only for purposes of filling out Worksheet 4-2 above. Free e file     a. Free e file Reduce (but not below zero) the amount you otherwise would enter on line 3 of your Worksheet 4-1, line 3 of your Qualified Dividends and Capital Gain Tax Worksheet, or line 9 of your Schedule D Tax Worksheet by your capital gain excess. Free e file     b. Free e file Reduce (but not below zero) the amount you otherwise would enter on line 2 of your Worksheet 4-1, line 2 of your Qualified Dividends and Capital Gain Tax Worksheet, or line 6 of your Schedule D Tax Worksheet by any of your capital gain excess not used in (a) above. Free e file     c. Free e file Reduce (but not below zero) the amount on your Schedule D (Form 1040), line 18, by your capital gain excess. Free e file     d. Free e file Include your capital gain excess as a loss on line 16 of your Unrecaptured Section 1250 Gain Worksheet in the 2013 Instructions for Schedule D (Form 1040). Free e file   Prev  Up  Next   Home   More Online Publications