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How to amend your taxes online 2. How to amend your taxes online   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. How to amend your taxes online This includes income from self-employment, interest, dividends, alimony, rent, gains from the sale of assets, prizes, and awards. How to amend your taxes online 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. How to amend your taxes online 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. How to amend your taxes online 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. How to amend your taxes online 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. How to amend your taxes online For information on when the penalty applies, see chapter 4. How to amend your taxes online 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. How to amend your taxes online 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. How to amend your taxes online 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. How to amend your taxes online Worksheets. How to amend your taxes online   You may need to use several of the blank worksheets included in this chapter. How to amend your taxes online See Worksheets for Chapter 2, later, to locate what you need. How to amend your taxes online 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. How to amend your taxes online To do this, file a new Form W-4 with your employer. How to amend your taxes online See chapter 1. How to amend your taxes online Estimated tax not required. How to amend your taxes online   You do not have to pay estimated tax for 2014 if you meet all three of the following conditions. How to amend your taxes online You had no tax liability for 2013. How to amend your taxes online You were a U. How to amend your taxes online S. How to amend your taxes online citizen or resident alien for the whole year. How to amend your taxes online Your 2013 tax year covered a 12-month period. How to amend your taxes online   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. How to amend your taxes online Please click here for the text description of the image. How to amend your taxes online 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. How to amend your taxes online 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. How to amend your taxes online General Rule In most cases, you must pay estimated tax for 2014 if both of the following apply. How to amend your taxes online You expect to owe at least $1,000 in tax for 2014, after subtracting your withholding and refundable credits. How to amend your taxes online 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. How to amend your taxes online Your 2013 tax return must cover all 12 months. How to amend your taxes online Note. How to amend your taxes online The percentages in (2a) or (2b) above may be different if you are a farmer, fisherman, or higher income taxpayer. How to amend your taxes online See Special Rules , later. How to amend your taxes online 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. How to amend your taxes online Figure 2-A takes you through the general rule. How to amend your taxes online You may find this helpful in determining if you must pay estimated tax. How to amend your taxes online If all your income will be subject to income tax withholding, you probably do not need to pay estimated tax. How to amend your taxes online Example 1. How to amend your taxes online Jane Smart uses Figure 2-A and the following information to figure whether she should pay estimated tax for 2014. How to amend your taxes online She files as head of household claiming her dependent son, takes the standard deduction, and expects no refundable credits for 2014. How to amend your taxes online 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). How to amend your taxes online 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. How to amend your taxes online 50). How to amend your taxes online Jane does not need to pay estimated tax. How to amend your taxes online Example 2. How to amend your taxes online The facts are the same as in Example 1, except that Jane expects only $8,700 tax to be withheld in 2014. How to amend your taxes online Because that is less than $9,913. How to amend your taxes online 50, her answer to box 2a is NO. How to amend your taxes online 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). How to amend your taxes online Jane must increase her withholding or pay estimated tax for 2014. How to amend your taxes online Example 3. How to amend your taxes online The facts are the same as in Example 2, except that the total tax shown on Jane's 2013 return was $8,600. How to amend your taxes online Because she expects to have more than $8,600 withheld in 2014 ($8,700), her answer to box 2b is YES. How to amend your taxes online Jane does not need to pay estimated tax for 2014. How to amend your taxes online Married Taxpayers If you qualify to make joint estimated tax payments, apply the rules discussed here to your joint estimated income. How to amend your taxes online You and your spouse can make joint estimated tax payments even if you are not living together. How to amend your taxes online 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). How to amend your taxes online 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. How to amend your taxes online These individuals can take credit only for the estimated tax payments that he or she made. How to amend your taxes online If you and your spouse cannot make joint estimated tax payments, apply these rules to your separate estimated income. How to amend your taxes online Making joint or separate estimated tax payments will not affect your choice of filing a joint tax return or separate returns for 2014. How to amend your taxes online 2013 separate returns and 2014 joint return. How to amend your taxes online   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. How to amend your taxes online You filed a separate return if you filed as single, head of household, or married filing separately. How to amend your taxes online 2013 joint return and 2014 separate returns. How to amend your taxes online   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. How to amend your taxes online You file a separate return if you file as single, head of household, or married filing separately. How to amend your taxes online   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. How to amend your taxes online Then multiply the tax on the joint return by the following fraction. How to amend your taxes online      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. How to amend your taxes online Joe and Heather filed a joint return for 2013 showing taxable income of $48,500 and a tax of $6,386. How to amend your taxes online Of the $48,500 taxable income, $40,100 was Joe's and the rest was Heather's. How to amend your taxes online For 2014, they plan to file married filing separately. How to amend your taxes online 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. How to amend your taxes online 6% Joe's share of tax on joint return  ($6,386 × 87. How to amend your taxes online 6%) $5,594 Special Rules There are special rules for farmers, fishermen, and certain higher income taxpayers. How to amend your taxes online 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. How to amend your taxes online Gross income. How to amend your taxes online   Your gross income is all income you receive in the form of money, goods, property, and services that is not exempt from tax. How to amend your taxes online 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. How to amend your taxes online Joint returns. How to amend your taxes online   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. How to amend your taxes online Gross income from farming. How to amend your taxes online   This is income from cultivating the soil or raising agricultural commodities. How to amend your taxes online It includes the following amounts. How to amend your taxes online Income from operating a stock, dairy, poultry, bee, fruit, or truck farm. How to amend your taxes online Income from a plantation, ranch, nursery, range, orchard, or oyster bed. How to amend your taxes online Crop shares for the use of your land. How to amend your taxes online Gains from sales of draft, breeding, dairy, or sporting livestock. How to amend your taxes online   For 2013, gross income from farming is the total of the following amounts. How to amend your taxes online Schedule F (Form 1040), Profit or Loss From Farming, line 9. How to amend your taxes online Form 4835, Farm Rental Income and Expenses, line 7. How to amend your taxes online 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). How to amend your taxes online Your gains from sales of draft, breeding, dairy, or sporting livestock shown on Form 4797, Sales of Business Property. How to amend your taxes online   Wages you receive as a farm employee and wages you receive from a farm corporation are not gross income from farming. How to amend your taxes online Gross income from fishing. How to amend your taxes online   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. How to amend your taxes online   Gross income from fishing includes the following amounts. How to amend your taxes online Schedule C (Form 1040), Profit or Loss From Business. How to amend your taxes online Income for services as an officer or crew member of a vessel while the vessel is engaged in fishing. How to amend your taxes online 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). How to amend your taxes online Certain taxable interest and punitive damage awards received in connection with the Exxon Valdez litigation. How to amend your taxes online Income for services normally performed in connection with fishing. How to amend your taxes online 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. How to amend your taxes online 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. How to amend your taxes online For 2013, AGI is the amount shown on Form 1040, line 37; Form 1040A, line 21; and Form 1040EZ, line 4. How to amend your taxes online Note. How to amend your taxes online This rule does not apply to farmers and fishermen. How to amend your taxes online Aliens Resident and nonresident aliens also may have to pay estimated tax. How to amend your taxes online Resident aliens should follow the rules in this publication, unless noted otherwise. How to amend your taxes online Nonresident aliens should get Form 1040-ES (NR), U. How to amend your taxes online S. How to amend your taxes online Estimated Tax for Nonresident Alien Individuals. How to amend your taxes online You are an alien if you are not a citizen or national of the United States. How to amend your taxes online You are a resident alien if you either have a green card or meet the substantial presence test. How to amend your taxes online For more information about withholding, the substantial presence test, and Form 1040-ES (NR), see Publication 519. How to amend your taxes online Estates and Trusts Estates and trusts also must pay estimated tax. How to amend your taxes online 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. How to amend your taxes online Estates and trusts