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2012 Tax Returns

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2012 Tax Returns

2012 tax returns 2. 2012 tax returns   Roth IRAs Table of Contents What's New for 2013 What's New for 2014 Reminders Introduction What Is a Roth IRA? When Can a Roth IRA Be Opened? Can You Contribute to a Roth IRA?How Much Can Be Contributed? When Can You Make Contributions? What if You Contribute Too Much? Can You Move Amounts Into a Roth IRA?Conversions Rollover From Employer's Plan Into a Roth IRA Military Death Gratuities and Servicemembers' Group Life Insurance (SGLI) Payments Rollover From a Roth IRA Rollover of Exxon Valdez Settlement Income Rollover of Airline Payments Are Distributions Taxable?What Are Qualified Distributions? Additional Tax on Early Distributions Ordering Rules for Distributions How Do You Figure the Taxable Part? Must You Withdraw or Use Assets?Minimum distributions. 2012 tax returns Recognizing Losses on Investments Distributions After Owner's Death What's New for 2013 Roth IRA contribution limit. 2012 tax returns  If contributions on your behalf are made only to Roth IRAs, your contribution limit for 2013 will generally be the lesser of: $5,500, or Your taxable compensation for the year. 2012 tax returns If you were age 50 or older before 2014 and contributions on your behalf were made only to Roth IRAs, your contribution limit for 2013 will generally be the lesser of: $6,500, or Your taxable compensation for the year. 2012 tax returns However, if your modified adjusted gross income (AGI) is above a certain amount, your contribution limit may be reduced. 2012 tax returns For more information, see How Much Can Be Contributed? under Can You Contribute to a Roth IRA? in this chapter. 2012 tax returns Modified AGI limit for Roth IRA contributions increased. 2012 tax returns  For 2013, your Roth IRA contribution limit is reduced (phased out) in the following situations. 2012 tax returns Your filing status is married filing jointly or qualifying widow(er) and your modified AGI is at least $178,000. 2012 tax returns You cannot make a Roth IRA contribution if your modified AGI is $188,000 or more. 2012 tax returns Your filing status is single, head of household, or married filing separately and you did not live with your spouse at any time in 2013 and your modified AGI is at least $112,000. 2012 tax returns You cannot make a Roth IRA contribution if your modified AGI is $127,000 or more. 2012 tax returns Your filing status is married filing separately, you lived with your spouse at any time during the year, and your modified AGI is more than -0-. 2012 tax returns You cannot make a Roth IRA contribution if your modified AGI is $10,000 or more. 2012 tax returns See Can You Contribute to a Roth IRA? in this chapter. 2012 tax returns Net Investment Income Tax. 2012 tax returns  For purposes of the Net Investment Income Tax (NIIT), net investment income does not include distributions from a qualified retirement plan (for example, 401(a), 403(a), 403(b), 457(b) plans, and IRAs). 2012 tax returns However, these distributions are taken into account when determining the modified adjusted gross income threshold. 2012 tax returns Distributions from a nonqualified retirement plan are included in net investment income. 2012 tax returns See Form 8960, Net Investment Income Tax—Individuals, Estates, and Trusts, and its instructions for more information. 2012 tax returns What's New for 2014 Modified AGI limit for Roth IRA contributions increased. 2012 tax returns  For 2014, your Roth IRA contribution limit is reduced (phased out) in the following situations. 2012 tax returns Your filing status is married filing jointly or qualifying widow(er) and your modified AGI is at least $181,000. 2012 tax returns You cannot make a Roth IRA contribution if your modified AGI is $191,000 or more. 2012 tax returns Your filing status is single, head of household, or married filing separately and you did not live with your spouse at any time in 2014 and your modified AGI is at least $114,000. 2012 tax returns You cannot make a Roth IRA contribution if your modified AGI is $129,000 or more. 2012 tax returns Your filing status is married filing separately, you lived with your spouse at any time during the year, and your modified AGI is more than -0-. 