Married filing separately . . . . . $103,000 – $164,250
3. Combine the net short-term capital loss
are using your 2001 return as a guide and filed
Head of household . . . . . . . . . $171,650 – $294,150
and 28% rate gain or loss expected for
Form 1040, your total credits for 2001 were
2002. If zero or less, enter 0 . . . . . . . .
shown on line 51. If you filed Form 1040A, your
If the amount on line 1 of your 2002 Esti-
4. Enter the unrecaptured section 1250
total credits for 2001 were on line 33.
mated Tax Worksheet is more than the highest
gain expected for 2002 . . . . . . . . . . .
5. Add lines 3 and 4 . . . . . . . . . . . . . .
amount in the bracket for your filing status, enter
If your credits on line 9 of the worksheet are
6. Subtract line 5 from line 2. If zero or
“ – 0 – ” on line 4 of your 2002 Estimated Tax
more than your taxes on line 8, enter “ – 0 – ” on
less, enter 0 . . . . . . . . . . . . . . . . . .
Worksheet. If your AGI will fall within the
line 10 and go on to Step 4.
7. Subtract line 6 from line 1. If zero or
bracket, use the following worksheet to figure
less, enter 0 . . . . . . . . . . . . . . . . . .
the amount to enter on line 4 of your 2002
8. Enter the smaller of line 1 or $46,700
Step 4. Add your expected self-employ-
Estimated Tax Worksheet.
($27,950 if single; $23,350 if married
ment tax (line 11 of the 2002 Estimated Tax
filing separately; $37,450 if head of
Worksheet 2.4
Worksheet). You should have already figured
household) . . . . . . . . . . . . . . . . . .
your self-employment tax (see Expected Ad-
9. Enter the smaller of line 7 or line 8 . . .
1. Multiply $3,000 by the number of
10. Subtract line 2 from line 1. If zero or
justed Gross Income earlier in this chapter).
exemptions you plan to claim . . . . . . .
less, enter 0 . . . . . . . . . . . . . . . . . .
2. Enter the amount from line 1 of your
11. Enter the larger of line 9 or line 10 . . . .
2002 Estimated Tax Worksheet . . . . .
Step 5. Add your expected other taxes (line
12. Tax on amount on line 11 from the 2002
3. Enter:
12 of the 2002 Estimated Tax Worksheet).
Tax Rate Schedule . . . . . . . . . . . . .
$137,300 if single
Note. If line 7 is more than line 8, go to
Other taxes include:
$206,000 if married filing jointly
line 18.
or qualifying widow(er)
13. Subtract line 9 from line 8. If zero or
1) Taxes on accumulation distribution of
$103,000 if married filing separately
less, enter 0 . . . . . . . . . . . . . . . . . .
$171,650 if head of household . . . . .
trusts,
14. Multiply line 13 by 10% (.10) . . . . . . . .
4. Subtract line 3 from line 2 . . . . . . . . .
15. Enter the amount, if any, of your
2) Taxes on distributions from an MSA,
5. Divide the amount on line 4 by $2,500
qualified 5-year gain. Do not enter more
($1,250 if married filing separately). If the
than the amount on line 13. . . . . . . . .
3) Taxes on early distributions from:
result is not a whole number, increase it
16. Multiply line 15 by 2% (.02) . . . . . . . .
to the next whole number . . . . . . . . .
17. Subtract line 16 from line 14 . . . . . . . .
a) An IRA or other qualified plan,
6. Multiply the number on line 5 by .02.
Note. If line 13 minus line 15 is more
Enter the result as a decimal, but not
than zero and equal to line 6, enter 0 on
b) An annuity, or
more than 1 . . . . . . . . . . . . . . . . . .
lines 20, 25, and 28, and go to line 29.
7. Multiply the amount on line 1 by the
c) A modified endowment contract en-
18. Enter the smaller of line 1 or line 6 . . .
decimal on line 6 . . . . . . . . . . . . . . .
19. Subtract line 13 from line 18 . . . . . . . .
tered into after June 20, 1988,
8. Subtract line 7 from line 1. Enter the
20. Multiply line 19 by 20% (.20) . . . . . . . .
result here and on line 4 of your 2002
Note. If line 4 is zero or blank, skip lines
4) Advance earned income credit payments,
Estimated Tax Worksheet . . . . . . . . .
21 through 25 and read the note above
line 26.