must use Form 1041-ES, Estimated Income Tax for Estates and Trusts, to figure and pay estimated tax. How to amend your taxes online 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. How to amend your taxes online When figuring your 2014 estimated tax, it may be helpful to use your income, deductions, and credits for 2013 as a starting point. How to amend your taxes online Use your 2013 federal tax return as a guide. How to amend your taxes online You can use Form 1040-ES to figure your estimated tax. How to amend your taxes online Nonresident aliens use Form 1040-ES (NR) to figure estimated tax. How to amend your taxes online You must make adjustments both for changes in your own situation and for recent changes in the tax law. How to amend your taxes online Some of these changes are discussed under What's New for 2014 , earlier. How to amend your taxes online For information about these and other changes in the law, visit the IRS website at IRS. How to amend your taxes online gov. How to amend your taxes online The instructions for Form 1040-ES include a worksheet to help you figure your estimated tax. How to amend your taxes online Keep the worksheet for your records. How to amend your taxes online 2014 Estimated Tax Worksheet Use Worksheet 2-1 to help guide you through the information about completing the 2014 Estimated Tax Worksheet. How to amend your taxes online You can also find a copy of the worksheet in the Instructions for Form 1040-ES. How to amend your taxes online Expected AGI—Line 1 Your expected AGI for 2014 (line 1) is your expected total income minus your expected adjustments to income. How to amend your taxes online Total income. How to amend your taxes online   Include in your total income all the income you expect to receive during the year, even income that is subject to withholding. How to amend your taxes online However, do not include income that is tax exempt. How to amend your taxes online   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. How to amend your taxes online Social security and railroad retirement benefits. How to amend your taxes online 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. How to amend your taxes online Adjustments to income. How to amend your taxes online   Be sure to subtract from your expected total income all of the adjustments you expect to take on your 2014 tax return. How to amend your taxes online Self-employed. How to amend your taxes online 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. How to amend your taxes online Include the amount from Worksheet 2-3 in your expected adjustments to income. How to amend your taxes online 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. How to amend your taxes online 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). How to amend your taxes online Itemized deductions—line 2. How to amend your taxes online   If you expect to claim itemized deductions on your 2014 tax return, enter the estimated amount on line 2. How to amend your taxes online   Itemized deductions are the deductions that can be claimed on Schedule A (Form 1040). How to amend your taxes online    For 2014, your total itemized deductions may be reduced if your AGI is more than the amount shown next for your filing status. How to amend your taxes online 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. How to amend your taxes online Standard deduction—line 2. How to amend your taxes online   If you expect to claim the standard deduction on your 2014 tax return, enter the amount on line 2. How to amend your taxes online Use Worksheet 2-4 to figure your standard deduction. How to amend your taxes online No standard deduction. How to amend your taxes online   The standard deduction for some individuals is zero. How to amend your taxes online 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. How to amend your taxes online Exemptions—line 4. How to amend your taxes online   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. How to amend your taxes online 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. How to amend your taxes online 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. How to amend your taxes online    For 2014, your deduction for personal exemption is reduced if your AGI is more than the amount shown next for your filing status. How to amend your taxes online 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. How to amend your taxes online 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. How to amend your taxes online Most people will have entries for only a few of these steps. How to amend your taxes online However, you should check every step to be sure you do not overlook anything. How to amend your taxes online Step 1. How to amend your taxes online   Figure your expected income tax (line 6). How to amend your taxes online Generally, you will use the 2014 Tax Rate Schedules, later, to figure your expected income tax. How to amend your taxes online   However, see below for situations where you must use a different method to compute your estimated tax. How to amend your taxes online Tax on child's investment income. How to amend your taxes online   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. How to amend your taxes online Children under age 18 at the end of 2014. How to amend your taxes online The following children if their earned income is not more than half their support. How to amend your taxes online Children age 18 at the end of 2014. How to amend your taxes online Children who are full-time students over age 18 and under age 24 at the end of 2014. How to amend your taxes online See Publication 929, Tax Rules for Children and Dependents. How to amend your taxes online 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. How to amend your taxes online Tax on net capital gain. How to amend your taxes online   The regular income tax rates for individuals do not apply to a net capital gain. How to amend your taxes online Instead, your net capital gain is taxed at a lower maximum rate. How to amend your taxes online   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. How to amend your taxes online Tax on capital gain and qualified dividends. How to amend your taxes online If the amount on line 1 includes a net capital gain or qualified dividends, use Worksheet 2-7 to figure your tax. How to amend your taxes online Note. How to amend your taxes online For 2014, your capital gains and dividends rate will depend on your income. How to amend your taxes online Tax if excluding foreign earned income or excluding or deducting foreign housing. How to amend your taxes online 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. How to amend your taxes online Step 2. How to amend your taxes online   Total your expected taxes (line 8). How to amend your taxes online Include on line 8 the sum of the following. How to amend your taxes online Your tax on line 6. How to amend your taxes online Your expected alternative minimum tax (AMT) from Form 6251, or included on Form 1040A. How to amend your taxes online Your expected additional taxes from Form 8814, Parents' Election To Report Child's Interest and Dividends, and Form 4972, Tax on Lump-Sum Distributions. How to amend your taxes online Any recapture of education credits. How to amend your taxes online Step 3. How to amend your taxes online   Subtract your expected credits (line 9). How to amend your taxes online If you are using your 2013 return as a guide and filed Form 1040, your total credits for 2013 were shown on line 54. How to amend your taxes online If you filed Form 1040A, your total credits for 2013 were on line 34. How to amend your taxes online   If your credits on line 9 are more than your taxes on line 8, enter “-0-” on line 10 and go to Step 4. How to amend your taxes online Step 4. How to amend your taxes online   Add your expected self-employment tax (line 11). How to amend your taxes online You already should have figured your self-employment tax (see Self-employed under Expected AGI—Line 1, earlier). How to amend your taxes online Step 5. How to amend your taxes online   Add your expected other taxes (line 12). How to amend your taxes online   Other taxes include the following. How to amend your taxes online 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. How to amend your taxes online 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. How to amend your taxes online Amounts written on Form 1040 on the line for “other taxes” (line 60 on the 2013 Form 1040). How to amend your taxes online 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. How to amend your taxes online Repayment of the first-time homebuyer credit. How to amend your taxes online See Form 5405. How to amend your taxes online Additional Medicare Tax. How to amend your taxes online A 0. How to amend your taxes online 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. How to amend your taxes online 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. How to amend your taxes online A self-employment loss should not be considered for purposes of this tax. How to amend your taxes online RRTA compensation should be separately compared to the threshold. How to amend your taxes online Your employer is responsible for withholding the 0. How to amend your taxes online 9% Additional Medicare Tax on Medicare wages or RRTA compensation it pays to you in excess of $200,000 in 2014. How to amend your taxes online You should consider this withholding, if applicable, in determining whether you need to make an estimated payment. How to amend your taxes online For more information on Additional Medicare Tax, go to IRS. How to amend your taxes online gov and enter “Additional Medicare Tax” in the search box. How to amend your taxes online Net Investment Income Tax (NIIT). How to amend your taxes online The NIIT is 3. How to amend your taxes online 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. How to amend your taxes online 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. How to amend your taxes online gov and enter “Net Investment Income Tax” in the search box. How to amend your taxes online Step 6. How to amend your taxes online   Subtract your refundable credit (line 13b). How to amend your taxes online   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. How to amend your taxes online   The result of steps 1 through 6 is your total estimated tax for 2014 (line 13c). How to amend your taxes online 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. How to amend your taxes online General rule. How to amend your taxes online   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. How to amend your taxes online Your 2013 tax return must cover all 12 months. How to amend your taxes online Special rules. How to amend your taxes online   There are special rules for higher income taxpayers and for farmers and fishermen. How to amend your taxes online Higher income taxpayers. How to amend your taxes online   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. How to amend your taxes online This rule does not apply to farmers and fishermen. How to amend your taxes online For 2013, AGI is the amount shown on Form 1040, line 37; Form 1040A, line 21; and Form 1040EZ, line 4. How to amend your taxes online Example. How to amend your taxes online   