2012 tax returns You cannot make a Roth IRA contribution if your modified AGI is $10,000 or more. 2012 tax returns Reminders Deemed IRAs. 2012 tax returns  For plan years beginning after 2002, a qualified employer plan (retirement plan) can maintain a separate account or annuity under the plan (a deemed IRA) to receive voluntary employee contributions. 2012 tax returns If the separate account or annuity otherwise meets the requirements of an IRA, it will be subject only to IRA rules. 2012 tax returns An employee's account can be treated as a traditional IRA or a Roth IRA. 2012 tax returns For this purpose, a “qualified employer plan” includes: A qualified pension, profit-sharing, or stock bonus plan (section 401(a) plan), A qualified employee annuity plan (section 403(a) plan), A tax-sheltered annuity plan (section 403(b) plan), and A deferred compensation plan (section 457 plan) maintained by a state, a political subdivision of a state, or an agency or instrumentality of a state or political subdivision of a state. 2012 tax returns Designated Roth accounts. 2012 tax returns  Designated Roth accounts are separate accounts under 401(k), 403(b), or 457(b) plans that accept elective deferrals that are referred to as Roth contributions. 2012 tax returns These elective deferrals are included in your income, but qualified distributions from these accounts are not included in your income. 2012 tax returns Designated Roth accounts are not IRAs and should not be confused with Roth IRAs. 2012 tax returns Contributions, up to their respective limits, can be made to Roth IRAs and designated Roth accounts according to your eligibility to participate. 2012 tax returns A contribution to one does not impact your eligibility to contribute to the other. 2012 tax returns See Publication 575, for more information on designated Roth accounts. 2012 tax returns Introduction Regardless of your age, you may be able to establish and make nondeductible contributions to an individual retirement plan called a Roth IRA. 2012 tax returns Contributions not reported. 2012 tax returns   You do not report Roth IRA contributions on your return. 2012 tax returns What Is a Roth IRA? A Roth IRA is an individual retirement plan that, except as explained in this chapter, is subject to the rules that apply to a traditional IRA (defined next). 2012 tax returns It can be either an account or an annuity. 2012 tax returns Individual retirement accounts and annuities are described in chapter 1 under How Can a Traditional IRA Be Opened. 2012 tax returns To be a Roth IRA, the account or annuity must be designated as a Roth IRA when it is opened. 2012 tax returns A deemed IRA can be a Roth IRA, but neither a SEP IRA nor a SIMPLE IRA can be designated as a Roth IRA. 2012 tax returns Unlike a traditional IRA, you cannot deduct contributions to a Roth IRA. 2012 tax returns But, if you satisfy the requirements, qualified distributions (discussed later) are tax free. 2012 tax returns Contributions can be made to your Roth IRA after you reach age 70½ and you can leave amounts in your Roth IRA as long as you live. 2012 tax returns Traditional IRA. 2012 tax returns   A traditional IRA is any IRA that is not a Roth IRA or SIMPLE IRA. 2012 tax returns Traditional IRAs are discussed in chapter 1. 2012 tax returns When Can a Roth IRA Be Opened? You can open a Roth IRA at any time. 2012 tax returns However, the time for making contributions for any year is limited. 2012 tax returns See When Can You Make Contributions , later under Can You Contribute to a Roth IRA. 2012 tax returns Can You Contribute to a Roth IRA? Generally, you can contribute to a Roth IRA if you have taxable compensation (defined later) and your modified AGI (defined later) is less than: $188,000 for married filing jointly or qualifying widow(er), $127,000 for single, head of household, or married filing separately and you did not live with your spouse at any time during the year, and $10,000 for married filing separately and you lived with your spouse at any time during the year. 2012 tax returns You may be able to claim a credit for contributions to your Roth IRA. 2012 tax returns For more information, see chapter 4. 2012 tax returns Is there an age limit for contributions?   