5) Household employment taxes (before sub-
21. Enter the smaller of line 2 or line 4 . . .
Expected Taxes
tracting advance EIC payments made to
22. Add lines 2 and 11 . . . . . . . . . . . . . .
your employee(s) if:
and Credits
23. Subtract line 1 from line 22. If zero or
less, enter 0 . . . . . . . . . . . . . . . . . .
a) You will have federal income tax with-
24. Subtract line 23 from line 21. If zero or
After you have figured your expected taxable
held from wages, pensions, annuities,
less, enter 0 . . . . . . . . . . . . . . . . . .
income, follow the steps below to figure your
25. Multiply line 24 by 25% (.25) . . . . . . . .
gambling winnings, or other income, or
expected taxes, credits, and total tax for 2002.
Note. If line 3 is zero or blank, go to line
Most people will have entries for only a few of
b) You would be required to make esti-
29 . . . . . . . . . . . . . . . . . . . . . . . .
these steps. However, you should check every
26. Add lines 11, 13, 19, and 24 . . . . . . . .
mated tax payments even if you did not
27. Subtract line 26 from line 1. If zero or
step to be sure that you do not overlook any-
include household employment taxes
less, enter 0 . . . . . . . . . . . . . . . . . .
thing.
when figuring your estimated tax, and
28. Multiply line 27 by 28% (.28) . . . . . . . .
29. Add lines 12, 17, 20, 25, and 28 . . . . .
Step 1. Figure your expected income tax
6) Write-in amounts on line 58 of Form 1040.
30. Tax on the amount on line 1 from the
(line 6 of the 2002 Estimated Tax Worksheet).
2002 Tax Rate Schedule . . . . . . . . . .
Do not include tax on recapture of a federal
Use the 2002 Tax Rate Schedules at the end of
31. Tax. Enter the smaller of line 29 or line
mortgage subsidy, social security and Medicare
30 here and on line 6 of the 2002
this chapter or in the instructions to Form
Estimated Tax Worksheet . . . . . . . . .
tax on unreported tip income, or uncollected
1040 – ES to figure your expected income tax.
employee social security and Medicare or RRTA
You must use a special method to figure tax on
A collectibles gain or loss is any gain or
tax on tips or group-term life insurance.
the income of a child under age 14 who has
loss from the sale or exchange of a work of art,
more than $1,500 of investment income. See
If you filed Form 1040 for 2001, any of the
rug, antique, metal, gem, stamp, coin, or alco-
Tax on Investment Income of Child Under 14 in
holic beverage or other collectible that is a capi-
taxes in items 1, 2, or 3 above would have been
Publication 929, Tax Rules for Children and De-
tal asset and that was held more than one year.
included in the total on line 55 of that form.
pendents.
If you filed a 2001 Form 1040A, your only
Step 2. Add your expected taxes (line 8 of
“other taxes ” were any advance earned income
Tax on net capital gain. The regular in-
the 2002 Estimated Tax Worksheet). Include on
credit payments on line 35.
come tax rates for individuals do not apply to a
line 8 the sum of:
net capital gain. Instead, your net capital gain is
taxed at a lower maximum rate.
Step 6. Subtract your expected earned in-
1) Your tax on line 6,
come credit, additional child tax credit, and
The term “net capital gain” means the
2) Your expected alternative minimum tax
amount by which your net long-term capital gain
Form 4136 fuel tax credit (line 13b of the 2002
from Form 6251 (line 41 of the 2001 Form
for the year is more than your net short-term
Estimated Tax Worksheet). These are shown on
1040) on line 7,
capital loss.
lines 61a, 63, and 65 of the 2001 Form 1040.
3) Your expected additional taxes from Form
To figure your expected fuel tax credit, do not
The maximum rate may be 8%, 10%,
8814, Parents’ Election To Report Child’s
include fuel tax for the first three quarters of the
20%, 25%, or 28%, or a combination of
Interest and Dividends, and Form 4972,
year that you expect to have refunded to you.
those rates. Use Worksheet 2.5 to fig-
Tax on Lump-Sum Distributions (line 40
ure your tax if you have capital gain.
The earned income credit is shown on line
box a and box b of the 2001 Form 1040),
39a of the 2001 Form 1040A. The additional
and
Worksheet 2.5
child tax credit is shown on line 40 of the 2001
4) Any recapture of education credits.
Form 1040A.
1. Enter the amount from line 5 of your
The result of steps 1 through 6 is your total
2002 Estimated Tax Worksheet . . . . . .
expected tax for 2002 (line 13c of the 2002
Step 3. Subtract your expected credits (line
2. Enter the net capital gain expected for
9 of the 2002 Estimated Tax Worksheet). If you
Estimated Tax Worksheet).
2002 . . . . . . . . . . . . . . . . . . . . . .
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Chapter 2 Estimated Tax for 2002