Jeremy Martin's total tax on his 2013 return was $42,581, and his expected tax for 2014 is $71,253. How to amend your taxes online His 2013 AGI was $180,000. How to amend your taxes online Because Jeremy had more than $150,000 of AGI in 2013, he figures his required annual payment as follows. How to amend your taxes online He determines that 90% of his expected tax for 2014 is $64,128 (. How to amend your taxes online 90 × $71,253). How to amend your taxes online Next, he determines that 110% of the tax shown on his 2013 return is $46,839 (1. How to amend your taxes online 10 x $42,581). How to amend your taxes online Finally, he determines that his required annual payment is $46,839, the smaller of the two. How to amend your taxes online Farmers and fishermen. How to amend your taxes online   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% (. How to amend your taxes online 6667) of your total tax for 2014, or 100% of the total tax shown on your 2013 return. How to amend your taxes online (Your 2013 tax return must cover all 12 months. How to amend your taxes online )   For definitions of “gross income from farming” and “gross income from fishing,” see Farmers and Fishermen , under Special Rules discussed earlier. How to amend your taxes online Total tax for 2013—line 14b. How to amend your taxes online   Your 2013 total tax, if you filed Form 1040, is the amount on line 61 reduced by the following. How to amend your taxes online Unreported social security and Medicare tax or RRTA tax from Forms 4137 or 8919 (line 57). How to amend your taxes online The following amounts from Form 5329 included on line 58. How to amend your taxes online Any tax on excess contributions to IRAs, Archer MSAs, Coverdell education savings accounts, and health savings accounts. How to amend your taxes online Any tax on excess accumulations in qualified retirement plans. How to amend your taxes online The following write-ins on line 60. How to amend your taxes online Excise tax on excess golden parachute payments (identified as “EPP”). How to amend your taxes online Excise tax on insider stock compensation from an expatriated corporation (identified as “ISC”). How to amend your taxes online Look-back interest due under section 167(g) (identified as “From Form 8866”). How to amend your taxes online Look-back interest due under section 460(b) (identified as “From Form 8697”). How to amend your taxes online Recapture of federal mortgage subsidy (identified as “FMSR”). How to amend your taxes online Additional tax on advance payments of health coverage tax credit when not eligible (identified as “HCTC”). How to amend your taxes online Uncollected social security and Medicare tax or RRTA tax on tips or group-term life insurance (identified as “UT”). How to amend your taxes online Any refundable credit amounts. How to amend your taxes online   If you filed Form 1040A, your 2013 total tax is the amount on line 35 reduced by any refundable credits. How to amend your taxes online   If you filed Form 1040EZ, your 2013 total tax is the amount on line 10 reduced by the amount on line 8a. How to amend your taxes online 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. How to amend your taxes online Subtract your expected withholding from your required annual payment (line 14c). How to amend your taxes online You usually must pay this difference in four equal installments. How to amend your taxes online See When To Pay Estimated Tax and How To Figure Each Payment . How to amend your taxes online 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. How to amend your taxes online Withholding—line 15. How to amend your taxes online   Your expected withholding for 2014 (line 15) includes the income tax you expect to be withheld from all sources (wages, pensions and annuities, etc. How to amend your taxes online ). How to amend your taxes online It includes excess social security, and tier 1 railroad retirement tax you expect to be withheld from your wages and compensation. How to amend your taxes online 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. How to amend your taxes online See Excess Social Security or Railroad Retirement Tax Withholding in chapter 3. How to amend your taxes online   It also includes Additional Medicare Tax you expect to be withheld from your wages or compensation. How to amend your taxes online Your employer is responsible for withholding the 0. How to amend your taxes online 9% Additional Medicare Tax on Medicare wages or RRTA compensation it pays to you in excess of $200,000. How to amend your taxes online When To Pay Estimated Tax For estimated tax purposes, the year is divided into four payment periods. How to amend your taxes online Each period has a specific payment due date. How to amend your taxes online 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. How to amend your taxes online If a payment is mailed, the date of the U. How to amend your taxes online S. How to amend your taxes online postmark is considered the date of payment. How to amend your taxes online The payment periods and due dates for estimated tax payments are shown next. How to amend your taxes online For exceptions to the dates listed, see Saturday, Sunday, holiday rule below. How to amend your taxes online For the period: Due date: Jan. How to amend your taxes online 11 – March 31 April 15 April 1 – May 31 June 16 June 1 – August 31 September 15 Sept. How to amend your taxes online 1 – Dec. How to amend your taxes online 31 January 15  next year2 1If your tax year does not begin on January 1,  see Fiscal year taxpayers . How to amend your taxes online 2See January payment . How to amend your taxes online Saturday, Sunday, holiday rule. How to amend your taxes online   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. How to amend your taxes online January payment. How to amend your taxes online   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. How to amend your taxes online Example. How to amend your taxes online Janet Adams does not pay any estimated tax for 2014. How to amend your taxes online She files her 2014 income tax return and pays the balance due shown on her return on January 26, 2015. How to amend your taxes online Janet's estimated tax for the fourth payment period is considered to have been paid on time. How to amend your taxes online However, she may owe a penalty for not making the first three estimated tax payments, if required. How to amend your taxes online Any penalty for not making those payments will be figured up to January 26, 2015. How to amend your taxes online Fiscal year taxpayers. How to amend your taxes online   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. How to amend your taxes online   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. How to amend your taxes online When To Start You do not have to make estimated tax payments until you have income on which you will owe income tax. How to amend your taxes online 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. How to amend your taxes online You have several options when paying estimated taxes. How to amend your taxes online 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. How to amend your taxes online If you choose to pay in installments, make your first payment by the due date for the first payment period. How to amend your taxes online Make your remaining installment payments by the due dates for the later periods. How to amend your taxes online To avoid any estimated tax penalties, all installments must be paid by their due date and for the required amount. How to amend your taxes online No income subject to estimated tax during first period. How to amend your taxes online   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. How to amend your taxes online 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. How to amend your taxes online Table 2-1 shows the dates for making installment payments. How to amend your taxes online    Table 2-1. How to amend your taxes online 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. How to amend your taxes online 15     Jan. How to amend your taxes online 15 next year April 1–May 31 June 16 Sept. How to amend your taxes online 15     Jan. How to amend your taxes online 15 next year June 1–Aug. How to amend your taxes online 31 Sept. How to amend your taxes online 15 Jan. How to amend your taxes online 15 next year After Aug. How to amend your taxes online 31 Jan. How to amend your taxes online 15 next year (None) *See January payment and Saturday, Sunday, holiday rule . How to amend your taxes online How much to pay to avoid penalty. How to amend your taxes online   To determine how much you should pay by each payment due date, see How To Figure Each Payment , later. How to amend your taxes online 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. How to amend your taxes online The due dates for the first three payment periods, discussed under When To Pay Estimated Tax , earlier, do not apply to you. How to amend your taxes online 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. How to amend your taxes online Fiscal year farmers and fishermen. How to amend your taxes online   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. How to amend your taxes online 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. How to amend your taxes online You should pay enough by each due date to avoid a penalty for that period. How to amend your taxes online 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. How to amend your taxes online The penalty is discussed in chapter 4. How to amend your taxes online 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. How to amend your taxes online Enter this amount on line 17. How to amend your taxes online However, use this method only if your income is basically the same throughout the year. How to amend your taxes online Change in estimated tax. How to amend your taxes online   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. How to amend your taxes online 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. How to amend your taxes online If you do not receive your income evenly throughout the year, your required estimated tax payments may not be the same for each period. How to amend your taxes online See Annualized Income Installment Method . How to amend your taxes online Amended estimated tax. How to amend your taxes online 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. How to amend your taxes online Example. How to amend your taxes online Early in 2014, Mira Roberts figures that her estimated tax due is $1,800. How to amend your taxes online She makes estimated tax payments on April 15 and June 16 of $450 each ($1,800 ÷ 4). How to amend your taxes online On July 10, she sells investment property at a gain. How to amend your taxes online Her refigured estimated tax is $4,100. How to amend your taxes online Her required estimated tax payment for the third payment period is $2,175, as shown in her filled-in Worksheet 2-14. How to amend your taxes online If Mira's estimated tax does not change again, her required estimated tax payment for the fourth payment period will be $1,025. How to amend your taxes online Worksheet 2-14. How to amend your taxes online Amended Estimated Tax Worksheet—Illustrated               