Contributions can be made to your Roth IRA regardless of your age. 2012 tax returns Can you contribute to a Roth IRA for your spouse?   You can contribute to a Roth IRA for your spouse provided the contributions satisfy the Kay Bailey Hutchison Spousal IRA limit discussed in chapter 1 under How Much Can Be Contributed, you file jointly, and your modified AGI is less than $188,000. 2012 tax returns Compensation. 2012 tax returns   Compensation includes wages, salaries, tips, professional fees, bonuses, and other amounts received for providing personal services. 2012 tax returns It also includes commissions, self-employment income, nontaxable combat pay, military differential pay, and taxable alimony and separate maintenance payments. 2012 tax returns For more information, see What Is Compensation? under Who Can Open a Traditional IRA? in chapter 1. 2012 tax returns Modified AGI. 2012 tax returns   Your modified AGI for Roth IRA purposes is your adjusted gross income (AGI) as shown on your return with some adjustments. 2012 tax returns Use Worksheet 2-1 , later, to determine your modified AGI. 2012 tax returns    Do not subtract conversion income when figuring your other AGI-based phaseouts and taxable income, such as your deduction for medical and dental expenses. 2012 tax returns Subtract them from AGI only for the purpose of figuring your modified AGI for Roth IRA purposes. 2012 tax returns How Much Can Be Contributed? The contribution limit for Roth IRAs generally depends on whether contributions are made only to Roth IRAs or to both traditional IRAs and Roth IRAs. 2012 tax returns Worksheet 2-1. 2012 tax returns Modified Adjusted Gross Income for Roth IRA Purposes Use this worksheet to figure your modified adjusted gross income for Roth IRA purposes. 2012 tax returns 1. 2012 tax returns Enter your adjusted gross income from Form 1040, line 38; Form 1040A, line 22; or Form 1040NR, line 37 1. 2012 tax returns   2. 2012 tax returns Enter any income resulting from the conversion of an IRA (other than a Roth IRA) to a Roth IRA (included on Form 1040, line 15b, Form 1040A, line 11b, or Form 1040NR, line 16b) and a rollover from a qualified retirement plan to a Roth IRA (included on Form 1040, line 16b, Form 1040A, line 12b, or Form 1040NR, line 17b) 2. 2012 tax returns   3. 2012 tax returns Subtract line 2 from line 1 3. 2012 tax returns   4. 2012 tax returns Enter any traditional IRA deduction from Form 1040, line 32; Form 1040A, line 17; or Form 1040NR, line 32 4. 2012 tax returns   5. 2012 tax returns Enter any student loan interest deduction from Form 1040, line 33; Form 1040A, line 18; or Form 1040NR, line 33 5. 2012 tax returns   6. 2012 tax returns Enter any tuition and fees deduction from Form 1040, line 34, or Form 1040A, line 19 6. 2012 tax returns   7. 2012 tax returns Enter any domestic production activities deduction from Form 1040, line 35, or Form 1040NR, line 34 7. 2012 tax returns   8. 2012 tax returns Enter any foreign earned income exclusion and/or housing exclusion from Form 2555, line 45, or Form 2555-EZ, line 18 8. 2012 tax returns   9. 2012 tax returns Enter any foreign housing deduction from Form 2555, line 50 9. 2012 tax returns   10. 2012 tax returns Enter any excludable qualified savings bond interest from Form 8815, line 14 10. 2012 tax returns   11. 2012 tax returns Enter any excluded employer-provided adoption benefits from Form 8839, line 28 11. 2012 tax returns   12. 2012 tax returns Add the amounts on lines 3 through 11 12. 2012 tax returns   13. 2012 tax returns Enter: $188,000 if married filing jointly or qualifying widow(er), $10,000 if married filing separately and you lived with your spouse at any time during the year, or $127,000 for all others 13. 2012 tax returns   Is the amount on line 12 more than the amount on line 13? If yes, see the note below. 2012 tax returns  If no, the amount on line 12 is your modified adjusted gross income for Roth IRA purposes. 2012 tax returns       Note. 2012 tax returns If the amount on line 12 is more than the amount on line 13 and you have other income or loss items, such as social security income or passive activity losses, that are subject to AGI-based phaseouts, you can refigure your AGI solely for the purpose of figuring your modified AGI for Roth IRA purposes. 