Publication 505 - Tax Withholding And Estimated Tax (Page 18 of 49) in pdf

10. Enter $9,000 ($12,000 if you expect

2002 federal tax return as a guide. You can use

subtract them from your expected adjusted

to file married filing a joint return; $0

Form 1040 – ES to figure your estimated tax.

gross income.

if you expect to file married filing a

You must make adjustments both for

Itemized deductions are the deductions that

separate return and expect to live

changes in your own situation and for recent

can be claimed on Schedule A of Form 1040.

with your spouse at any time during

changes in the tax law. For 2003, there are

the year) . . . . . . . . . . . . . . . . . .

Reduction of itemized deductions.

several changes in the law. These changes are

11. Subtract line 10 from line 9. If zero or

For 2003, your total itemized deduc-

discussed under Important Changes for 2003 at

less, enter – 0 – . . . . . . . . . . . . .

tions may be reduced if your adjusted

the beginning of this publication. For information

12. Enter the smaller of line 9 or line 10

gross income (AGI) is more than $139,500

13. Enter one-half of line 12 . . . . . . . .

about these and other changes in the law, get

($69,750 if married filing separately). If you ex-

14. Enter the smaller of line 2 or line 13

Publication 553, Highlights of 2002 Tax

pect your AGI to be more than that amount, use

15. Multiply line 11 by 85% (.85). If line

Changes, or visit the IRS Web Site at

11 is zero, enter – 0 – . . . . . . . . . .

the following worksheet to figure the amount to

16. Add lines 14 and 15 . . . . . . . . . . .

enter on line 2 of the 2003 Estimated Tax Work-

Form 1040 – ES includes a worksheet to

17. Multiply line 1 by 85% (.85) . . . . . .

sheet.

help you figure your estimated tax. Keep the

18. Enter the smaller of line 16 or line 17.

worksheet for your records. A blank worksheet

This is the amount of your expected

Worksheet 2.3

appears later in this chapter. Example 2.9 illus-

taxable social security and railroad

retirement benefits. Include this

trates the use of the worksheet.

1. Enter the estimated total of your

amount in the total on line 1 of your

itemized deductions . . . . . . . . . . .

2003 Estimated Tax Worksheet . . .

Expected Adjusted

2. Enter the amount included in line 1

for medical and dental expenses,

Gross Income

investment interest, casualty or theft

Adjustments to income. Be sure to subtract

losses, and gambling losses . . . . .

from your expected total income all of the adjust-

Your expected adjusted gross income for 2003

3. Subtract line 2 from line 1 . . . . . . .

ments you expect to take on your 2003 tax

(line 1 of the 2003 Estimated Tax Worksheet) is

Note. If the amount on line 3 is zero,

return. If you are using your 2002 return as a

your expected total income minus your expected

stop here and enter the amount from

guide and filed Form 1040, your adjustments for

line 1 of this worksheet on line 2 of

adjustments to income.

2002 were on lines 23 – 33a. If you filed Form

the 2003 Estimated Tax Worksheet.

1040A, your 2002 adjustments were on lines

Total income. Include in your total income all

4. Multiply the amount on line 3 by .80

16 – 19 .

the income you expect to receive during the

5. Enter the amount from line 1 of the

year, even income that is subject to withholding.

2003 Estimated Tax Worksheet . . .

Self-employed. If you expect to have

However, do not include income that is tax ex-

6. Enter $139,500 ($69,750 if married

income from self-employment, use the

filing separately) . . . . . . . . . . . . .

empt.

following worksheet to figure your ex-

7. Subtract line 6 from line 5 . . . . . . .

Total income includes all income and loss for

pected self-employment tax. The result on line

8. Multiply the amount on line 7 by .03

2003 that, if you had received it in 2002, would

10 of the worksheet is your deduction for

9. Enter the smaller of line 4 or line 8

have been included in the total on line 22 of

one-half of your self-employment tax. Include

10. Subtract line 9 from line 1. Enter the

Form 1040, line 15 of Form 1040A, or line 4 of

this amount in the adjustments you subtract

result here and on line 2 of the 2003

Form 1040EZ. When figuring your net earnings

from your total income to arrive at your expected

Estimated Tax Worksheet . . . . . . .

from self-employment, be sure to use only

AGI. If you file a joint return and both you and

92.35% of your total net profit from self-employ-

your spouse have net earnings from self-em-

Standard deduction. If you expect to claim

ment.

ployment, you must each complete a separate

the standard deduction on your 2003 tax return,

worksheet.