1. How to amend your taxes online Amended total estimated tax due 1. How to amend your taxes online $4,100 2. How to amend your taxes online Multiply line 1 by:           50% (. How to amend your taxes online 50) if next payment is due June 16, 2014           75% (. How to amend your taxes online 75) if next payment is due September 15,  2014           100% (1. How to amend your taxes online 00) if next payment is due January 15,  2015 2. How to amend your taxes online 3,075     3. How to amend your taxes online Estimated tax payments for all previous periods 3. How to amend your taxes online 900     4. How to amend your taxes online 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. How to amend your taxes online $2,175       Note. How to amend your taxes online If the payment on line 4 is due January 15, 2015, stop here. How to amend your taxes online Otherwise, go to line 5. How to amend your taxes online         5. How to amend your taxes online Add lines 3 and 4 5. How to amend your taxes online 3,075 6. How to amend your taxes online Subtract line 5 from line 1 and enter the result (but not less than zero) 6. How to amend your taxes online 1,025 7. How to amend your taxes online 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. How to amend your taxes online 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. How to amend your taxes online $1,025 Worksheet 2-14. How to amend your taxes online Amended Estimated Tax Worksheet—Blank               1. How to amend your taxes online Amended total estimated tax due 1. How to amend your taxes online   2. How to amend your taxes online Multiply line 1 by:           50% (. How to amend your taxes online 50) if next payment is due June 16, 2014           75% (. How to amend your taxes online 75) if next payment is due September 15,  2014           100% (1. How to amend your taxes online 00) if next payment is due January 15,  2015 2. How to amend your taxes online       3. How to amend your taxes online Estimated tax payments for all previous periods 3. How to amend your taxes online       4. How to amend your taxes online 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. How to amend your taxes online         Note. How to amend your taxes online If the payment on line 4 is due January 15, 2015, stop here. How to amend your taxes online Otherwise, go to line 5. How to amend your taxes online         5. How to amend your taxes online Add lines 3 and 4 5. How to amend your taxes online   6. How to amend your taxes online Subtract line 5 from line 1 and enter the result (but not less than zero) 6. How to amend your taxes online   7. How to amend your taxes online 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. How to amend your taxes online 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. How to amend your taxes online   Underpayment penalty. How to amend your taxes online   The penalty is figured separately for each payment period. How to amend your taxes online 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. How to amend your taxes online To see how you may be able to avoid or reduce this penalty, see Annualized Income Installment Method (Schedule AI) in chapter 4. How to amend your taxes online 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. How to amend your taxes online 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. How to amend your taxes online To see whether you can pay less for any period, complete the 2014 Annualized Estimated Tax Worksheet (Worksheet 2-9). How to amend your taxes online You first must complete the 2014 Estimated Tax Worksheet (Worksheet 2-1) through line 16b. How to amend your taxes online Use the result you figure on line 32 of Worksheet 2-9 to make your estimated tax payments and complete your payment vouchers. How to amend your taxes online Note. How to amend your taxes online If you use the annualized income installment method to figure your estimated tax payments, you must file Form 2210 with your 2014 tax return. How to amend your taxes online See Annualized Income Installment Method (Schedule AI) in chapter 4 for more information. How to amend your taxes online Instructions for the 2014 Annualized Estimated Tax Worksheet (Worksheet 2-9) Use Worksheet 2-9 to help you follow these instructions. How to amend your taxes online 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. How to amend your taxes online The top of the worksheet shows the dates for each payment period. How to amend your taxes online The periods build; that is, each period includes all previous periods. How to amend your taxes online After the end of each payment period, complete the corresponding worksheet column to figure the payment due for that period. How to amend your taxes online Line 1. How to amend your taxes online   Enter your AGI for the period. How to amend your taxes online 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. How to amend your taxes online See Expected AGI—Line 1 , earlier. How to amend your taxes online Self-employment income. How to amend your taxes online   If you had self-employment income, first complete Section B of this worksheet. How to amend your taxes online Use the amounts on line 43 when figuring your expected AGI to enter in each column of Section A, line 1. How to amend your taxes online Line 4. How to amend your taxes online   Be sure to consider all deduction limits figured on Schedule A (Form 1040), such as reducing your medical expenses by 10% (7. How to amend your taxes online 5% if either you or your spouse was born before January 2, 1950) or reducing certain miscellaneous deductions by 2% of your AGI. How to amend your taxes online Figure your deduction limits using your expected AGI in the corresponding column of line 1 (2014 Annualized Estimated Tax Worksheet (Worksheet 2-9)). How to amend your taxes online Line 6. How to amend your taxes online   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. How to amend your taxes online In that case, use Worksheet 2-10 to figure the amount to enter on line 6. How to amend your taxes online Complete Worksheet 2–10 for each period, as necessary. How to amend your taxes online Line 7. How to amend your taxes online   If you will not itemize your deductions, use Worksheet 2-4 to figure your standard deduction. How to amend your taxes online Line 10. How to amend your taxes online   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. How to amend your taxes online   In that case, use Worksheet 2-11 to figure the amount to enter on line 10. How to amend your taxes online Line 12. How to amend your taxes online   Generally, you will use the Tax Rate Schedules to figure the tax on your annualized income. How to amend your taxes online However, see below for situations where you must use a different method to compute your estimated tax. How to amend your taxes online Tax on child's investment income. How to amend your taxes online   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. How to amend your taxes online Children under age 18 at the end of 2014. How to amend your taxes online The following children if their earned income is not more than half their support. How to amend your taxes online Children age 18 at the end of 2014. How to amend your taxes online Children who are full-time students over age 18 and under age 24 at the end of 2014. How to amend your taxes online See Publication 929. How to amend your taxes online Tax on net capital gain. How to amend your taxes online   The regular income tax rates for individuals do not apply to a net capital gain. How to amend your taxes online Instead, your net capital gain is taxed at a lower maximum rate. How to amend your taxes online   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. How to amend your taxes online Tax on qualified dividends and capital gains. How to amend your taxes online   For 2014, your capital gain and dividends rate will depend on your income. How to amend your taxes online Tax on capital gain or qualified dividends. How to amend your taxes online 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. How to amend your taxes online Tax if excluding foreign earned income or excluding or deducting foreign housing. How to amend your taxes online 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. How to amend your taxes online Line 13. How to amend your taxes online   If you file Form 1040, add the tax from Forms 8814, 4972, and 6251 for the period. How to amend your taxes online If you file Form 1040A, add the amount from the Alternative Minimum Tax Worksheet found in the instructions. How to amend your taxes online Also include any recapture of an education credit for each period. How to amend your taxes online 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. How to amend your taxes online   Use the 2013 forms or worksheets to see if you will owe any of the taxes discussed above. How to amend your taxes online Figure the tax based on your income and deductions during the period shown in the column headings. How to amend your taxes online Multiply this amount by the annualization amounts shown for each column on line 2 of the 2014 Annualized Estimated Tax Worksheet (Worksheet 2-9). How to amend your taxes online Enter the result on line 13 of this worksheet. How to amend your taxes online Line 15. How to amend your taxes online   Include all the nonrefundable credits you expect to claim because of events that will occur during the period. How to amend your taxes online Note. How to amend your taxes online When figuring your credits for each period, annualize any item of income or deduction to figure each credit. How to amend your taxes online 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. How to amend your taxes online Line 18. How to amend your taxes online   Add your expected other taxes. How to amend your taxes online   Other taxes include the following. How to amend your taxes online 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. How to amend your taxes online 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. How to amend your taxes online Amounts on Form 1040 written on the line for “other taxes” (line 60 on the 2013 Form 1040). How to amend your taxes online 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. How to amend your taxes online Repayment of the first-time homebuyer credit if the home will cease to be your main home in 2014. How to amend your taxes online See Form 5405 for exceptions. How to amend your taxes online Additional Medicare Tax. How to amend your taxes online A 0. How to amend your taxes online 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. How to amend your taxes online 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. How to amend your taxes online A self-employment loss should not be considered for purposes of this tax. How to amend your taxes online RRTA compensation should be separately compared to the threshold. How to amend your taxes online Your employer is responsible for withholding the 0. How to amend your taxes online 9% Additional Medicare Tax on Medicare wages or RRTA compensation it pays you in excess of $200,000 in 2014. How to amend your taxes online You should consider this withholding, if applicable, in determining whether you need to make an estimated payment. How to