2012 tax returns (If you receive social security benefits, use Worksheet 1 in Appendix B to refigure your AGI. 2012 tax returns ) Then go to line 3 above in this Worksheet 2-1 to refigure your modified AGI. 2012 tax returns If you do not have other income or loss items subject to AGI-based phaseouts, your modified adjusted gross income for Roth IRA purposes is the amount on line 12 above. 2012 tax returns Roth IRAs only. 2012 tax returns   If contributions are made only to Roth IRAs, your contribution limit generally is the lesser of: $5,500 ($6,500 if you are age 50 or older), or Your taxable compensation. 2012 tax returns   However, if your modified AGI is above a certain amount, your contribution limit may be reduced, as explained later under Contribution limit reduced . 2012 tax returns Roth IRAs and traditional IRAs. 2012 tax returns   If contributions are made to both Roth IRAs and traditional IRAs established for your benefit, your contribution limit for Roth IRAs generally is the same as your limit would be if contributions were made only to Roth IRAs, but then reduced by all contributions for the year to all IRAs other than Roth IRAs. 2012 tax returns Employer contributions under a SEP or SIMPLE IRA plan do not affect this limit. 2012 tax returns   This means that your contribution limit is the lesser of: $5,500 ($6,500 if you are age 50 or older) minus all contributions (other than employer contributions under a SEP or SIMPLE IRA plan) for the year to all IRAs other than Roth IRAs, or Your taxable compensation minus all contributions (other than employer contributions under a SEP or SIMPLE IRA plan) for the year to all IRAs other than Roth IRAs. 2012 tax returns   However, if your modified AGI is above a certain amount, your contribution limit may be reduced, as explained below under Contribution limit reduced . 2012 tax returns   Simplified employee pensions (SEPs) are discussed in Publication 560. 2012 tax returns Savings incentive match plans for employees (SIMPLEs) are discussed in chapter 3. 2012 tax returns Repayment of reservist distributions. 2012 tax returns   You can repay qualified reservist distributions even if the repayments would cause your total contributions to the Roth IRA to be more than the general limit on contributions. 2012 tax returns However, the total repayments cannot be more than the amount of your distribution. 2012 tax returns Note. 2012 tax returns If you make repayments of qualified reservist distributions to a Roth IRA, increase your basis in the Roth IRA by the amount of the repayment. 2012 tax returns For more information, see Qualified reservist repayments under How Much Can Be Contributed? in chapter 1. 2012 tax returns Contribution limit reduced. 2012 tax returns   If your modified AGI is above a certain amount, your contribution limit is gradually reduced. 2012 tax returns Use Table 2-1, later, to determine if this reduction applies to you. 2012 tax returns Table 2-1. 2012 tax returns Effect of Modified AGI on Roth IRA Contribution This table shows whether your contribution to a Roth IRA is affected by the amount of your modified adjusted gross income (modified AGI). 2012 tax returns IF you have taxable compensation and your filing status is . 2012 tax returns . 2012 tax returns . 2012 tax returns AND your modified AGI is . 2012 tax returns . 2012 tax returns . 2012 tax returns THEN . 2012 tax returns . 2012 tax returns . 2012 tax returns married filing jointly or  qualifying widow(er) less than $178,000 you can contribute up to $5,500 ($6,500 if you are age 50 or older) as explained under How Much Can Be Contributed . 2012 tax returns at least $178,000 but less than $188,000 the amount you can contribute is reduced as explained under Contribution limit reduced . 2012 tax returns $188,000 or more you cannot contribute to a Roth IRA. 2012 tax returns married filing separately and you lived with your spouse at any time during the year zero (-0-) you can contribute up to $5,500 ($6,500 if you are age 50 or older) as explained under How Much Can Be Contributed . 2012 tax returns more than zero (-0-) but less than $10,000 the amount you can contribute is reduced as explained under Contribution limit reduced . 