Publication 505 - Tax Withholding And Estimated Tax (Page 20 of 49) in pdf

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 . . . . . . . . . . . . . . . . . . . . . .

Page 20

Chapter 2 Estimated Tax for 2002

Publication 505 - Tax Withholding And Estimated Tax Page 20

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