amend your taxes online For more information on Additional Medicare Tax, go to IRS. How to amend your taxes online gov and enter “Additional Medicare Tax” in the search box. How to amend your taxes online Net Investment Income Tax (NIIT). How to amend your taxes online The NIIT is 3. How to amend your taxes online 8% of the lesser of your net investment income or the excess of your modified adjusted gross income over a specified threshold amount. How to amend your taxes online 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. How to amend your taxes online gov and enter “Net Investment Income Tax” in the search box. How to amend your taxes online Line 20. How to amend your taxes online   Include all the refundable credits (other than withholding credits) you can claim because of events that occurred during the period. How to amend your taxes online Note. How to amend your taxes online When figuring your refundable credits for each period, annualize any item of income or deduction used to figure each credit. How to amend your taxes online Line 29. How to amend your taxes online   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. How to amend your taxes online Line 31. How to amend your taxes online   For each period, include estimated tax payments made and any excess social security and railroad retirement tax. How to amend your taxes online   Also include estimated federal income tax withholding. How to amend your taxes online One-fourth of your estimated withholding is considered withheld on the due date of each payment period. How to amend your taxes online To figure the amount to include on line 31 for each period, multiply your total expected withholding for 2014 by: 25% (. How to amend your taxes online 25) for the first period, 50% (. How to amend your taxes online 50) for the second period, 75% (. How to amend your taxes online 75) for the third period, and 100% (1. How to amend your taxes online 00) for the fourth period. How to amend your taxes online   However, you may choose to include your withholding according to the actual dates on which the amounts will be withheld. How to amend your taxes online For each period, include withholding made from the beginning of the period up to and including the payment due date. How to amend your taxes online You can make this choice separately for the taxes withheld from your wages and all other withholding. How to amend your taxes online For an explanation of what to include in withholding, see Total Estimated Tax Payments Needed—Line 16a , earlier. How to amend your taxes online Nonresident aliens. How to amend your taxes online   If you will file Form 1040NR and you do not receive wages as an employee subject to U. How to amend your taxes online S. How to amend your taxes online income tax withholding, the instructions for the worksheet are modified as follows. How to amend your taxes online Skip column (a). How to amend your taxes online On line 1, enter your income for the period that is effectively connected with a U. How to amend your taxes online S. How to amend your taxes online trade or business. How to amend your taxes online 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. How to amend your taxes online S. How to amend your taxes online trade or business by the following. How to amend your taxes online 72% for column (b). How to amend your taxes online 45% for column (c). How to amend your taxes online 30% for column (d). How to amend your taxes online However, if you can use a treaty rate lower than 30%, use the percentages determined by multiplying your treaty rate by 2. How to amend your taxes online 4, 1. How to amend your taxes online 5, and 1, respectively. How to amend your taxes online 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. How to amend your taxes online On lines 24 and 27, skip column (b). How to amend your taxes online 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). How to amend your taxes online See Publication 519 for more information. How to amend your taxes online 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. How to amend your taxes online 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. How to amend your taxes online How To Pay Estimated Tax There are several ways to pay estimated tax. How to amend your taxes online Credit an overpayment on your 2013 return to your 2014 estimated tax. How to amend your taxes online Pay by direct transfer from your bank account, or pay by credit or debit card using a pay-by-phone system or the Internet. How to amend your taxes online Send in your payment (check or money order) with a payment voucher from Form 1040-ES. How to amend your taxes online 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. How to amend your taxes online On Form 1040, or Form 1040A, enter the amount you want credited to your estimated tax rather than refunded. How to amend your taxes online Take the amount you have credited into account when figuring your estimated tax payments. How to amend your taxes online If you timely file your 2013 return, treat the credit as a payment made on April 15, 2014. How to amend your taxes online 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. How to amend your taxes online 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. How to amend your taxes online You also cannot use that overpayment in any other way. How to amend your taxes online Example. How to amend your taxes online When Kathleen finished filling out her 2013 tax return, she saw that she had overpaid her taxes by $750. How to amend your taxes online Kathleen knew she would owe additional tax in 2014. How to amend your taxes online She credited $600 of the overpayment to her 2014 estimated tax and had the remaining $150 refunded to her. How to amend your taxes online In September, she amended her 2013 return by filing Form 1040X, Amended U. How to amend your taxes online S. How to amend your taxes online Individual Income Tax Return. How to amend your taxes online It turned out that she owed $250 more in tax than she had thought. How to amend your taxes online This reduced her 2013 overpayment from $750 to $500. How to amend your taxes online 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. How to amend your taxes online Kathleen could not use any of the $600 she had credited to her 2014 estimated tax to pay this bill. How to amend your taxes online Pay Online Paying online is convenient and secure and helps make sure we get your payments on time. How to amend your taxes online You can make your estimated tax payments online when you e-file or at any time during the year. How to amend your taxes online You can pay using either of the following electronic payment methods. How to amend your taxes online Direct transfer from your bank account. How to amend your taxes online Credit or debit card. How to amend your taxes online To pay your taxes online or for more information, go to www. How to amend your taxes online irs. How to amend your taxes online gov/e-pay. How to amend your taxes online Pay by Phone Paying by phone is another safe and secure method of paying electronically. How to amend your taxes online Use one of the following methods. How to amend your taxes online Direct transfer from your bank account. How to amend your taxes online Credit or debit card. How to amend your taxes online 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. How to amend your taxes online To pay using a credit or debit card, you can call one of the following service providers. How to amend your taxes online There is a convenience fee charged by these providers that varies by provider, card type, and payment amount. How to amend your taxes online WorldPay 1-888-9-PAY-TAXTM (1-888-972-9829) www. How to amend your taxes online payUSAtax. How to amend your taxes online com Official Payments Corporation 1-888-UPAY-TAXTM (1-888-872-9829) www. How to amend your taxes online officialpayments. How to amend your taxes online com Link2GOV Corporation 1-888-PAY-1040TM (1-888-729-1040) www. How to amend your taxes online PAY1040. How to amend your taxes online com For the latest details on how to pay by phone, go to www. How to amend your taxes online irs. How to amend your taxes online gov/e-pay. How to amend your taxes online 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. How to amend your taxes online 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. How to amend your taxes online Do not use the address shown in the Form 1040 or Form 1040A instructions. How to amend your taxes online If you did not pay estimated tax last year, get a copy of Form 1040-ES from the IRS (see chapter 5). How to amend your taxes online Follow the instructions to make sure you use the vouchers correctly. How to amend your taxes online Joint estimated tax payments. How to amend your taxes online    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. How to amend your taxes online Change of address. How to amend your taxes online    You must notify the IRS if you are making estimated tax payments and you changed your address during the year. How to amend your taxes online Complete Form 8822, Change of Address, and mail it to the address shown in the instructions for that form. How to amend your taxes online Worksheets for Chapter 2 Use the following worksheets and tables to figure your correct estimated tax. How to amend your taxes online IF you need. How to amend your taxes online . How to amend your taxes online . How to amend your taxes online THEN use. How to amend your taxes online . How to amend your taxes online . How to amend your taxes online 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. How to amend your taxes online Use them only to figure your 2014 estimated taxes. How to amend your taxes online 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. How to amend your taxes online 0%   $0 $0 $12,950     10. How to amend your taxes online 0%   $0 9,075 36,900 $907. How to amend your taxes online 50 + 15. How to amend your taxes online 0%   9,075 12,950 49,400 $1,295. How to amend your taxes online 00 + 15. How to amend your taxes online 0%   12,950 36,900 89,350 5,081. How to amend your taxes online 25 + 25. How to amend your taxes online 0%   36,900 49,400 127,550 6,762. How to amend your taxes online 50 + 25. How to amend your taxes online 0%   49,400 89,350 186,350 18,193. How to amend your taxes online 75 + 28. How to amend your taxes online 0%   89,350 127,550 206,600 26,300. How to amend your taxes online 00 + 28. How to amend your taxes online 0%   127,550 186,350 405,100 45,353. How to amend your taxes online 75 + 33. How to amend your taxes online 0%   186,350 206,600 405,100 48,434. How to amend your taxes online 00 + 33. How to amend your taxes online 0%   206,600 405,100 406,750 117,541. How to amend your taxes online 25 + 35. How to amend your taxes online 0%   405,100 405,100 432,200 113,939. How to amend your taxes online 00 + 35. How to amend your taxes online 0%   405,100 406,750 - - - - - - 118,118. How to amend your taxes online 75 + 39. How to amend your taxes online 6%   406,750 432,200 - - - - - - 123,424. How to amend your taxes online 00 + 39. How to amend your taxes online 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. How to amend your taxes online 0%   $0 $0 $9,075     