2012 tax returns $10,000 or more you cannot contribute to a Roth IRA. 2012 tax returns single, head of household,  or married filing separately and you did not live with your spouse at any time during the year less than $112,000 you can contribute up to $5,500 ($6,500 if you are age 50 or older) as explained under How Much Can Be Contributed . 2012 tax returns at least $112,000 but less than $127,000 the amount you can contribute is reduced as explained under Contribution limit reduced . 2012 tax returns $127,000 or more you cannot contribute to a Roth IRA. 2012 tax returns Figuring the reduction. 2012 tax returns   If the amount you can contribute must be reduced, use Worksheet 2-2, later, to figure your reduced contribution limit. 2012 tax returns Worksheet 2-2. 2012 tax returns Determining Your Reduced Roth IRA Contribution Limit Before using this worksheet, check Table 2-1, earlier, to determine whether or not your Roth IRA contribution limit is reduced. 2012 tax returns If it is, use this worksheet to determine how much it is reduced. 2012 tax returns 1. 2012 tax returns Enter your modified AGI for Roth IRA purposes (Worksheet 2-1, line 12) 1. 2012 tax returns   2. 2012 tax returns Enter: $178,000 if filing a joint return or qualifying widow(er), $-0- if married filing a separate return and you lived with your spouse at any time in 2013, or $112,000 for all others 2. 2012 tax returns   3. 2012 tax returns Subtract line 2 from line 1 3. 2012 tax returns   4. 2012 tax returns Enter: $10,000 if filing a joint return or qualifying widow(er) or married filing a separate return and you lived with your spouse at any time during the year, or $15,000 for all others 4. 2012 tax returns   5. 2012 tax returns Divide line 3 by line 4 and enter the result as a decimal (rounded to at least three places). 2012 tax returns If the result is 1. 2012 tax returns 000 or more, enter 1. 2012 tax returns 000 5. 2012 tax returns   6. 2012 tax returns Enter the lesser of: $5,500 ($6,500 if you are age 50 or older), or Your taxable compensation 6. 2012 tax returns   7. 2012 tax returns Multiply line 5 by line 6 7. 2012 tax returns   8. 2012 tax returns Subtract line 7 from line 6. 2012 tax returns Round the result up to the nearest $10. 2012 tax returns If the result is less than $200, enter $200 8. 2012 tax returns   9. 2012 tax returns Enter contributions for the year to other IRAs 9. 2012 tax returns   10. 2012 tax returns Subtract line 9 from line 6 10. 2012 tax returns   11. 2012 tax returns Enter the lesser of line 8 or line 10. 2012 tax returns This is your reduced Roth IRA contribution limit 11. 2012 tax returns      Round your reduced contribution limit up to the nearest $10. 2012 tax returns If your reduced contribution limit is more than $0, but less than $200, increase the limit to $200. 2012 tax returns Example. 2012 tax returns You are a 45-year-old, single individual with taxable compensation of $113,000. 2012 tax returns You want to make the maximum allowable contribution to your Roth IRA for 2013. 2012 tax returns Your modified AGI for 2013 is $113,000. 2012 tax returns You have not contributed to any traditional IRA, so the maximum contribution limit before the modified AGI reduction is $5,500. 2012 tax returns You figure your reduced Roth IRA contribution of $5,140 as shown on Worksheet 2-2. 2012 tax returns Example—Illustrated, later. 2012 tax returns   Worksheet 2-2. 2012 tax returns Example—Illustrated Before using this worksheet, check Table 2-1, earlier, to determine whether or not your Roth IRA contribution limit is reduced. 2012 tax returns If it is, use this worksheet to determine how much it is reduced. 2012 tax returns 1. 2012 tax returns Enter your modified AGI for Roth IRA purposes (Worksheet 2-1, line 12) 1. 2012 tax returns 113,000 2. 2012 tax returns Enter: $178,000 if filing a joint return or qualifying widow(er), $-0- if married filing a separate return and you lived with your spouse at any time in 2013, or $112,000 for all others 2. 2012 tax returns 112,000 3. 2012 tax returns Subtract line 2 from line 1 3. 2012 tax returns 1,000 4. 2012 tax returns Enter: $10,000 if filing a joint return or qualifying widow(er) or married filing a separate return and you lived with your spouse at any time during the year, or $15,000 for all others 4. 2012 tax returns 15,000 5. 