Social security and railroad retire-

subtract it from your expected adjusted gross

ment benefits. If you expect to receive

income. Use the 2003 Standard Deduction Ta-

Worksheet 2.2

social security or tier 1 railroad retire-

bles at the end of this chapter to find your stan-

ment benefits during the year, use Worksheet

dard deduction.

1. Enter your expected income and

2.1 to figure the amount of expected taxable

profits subject to self-employment

No standard deduction. The standard de-

benefits you should include on line 1 of the 2003

tax . . . . . . . . . . . . . . . . . . . . . .

duction for some individuals is zero. Your stan-

2. Multiply the amount on line 1

Estimated Tax Worksheet.

dard deduction will be zero if you:

by .9235 . . . . . . . . . . . . . . . . . .

3. Multiply the amount on line 2

Worksheet 2.1

by .029 . . . . . . . . . . . . . . . . . . .

1) File a separate return and your spouse

4. Social security tax maximum income $87,000

itemizes deductions,

1. Enter your expected social security

5. Enter your expected wages (if

and railroad retirement benefits . . .

2) Are a nonresident alien, or

subject to social security tax) . . . . .

2. Enter one-half of line 1 . . . . . . . . .

6. Subtract line 5 from line 4 . . . . . . .

3. Enter your expected total income. Do

3) Make a return for a period of less than 12

Note. If line 6 is zero or less, enter

not include any social security and

months because you change your ac-

– 0 – on line 8 and skip to line 9.

railroad retirement benefits,

counting period.

nontaxable interest income,

7. Enter the smaller of line 2 or line 6

nontaxable IRA distributions, or

8. Multiply the amount on line 7

nontaxable pension distributions . . .

by .124 . . . . . . . . . . . . . . . . . . .

Exemptions. After you have subtracted either

4. Enter your expected nontaxable

9. Add line 3 and line 8. Enter the result

your expected itemized deductions or your stan-

interest income . . . . . . . . . . . . . .

here and on line 11 of your 2003

dard deduction from your expected adjusted

5. Add lines 2, 3, and 4 . . . . . . . . . .

Estimated Tax Worksheet . . . . . . .

gross income, reduce the amount remaining by

6. Enter your expected adjustments to

10. Multiply the amount on line 9 by .50.

$3,050 for each exemption you expect to take on

income except any student loan

This is your deduction for one-half of

interest deduction and any tuition

your 2003 tax return (lines 4 and 5 of the 2003

your self-employment tax. . . . . . . .

and fees deduction . . . . . . . . . . .

Estimated Tax Worksheet). If another person

7. Subtract line 6 from line 5 . . . . . . .

(such as your parent) can claim an exemption

8. Enter $25,000 ($32,000 if you expect

Expected Taxable Income

for you on his or her tax return, you cannot claim

to file married filing a joint return; $0

your own personal exemption. This is true even

if you expect to file married filing a

Reduce your expected adjusted gross income

if the other person will not claim your exemption

separate return and expect to live

for 2003 by either your expected itemized de-

or the exemption will be reduced or eliminated

with your spouse at any time during

ductions or your standard deduction and by your

under the phaseout rule.

the year) . . . . . . . . . . . . . . . . . .

exemptions (lines 2 through 5 of the 2002 Esti-

9. Subtract line 8 from line 7. If zero or

Phaseout. For 2003, your deduction for

mated Tax Worksheet).

less, stop here. Do not include any

personal exemptions is phased out if your ad-

social security or railroad retirement

Itemized deductions. If you expect to claim

justed gross income (AGI) falls within the follow-

benefits on line 1 of your 2003

itemized deductions on your 2003 tax return,

ing brackets.

Estimated Tax Worksheet . . . . . . .

Page 18

Chapter 2 Estimated Tax for 2003

Publication 505 - Tax Withholding And Estimated Tax Page 18

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