10. How to amend your taxes online 0%   $0 18,150 73,800 $1,815. How to amend your taxes online 00 + 15. How to amend your taxes online 0%   18,150 9,075 36,900 $907. How to amend your taxes online 50 + 15. How to amend your taxes online 0%   9,075 73,800 148,850 10,162. How to amend your taxes online 50 + 25. How to amend your taxes online 0%   73,800 36,900 74,425 5,081. How to amend your taxes online 25 + 25. How to amend your taxes online 0%   36,900 148,850 226,850 28,925. How to amend your taxes online 00 + 28. How to amend your taxes online 0%   148,850 74,425 113,425 14,462. How to amend your taxes online 50 + 28. How to amend your taxes online 0%   74,425 226,850 405,100 50,765. How to amend your taxes online 00 + 33. How to amend your taxes online 0%   226,850 113,425 202,550 25,382. How to amend your taxes online 50 + 33. How to amend your taxes online 0%   113,425 405,100 457,600 109,587. How to amend your taxes online 50 + 35. How to amend your taxes online 0%   405,100 202,550 228,800 54,793. How to amend your taxes online 75 + 35. How to amend your taxes online 0%   202,550 457,600 - - - - - - 127,962. How to amend your taxes online 50 + 39. How to amend your taxes online 6%   457,600 228,800 - - - - - - 63,981. How to amend your taxes online 25 + 39. How to amend your taxes online 6%   228,800                             Worksheet 2-1. How to amend your taxes online 2014 Estimated Tax Worksheet When this worksheet refers you to instructions, you can find those instructions in the Instructions for 2014 Form 1040-ES. How to amend your taxes online 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. How to amend your taxes online  Caution: If line 1 is over $152,525, your deduction may be reduced. How to amend your taxes online See Worksheet 2-5. How to amend your taxes online If you do not plan to itemize deductions, enter your standard deduction. How to amend your taxes online 2     3 Subtract line 2 from line 1 3     4 Exemptions. How to amend your taxes online Multiply $3,950 by the number of personal exemptions. How to amend your taxes online  Caution: If line 1 is over $152,525, the amount of your personal exemptions may be limited. How to amend your taxes online See Worksheet 2-6. How to amend your taxes online 4     5 Subtract line 4 from line 3 5     6 Tax. How to amend your taxes online 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. How to amend your taxes online Add to this amount any other taxes you expect to include in the total on Form 1040, line 44 8     9 Credits (see instructions). How to amend your taxes online Do not include any income tax withholding on this line 9     10 Subtract line 9 from line 8. How to amend your taxes online 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. How to amend your taxes online Subtract line 13b from line 13a. How to amend your taxes online 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. How to amend your taxes online 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. How to amend your taxes online To avoid a penalty, make sure your estimate on line 13c is as accurate as possible. How to amend your taxes online Even if you pay the required annual payment, you may still owe tax when you file your return. How to amend your taxes online If you prefer, you can pay the amount shown on line 13c. How to amend your taxes online                         15 Income tax withheld and estimated to be withheld during 2014 (including income tax withholding on pensions, annuities, certain deferred income, etc. How to amend your taxes online ) 15     16a Subtract line 15 from line 14c 16a             Is the result zero or less? □ Yes. How to amend your taxes online Stop here. How to amend your taxes online You are not required to make estimated tax payments. How to amend your taxes online  □ No. How to amend your taxes online Go to line 16b. How to amend your taxes online             b Subtract line 15 from line 13c 16b             Is the result less than $1,000? □ Yes. How to amend your taxes online Stop here. How to amend your taxes online You are not required to make estimated tax payments. How to amend your taxes online  □ No. How to amend your taxes online Go to line 17 to figure your required payment. How to amend your taxes online                         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. How to amend your taxes online 2014 Estimated Tax Worksheet—Line 1 Estimated Taxable Social Security and Railroad Retirement Benefits Note. How to amend your taxes online 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. How to amend your taxes online     1. How to amend your taxes online Enter your expected social security and railroad retirement benefits 1. How to amend your taxes online   2. How to amend your taxes online Enter one-half of line 1 2. How to amend your taxes online   3. How to amend your taxes online Enter your expected total income. How to amend your taxes online Do not include any social security and railroad retirement benefits, nontaxable interest income, nontaxable IRA distributions, or nontaxable pension distributions 3. How to amend your taxes online   4. How to amend your taxes online Enter your expected nontaxable interest income 4. How to amend your taxes online   5. How to amend your taxes online Enter (as a positive amount) the total of any expected exclusions or deductions for: U. How to amend your taxes online S. How to amend your taxes online 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. How to amend your taxes online   6. How to amend your taxes online Add lines 2, 3, 4, and 5 6. How to amend your taxes online   7. How to amend your taxes online Enter your expected adjustments to income. How to amend your taxes online Do not include any student loan interest deduction 7. How to amend your taxes online   8. How to amend your taxes online Subtract line 7 from line 6. How to amend your taxes online If zero or less, stop here. How to amend your taxes online  Note. How to amend your taxes online 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. How to amend your taxes online   9. How to amend your taxes online 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. How to amend your taxes online   10. How to amend your taxes online Subtract line 9 from line 8. How to amend your taxes online If zero or less, stop here. How to amend your taxes online  Note. How to amend your taxes online 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. How to amend your taxes online   11. How to amend your taxes online 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. How to amend your taxes online   12. How to amend your taxes online Subtract line 11 from line 10. How to amend your taxes online If zero or less, enter -0- 12. How to amend your taxes online   13. How to amend your taxes online Enter the smaller of line 10 or line 11 13. How to amend your taxes online   14. How to amend your taxes online Enter one-half of line 13 14. How to amend your taxes online   15
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The How To Amend Your Taxes Online

How to amend your taxes online 5. How to amend your taxes online   Soil and Water Conservation Expenses Table of Contents Introduction Topics - This chapter discusses: Business of Farming Plan Certification Conservation ExpensesWater well. How to amend your taxes online Assessment by Conservation DistrictAssessment for Depreciable Property 25% Limit on DeductionNet operating loss. How to amend your taxes online When to Deduct or Capitalize Sale of a Farm Introduction If you are in the business of farming, you can choose to deduct certain expenses for: Soil or water conservation, Prevention of erosion of land used in farming, or Endangered species recovery. How to amend your taxes online Otherwise, these are capital expenses that must be added to the basis of the land. How to amend your taxes online (See chapter 6 for information on determining basis. How to amend your taxes online ) Conservation expenses for land in a foreign country do not qualify for this special treatment. How to amend your taxes online The deduction for conservation expenses cannot be more than 25% of your gross income from farming. How to amend your taxes online See 25% Limit on Deduction , later. How to amend your taxes online Although some expenses are not deductible as soil and water conservation expenses, they may be deductible as ordinary and necessary farm expenses. How to amend your taxes online These include interest and taxes, the cost of periodically clearing brush from productive land, the regular removal of sediment from a drainage ditch, and expenses paid or incurred primarily to produce an agricultural crop that may also conserve soil. How to amend your taxes online You must include in income most government payments for approved conservation practices. How to amend your taxes online However, you can exclude some payments you receive under certain cost-sharing conservation programs. How to amend your taxes online For more information, see Agricultural Program Payments in chapter 3. How to amend your taxes online To get the full deduction to which you are entitled, you should maintain your records to clearly distinguish between your ordinary and necessary farm business expenses and your soil and water conservation expenses. How to amend your taxes online Topics - This chapter discusses: Business of farming Plan certification Conservation expenses Assessment by conservation district 25% limit on deduction When to deduct or capitalize Sale of a farm Business of Farming For purposes of soil and water conservation expenses, you are in the business of farming if you cultivate, operate, or manage a farm for profit, either as an owner or a tenant. How to amend your taxes online You are not in the business of farming if you cultivate or operate a farm for recreation or pleasure, rather than for profit. How to amend your taxes online You are not farming if you are engaged only in forestry or the growing of timber. How to amend your taxes online Farm defined. How to amend your taxes online   A farm includes livestock, dairy, poultry, fish, fruit, and truck farms. How to amend your taxes online It also includes plantations, ranches, ranges, and orchards. How to amend your taxes online A fish farm is an area where fish and other marine animals are grown or raised and artificially fed, protected, etc. How to amend your taxes online It does not include an area where they are merely caught or harvested. How to amend your taxes online A plant nursery is a farm for purposes of deducting soil and water conservation expenses. How to amend your taxes online Farm rental. How to amend your taxes online   If you own a farm and receive farm rental payments based on farm production, either in cash or crop shares, you are in the business of farming. How to amend your taxes online If you get cash rental for a farm you own that is not used in farm production, you cannot deduct soil and water conservation expenses for that farm. How to amend your taxes online   If you receive a fixed rental payment that is not based on farm production, you are in the business of farming only if you materially participate in operating or managing the farm. How to amend your taxes online Example. How to amend your taxes online