Publication 505 - Tax Withholding And Estimated Tax (Page 35 of 49) in pdf

withheld from your spouse’s income. However,

was withheld during 2001. On his return for the

Example 3.3. James and Evelyn Brown

different rules may apply if you live in a commu-

fiscal year ending June 30, 2002, he cannot take

made joint estimated tax payments for 2001

nity property state.

credit any tax withheld during 2002.

totaling $3,000. They file separate Forms 1040.

James’ tax is $4,000 and Evelyn’s is $1,000. If

On his return for the fiscal year ending June

Community property states. The following

they do not agree on how to divide the $3,000,

30, 2003, Miles takes credit for any income tax

are community property states.

they must divide it proportionately between their

withheld in 2002.

•

returns. Because James’ tax ($4,000) is 80% of

Arizona,

the total tax ($5,000) due for both of them, his

Backup withholding. If income tax has been

•

California,

share of the estimated tax is $2,400 (80% of

withheld under the backup withholding rule, take

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$3,000). The balance, $600 (20% of $3,000), is

Idaho,

credit for it on your tax return for the fiscal year in

Evelyn’s share.

which you received the payment.

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Louisiana,

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Divorced Taxpayers

Example 3.2. Emily Smith’s records show

Nevada,

that she received income in February 2002 from

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New Mexico,

If you made joint estimated tax payments for

which $50 was withheld under the backup with-

•

2001, and you were divorced during the year,

holding rule. On her tax return for the fiscal year

Texas,

either you or your former spouse can claim all of

ending June 30, 2002, Emily takes credit for

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Washington, and

the joint payments, or you each can claim part of

withheld income tax of $50.

•

them. If you cannot agree on how to divide the

Wisconsin.

payments, you must divide them in proportion to

If you live in a community property state and file

each spouse’s individual tax as shown on your

a separate return, you and your spouse must

Estimated Tax

separate returns for 2001. See Example 3.3,

each report half of all community income in addi-

earlier.

tion to your own separate income. Each of you

If you claim any of the joint payments on your

Take credit for all your estimated tax payments

takes credit for half of all taxes withheld on the

tax return, enter your former spouse’s social

for 2001 on line 60 of Form 1040 or line 38 of

community income. If you were divorced during

security number (SSN) in the space provided on

Form 1040A. Include any overpayment from

the year, each of you generally must report half

the front of Form 1040 or Form 1040A. If you

2000 that you had credited to your 2001 esti-

the community income and can take credit for

divorced and remarried in 2001, enter your pre-

mated tax. You must use Form 1040 or Form

half the withholding on that community income

sent spouse’s SSN in that space and write your

1040A if you paid estimated tax. You cannot use

for the period before the divorce.

former spouse’s SSN, followed by “DIV,” to the

Form 1040EZ.

left of line 60, Form 1040, or line 38, Form

For more information on these rules, and

If you were a beneficiary of an estate or trust,

1040A.

some exceptions, see Publication 555, Commu-

include on line 60, Form 1040, any trust pay-

nity Property.

ments of estimated tax credited to you (from line

14a of Schedule K – 1 (Form 1041),

Fiscal Years

Beneficiary’s Share of Income, Deductions,

Excess Social Security

Credits, Etc.). On the dotted line next to line 36

If you file your tax return on the basis of a fiscal

of Schedule E (Form 1040) write “ES payment

or Railroad Retirement

year (a 12-month period ending on the last day

claimed” and the amount. Do not include this

of any month except December), you must fol-

Tax Withholding

amount in the total on line 36. The payment is

low special rules, described below, to determine

treated as being made by you on January 15,

your credit for federal income tax withholding.

2002.

Most employers must withhold social security

tax from your wages. The federal government

Normal withholding. During your fiscal year,

Name changed. If you changed your name,

and state and local governments in some cases

one calendar year will end and another will be-

and you made estimated tax payments using

do not have to withhold social security tax from

gin. You can claim credit on your tax return only

your old name, attach a brief statement to the

their employees’ wages. If you work for a rail-

for the tax withheld during the calendar year

front of your tax return indicating:

road employer, that employer must withhold tier

ending in your fiscal year. You cannot claim

•

1 railroad retirement (RRTA) tax and tier 2

credit for any of the tax withheld during the

When you made the payments,

RRTA tax.

calendar year beginning in your fiscal year. You

•

The amount of each payment,

will be able to claim credit for that withholding on

Two or more employers. If you worked for

•

your return for next year.

Which IRS address you sent the payments

two or more employers in 2001, too much social

The Form W – 2 or 1099 – R you receive for

to,

security tax or RRTA tax may have been with-

the calendar year that ends during your fiscal

•

held from your pay. You may be able to claim the

Your name when you made the payments,

year will show the tax withheld and the income

excess as a credit against your income tax when

and

you received during that calendar year.

you file your return. Table 3.1 shows the maxi-

•

Although you take credit for all the withheld

Your social security number.

mum amount that should have been withheld for

tax shown on the form, report only the part of the

any of these taxes for 2001. Figure the excess

The statement should cover payments you

income shown on the form that you received

withholding on the appropriate worksheet fol-

made jointly with your spouse as well as any you

during your fiscal year. Add to that the income

lowing Table 3.1. Use Worksheet 1 to figure

made separately.

you received during the rest of your fiscal year.

excess social security tax; use Worksheet 2 to

figure excess tier 1 RRTA tax; use Worksheet 3

Separate Returns

Example 3.1. Miles Hanson files his return

to figure excess tier 2 RRTA tax.

for a fiscal year ending June 30. In January

If you and your spouse made separate esti-

2002, he received a Form W – 2 that showed that

Note: If you worked for both a railroad em-

mated tax payments for 2001 and you file sepa-

his wages for 2001 were $15,600 and that his

ployer and a nonrailroad employer, use Work-

rate returns, you can take credit only for your

income tax withheld was $1,409.40. His records

sheet 2 to figure excess social security and tier 1

own payments.

show that he had received $7,500 of the wages

RRTA tax.

by June 30, 2001, and $8,100 from July 1

If you made joint estimated tax payments,

through December 31, 2001.

you must decide how to divide the payments

Joint returns. If you are filing a joint return,

On his return for the fiscal year ending June

between your returns. One of you can claim all

you cannot add any social security or RRTA tax

30, 2002, Miles will report the $8,100 he was

of the estimated tax paid and the other none, or

withheld from your spouse’s income to the

paid in July through December of 2001, plus

you can divide it in any other way you agree on.

amount withheld from your income. You must

whatever he was paid during the rest of the fiscal

If you cannot agree, you must divide the pay-

figure the excess separately for both you and

year — January 1, 2002, to June 30, 2002.

ments in proportion to each spouse’s individual

your spouse to determine if either of you has

However, he takes credit for all $1,409.40 that

tax as shown on your separate returns for 2000.

excess withholding.

Chapter 3 Credit for Withholding and Estimated Tax for 2001

Page 35

Publication 505 - Tax Withholding And Estimated Tax Page 35

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