You own a farm in Iowa and live in California. How to amend your taxes online You rent the farm for $175 in cash per acre and do not materially participate in producing or managing production of the crops grown on the farm. How to amend your taxes online You cannot deduct your soil conservation expenses for this farm. How to amend your taxes online You must capitalize the expenses and add them to the basis of the land. How to amend your taxes online     For more information, see Material participation for landlords under Landlord Participation in Farming in chapter 12. How to amend your taxes online Plan Certification You can deduct soil and water conservation expenses only if they are consistent with a plan approved by the Natural Resources Conservation Service (NRCS) of the Department of Agriculture. How to amend your taxes online If no such plan exists, the expenses must be consistent with a soil conservation plan of a comparable state agency. How to amend your taxes online Keep a copy of the plan with your books and records to support your deductions. How to amend your taxes online Conservation plan. How to amend your taxes online   A conservation plan includes the farming conservation practices approved for the area where your farmland is located. How to amend your taxes online There are three types of approved plans. How to amend your taxes online NRCS individual site plans. How to amend your taxes online These plans are issued individually to farmers who request assistance from NRCS to develop a conservation plan designed specifically for their farmland. How to amend your taxes online NRCS county plans. How to amend your taxes online These plans include a listing of farm conservation practices approved for the county where the farmland is located. How to amend your taxes online You can deduct expenses for conservation practices not included on the NRCS county plans only if the practice is a part of an individual site plan. How to amend your taxes online Comparable state agency plans. How to amend your taxes online These plans are approved by state agencies and can be approved individual site plans or county plans. How to amend your taxes online   A list of NRCS conservation programs is available at www. How to amend your taxes online nrcs. How to amend your taxes online usda. How to amend your taxes online gov/programs. How to amend your taxes online Individual site plans can be obtained from NRCS offices and the comparable state agencies. How to amend your taxes online Conservation Expenses You can deduct conservation expenses only for land you or your tenant are using, or have used in the past, for farming. How to amend your taxes online These expenses include, but are not limited to, the following. How to amend your taxes online The treatment or movement of earth, such as: Leveling, Conditioning, Grading, Terracing, Contour furrowing, and Restoration of soil fertility. How to amend your taxes online The construction, control, and protection of: Diversion channels, Drainage ditches, Irrigation ditches, Earthen dams, and Watercourses, outlets, and ponds. How to amend your taxes online The eradication of brush. How to amend your taxes online The planting of windbreaks. How to amend your taxes online You cannot deduct expenses to drain or fill wetlands, or to prepare land for center pivot irrigation systems, as soil and water conservation expenses. How to amend your taxes online These expenses are added to the basis of the land. How to amend your taxes online If you choose to deduct soil and water conservation expenses, you cannot exclude from gross income any cost-sharing payments you receive for those expenses. How to amend your taxes online See chapter 3 for information about payments eligible for the cost-sharing exclusion. How to amend your taxes online New farm or farmland. How to amend your taxes online   If you acquire a new farm or new farmland from someone who was using it in farming immediately before you acquired the land, soil and water conservation expenses you incur on it will be treated as made on land used in farming at the time the expenses were paid or incurred. How to amend your taxes online You can deduct soil and water conservation expenses for this land if your use of it is substantially a continuation of its use in farming. How to amend your taxes online The new farming activity does not have to be the same as the old farming activity. How to amend your taxes online For example, if you buy land that was used for grazing cattle and then prepare it for use as an apple orchard, you can deduct your conservation expenses. How to amend your taxes online Land not used for farming. How to amend your taxes online   If your conservation expenses benefit both land that does not qualify as land used for farming and land that does qualify, you must allocate the expenses between the two types of land. How to amend your taxes online For example, if the expenses benefit 200 acres of your land, but only 120 acres of this land are used for farming, then you can deduct 60% (120 ÷ 200) of the expenses. How to amend your taxes online You can use another method to allocate these expenses if you can clearly show that your method is more reasonable. How to amend your taxes online Depreciable conservation assets. How to amend your taxes online   You generally cannot deduct your expenses for depreciable conservation assets. How to amend your taxes online However, you can deduct certain amounts you pay or incur for an assessment for depreciable property that a soil and water conservation or drainage district levies against your farm. How to amend your taxes online See Assessment for Depreciable Property , later. How to amend your taxes online   You must capitalize expenses to buy, build, install, or improve depreciable structures or facilities. How to amend your taxes online These expenses include those for materials, supplies, wages, fuel, hauling, and moving dirt when making structures such as tanks, reservoirs, pipes, culverts, canals, dams, wells, or pumps composed of masonry, concrete, tile, metal, or wood. How to amend your taxes online You recover your capital investment through annual allowances for depreciation. How to amend your taxes online   You can deduct soil and water conservation expenses for nondepreciable earthen items. How to amend your taxes online Nondepreciable earthen items include certain dams, ponds, and terraces described under Property Having a Determinable Useful Life in chapter 7. How to amend your taxes online Water well. How to amend your taxes online   You cannot deduct the cost of drilling a water well for irrigation and other agricultural purposes as a soil and water conservation expense. How to amend your taxes online It is a capital expense. How to amend your taxes online You recover your cost through depreciation. How to amend your taxes online You also must capitalize your cost for drilling a test hole. How to amend your taxes online If the test hole produces no water and you continue drilling, the cost of the test hole is added to the cost of the producing well. How to amend your taxes online You can recover the total cost through depreciation deductions. How to amend your taxes online   If a test hole, dry hole, or dried-up well (resulting from prolonged lack of rain, for instance) is abandoned, you can deduct your unrecovered cost in the year of abandonment. How to amend your taxes online Abandonment means that all economic benefits from the well are terminated. How to amend your taxes online For example, filling or sealing a well excavation or casing so that all economic benefits from the well are terminated constitutes an abandonment. How to amend your taxes online Endangered species recovery expenses. How to amend your taxes online   If you are in the business of farming and meet other specific requirements, you can choose to deduct the conservation expenses discussed earlier as endangered species recovery expenses. How to amend your taxes online Otherwise, these are capital expenses that must be added to the basis of the land. How to amend your taxes online   The expenses must be paid or incurred for the purpose of achieving site-specific management actions recommended in a recovery plan approved under section 4(f) of the Endangered Species Act of 1973. How to amend your taxes online See Internal Revenue Code section 175 for more information. How to amend your taxes online Assessment by Conservation District In some localities, a soil or water conservation or drainage district incurs expenses for soil or water conservation and levies an assessment against the farmers who benefit from the expenses. How to amend your taxes online You can deduct as a conservation expense amounts you pay or incur for the part of an assessment that: Covers expenses you could deduct if you had paid them directly, or Covers expenses for depreciable property used in the district's business. How to amend your taxes online Assessment for Depreciable Property You generally can deduct as a conservation expense amounts you pay or incur for the part of a conservation or drainage district assessment that covers expenses for depreciable property. How to amend your taxes online This includes items such as pumps, locks, concrete structures (including dams and weir gates), draglines, and similar equipment. How to amend your taxes online The depreciable property must be used in the district's soil and water conservation activities. How to amend your taxes online However, the following limits apply to these assessments. How to amend your taxes online The total assessment limit. How to amend your taxes online The yearly assessment limit. How to amend your taxes online After you apply these limits, the amount you can deduct is added to your other conservation expenses for the year. How to amend your taxes online The total for these expenses is then subject to the 25% of gross income from farming limit on the deduction, discussed later. How to amend your taxes online See Table 5-1 for a brief summary of these limits. How to amend your taxes online Table 5-1. How to amend your taxes online Limits on Deducting an Assessment by a Conservation District for Depreciable Property Total Limit on Deduction for Assessment for Depreciable Property Yearly Limit on Deduction for Assessment for Depreciable Property Yearly Limit for All Conservation Expenses 10% of: $500 + 10% of: 25% of: Total assessment against all members of the district for the property. How to amend your taxes online Your deductible share of the cost to the district for the property. How to amend your taxes online Your gross income from farming. How to amend your taxes online No one taxpayer can deduct more than 10% of the total assessment. How to amend your taxes online Any amount over 10% is a capital expense and is added to the basis of your land. How to amend your taxes online If an assessment is paid in installments, each payment must be prorated between the conservation expense and the capital expense. How to amend your taxes online If the amount you pay or incur for any year is more than the limit, you can deduct for that year only 10% of your deductible share of the cost. How to amend your taxes online You can deduct the remainder in equal amounts over the next 9 tax years. How to amend your taxes online Limit for all conservation expenses, including assessments for depreciable property. How to amend your taxes online Amounts greater than 25% can be carried to the following year and added to that year's expenses. How to amend your taxes online The total is then subject to the 25% of gross income from farming limit in that year. How to amend your taxes online To ensure your deduction is within the deduction limits, keep records to show the following. How to amend your taxes online The total assessment against all members of the district for the depreciable property. How to amend your taxes online Your deductible share of the cost to the district for the depreciable property. How to amend your taxes online Your gross income from farming. How to amend your taxes online Total assessment limit. How to amend your taxes online   You cannot deduct more than 10% of the total amount assessed to all members of the conservation or drainage district for the depreciable property. How to amend your taxes online This applies whether you pay the assessment in one payment or in installments. How to amend your taxes online If your assessment is more than 10% of the total amount assessed, both the following rules apply. How to amend your taxes online The amount over 10% is a capital expense and is added to the basis of your land. How to amend your taxes online If the assessment is paid in installments, each payment must be prorated between the conservation expense and the capital expense. How to amend your taxes online Yearly assessment limit. How to amend your taxes online   The maximum amount you can deduct in any one year is the total of 10% of your deductible share of the cost as explained earlier, plus $500. How to amend your taxes online If the amount you pay or incur is equal to or less than the maximum amount, you can deduct it in the year it is paid or incurred. How to amend your taxes online If the amount you pay or incur is more, you can deduct in that year only 10% of your deductible share of the cost. How to amend your taxes online You can deduct the remainder in equal amounts over the next 9 tax years. How to amend your taxes online Your total conservation expense deduction for each year is also subject to the 25% of gross income from farming limit on the deduction, discussed later. How to amend your taxes online Example 1. How to amend your taxes online This year, the soil conservation district levies and you pay an assessment of $2,400 against your farm. How to amend your taxes online Of the assessment, $1,500 is for digging drainage ditches. How to amend your taxes online You can deduct this part as a soil or conservation expense as if you had paid it directly. How to amend your taxes online The remaining $900 is for depreciable equipment to be used in the district's irrigation activities. How to amend your taxes online The total amount assessed by the district against all its members for the depreciable equipment is $7,000. How to amend your taxes online The total amount you can deduct for the depreciable equipment is limited to 10% of the total amount assessed by the district against all its members for depreciable equipment, or $700. How to amend your taxes online The $200 excess ($900 − $700) is a capital expense you must add to the basis of your farm. How to amend your taxes online To figure the maximum amount you can deduct for the depreciable equipment this year, multiply your deductible share of the total assessment ($700) by 10%. How to amend your taxes online Add $500 to the result for a total of $570. How to amend your taxes online Your deductible share, $700, is greater than the maximum amount deductible in one year, so you can deduct only $70 of the amount you paid or incurred for depreciable property this year (10% of $700). How to amend your taxes online You can deduct the balance at the rate of $70 a year over the next 9 years. How to amend your taxes online You add $70 to the $1,500 portion of the assessment for drainage ditches. How to amend your taxes online You can deduct $1,570 of the $2,400 assessment as a soil and water conservation expense this year, subject to the 25% of gross income from farming limit on the deduction, discussed later. How to amend your taxes online Example 2. How to amend your taxes online Assume the same facts in Example 1 except that $1,850 of the $2,400 assessment is for digging drainage ditches and $550 is for depreciable equipment. How to amend your taxes online The total amount assessed by the district against all its members for depreciable equipment is $5,500. How to amend your taxes online The total amount you can deduct for the depreciable equipment is limited to 10% of this amount, or $550. How to amend your taxes online The maximum amount you can deduct this year for the depreciable equipment is $555 (10% of your deductible share of the total assessment, $55, plus $500). How to amend your taxes online Since your deductible share is less than the maximum amount deductible in one year, you can deduct the entire $550 this year. How to amend your taxes online You can deduct the entire assessment, $2,400, as a soil and water conservation expense this year, subject to the 25% of gross income from farming limit on the deduction, discussed below. How to amend your taxes online Sale or other disposal of land during 9-year period. How to amend your taxes online   If you dispose of the land during the 9-year period for deducting conservation expenses subject to the yearly limit, any amounts you have not yet deducted because of this limit are added to the basis of the property. How to amend your taxes online Death of farmer during 9-year period. How to amend your taxes online   If a farmer dies during the 9-year period, any remaining amounts not yet deducted are deducted in the year of death. How to amend your taxes online 25% Limit on Deduction The total deduction for conservation expenses in any tax year is limited to 25% of your gross income from farming for the year. How to amend your taxes online Gross income from farming. How to amend your taxes online   Gross income from farming is the income you derive in the business of farming from the production of crops, fish, fruits, other agricultural products, or livestock. How to amend your taxes online Gains from sales of draft, breeding, or dairy livestock are included. How to amend your taxes online Gains from sales of assets such as farm machinery, or from the disposition of land, are not included. How to amend your taxes online Carryover of deduction. How to amend your taxes online   If your deductible conservation expenses in any year are more than 25% of your gross income from farming for that year, you can carry the unused deduction over to later years. How to amend your taxes online However, the deduction in any later year is limited to 25% of the gross income from farming for that year as well. How to amend your taxes online Example. How to amend your taxes online In 2012, you have gross income of $32,000 from two farms. How to amend your taxes online During the year, you incurred $10,000 of deductible soil and water conservation expenses for one of the farms. How to amend your taxes online However, your deduction is limited to 25% of $32,000, or $8,000. How to amend your taxes online The $2,000 excess ($10,000 − $8,000) is carried over to 2013 and added to deductible soil and water conservation expenses made in that year. How to amend your taxes online The total of the 2012 carryover plus 2013 expenses is deductible in 2013, subject to the limit of 25% of your gross income from farming in 2013. How to amend your taxes online Any expenses over the limit in that year are carried to 2014 and later years. How to amend your taxes online Net operating loss. How to amend your taxes online   The deduction for soil and water conservation expenses, after applying the 25% limit, is included when figuring a net operating loss (NOL) for the year. How to amend your taxes online If the NOL is carried to another year, the soil and water conservation deduction included in the NOL is not subject to the 25% limit in the year to which it is carried. How to amend your taxes online When to Deduct or Capitalize If you choose to deduct soil and water conservation expenses, you must deduct the total allowable amount on your tax return for the first year you pay or incur these expenses. How to amend your taxes online If you do not choose to deduct the expenses, you must capitalize them. How to amend your taxes online Change of method. How to amend your taxes online   If you want to change your method for the treatment of soil and water conservation expenses, or you want to treat the expenses for a particular project or a single farm in a different manner, you must get the approval of the IRS. How to amend your taxes online To get this approval, submit a written request by the due date of your return for the first tax year you want the new method to apply. How to amend your taxes online You or your authorized representative must sign the request. How to amend your taxes online   The request must include the following information. How to amend your taxes online Your name and address. How to amend your taxes online The first tax year the method or change of method is to apply. How to amend your taxes online Whether the method or change of method applies to all your soil and water conservation expenses or only to those for a particular project or farm. How to amend your taxes online If the method or change of method does not apply to all your expenses, identify the project or farm to which the expenses apply. How to amend your taxes online The total expenses you paid or incurred in the first tax year the method or change of method is to apply. How to amend your taxes online A statement that you will account separately in your books for the expenses to which this method or change of method relates. How to amend your taxes online Send your request to the following  address. How to amend your taxes online  Department of the Treasury Internal Revenue Service Center Cincinnati, OH 45999  For more information, see Change in  Accounting Method in chapter 2. How to amend your taxes online Sale of a Farm If you sell your farm, you cannot adjust the basis of the land at the time of the sale for any unused carryover of soil and water conservation expenses (except for deductions of assessments for depreciable property, discussed earlier). How to amend your taxes online However, if you acquire another farm and return to the business of farming, you can start taking deductions again for the unused carryovers. How to amend your taxes online Gain on sale of farmland. How to amend your taxes online   If you held the land 5 years or less before you sold it, gain on the sale of the land is treated as ordinary income up to the amount you previously deducted for soil and water conservation expenses. How to amend your taxes online If you held the land less than 10 but more than 5 years, the gain is treated as ordinary income up to a specified percentage of the previous deductions. How to amend your taxes online See Section 1252 property under Other Gains in chapter 9. How to amend your taxes online Prev  Up  Next   Home   More Online Publications