2012 tax returns Divide line 3 by line 4 and enter the result as a decimal (rounded to at least three places). 2012 tax returns If the result is 1. 2012 tax returns 000 or more, enter 1. 2012 tax returns 000 5. 2012 tax returns . 2012 tax returns 067 6. 2012 tax returns Enter the lesser of: $5,500 ($6,500 if you are age 50 or older), or Your taxable compensation 6. 2012 tax returns 5,500 7. 2012 tax returns Multiply line 5 by line 6 7. 2012 tax returns 369 8. 2012 tax returns Subtract line 7 from line 6. 2012 tax returns Round the result up to the nearest $10. 2012 tax returns If the result is less than $200, enter $200 8. 2012 tax returns 5,140 9. 2012 tax returns Enter contributions for the year to other IRAs 9. 2012 tax returns 0 10. 2012 tax returns Subtract line 9 from line 6 10. 2012 tax returns 5,500 11. 2012 tax returns Enter the lesser of line 8 or line 10. 2012 tax returns This is your reduced Roth IRA contribution limit 11. 2012 tax returns 5,140 When Can You Make Contributions? You can make contributions to a Roth IRA for a year at any time during the year or by the due date of your return for that year (not including extensions). 2012 tax returns You can make contributions for 2013 by the due date (not including extensions) for filing your 2013 tax return. 2012 tax returns This means that most people can make contributions for 2013 by April 15, 2014. 2012 tax returns What if You Contribute Too Much? A 6% excise tax applies to any excess contribution to a Roth IRA. 2012 tax returns Excess contributions. 2012 tax returns   These are the contributions to your Roth IRAs for a year that equal the total of: Amounts contributed for the tax year to your Roth IRAs (other than amounts properly and timely rolled over from a Roth IRA or properly converted from a traditional IRA or rolled over from a qualified retirement plan, as described later) that are more than your contribution limit for the year (explained earlier under How Much Can Be Contributed? ), plus Any excess contributions for the preceding year, reduced by the total of: Any distributions out of your Roth IRAs for the year, plus Your contribution limit for the year minus your contributions to all your IRAs for the year. 2012 tax returns Withdrawal of excess contributions. 2012 tax returns   For purposes of determining excess contributions, any contribution that is withdrawn on or before the due date (including extensions) for filing your tax return for the year is treated as an amount not contributed. 2012 tax returns This treatment only applies if any earnings on the contributions are also withdrawn. 2012 tax returns The earnings are considered earned and received in the year the excess contribution was made. 2012 tax returns   If you timely filed your 2013 tax return without withdrawing a contribution that you made in 2013, you can still have the contribution returned to you within 6 months of the due date of your 2013 tax return, excluding extensions. 2012 tax returns If you do, file an amended return with “Filed pursuant to section 301. 2012 tax returns 9100-2” written at the top. 2012 tax returns Report any related earnings on the amended return and include an explanation of the withdrawal. 2012 tax returns Make any other necessary changes on the amended return. 2012 tax returns Applying excess contributions. 2012 tax returns    If contributions to your Roth IRA for a year were more than the limit, you can apply the excess contribution in one year to a later year if the contributions for that later year are less than the maximum allowed for that year. 2012 tax returns Can You Move Amounts Into a Roth IRA? You may be able to convert amounts from either a traditional, SEP, or SIMPLE IRA into a Roth IRA. 2012 tax returns You may be able to roll over amounts from a qualified retirement plan to a Roth IRA. 2012 tax returns You may be able to recharacterize contributions made to one IRA as having been made directly to a different IRA. 2012 tax returns You can roll amounts over from a designated Roth account or from one Roth IRA to another Roth IRA. 2012 tax returns Conversions You can convert a traditional IRA to a Roth IRA. 2012 tax returns The conversion is treated as a rollover, regardless of the conversion method used. 2012 tax returns Most of the rules for rollovers, described in chapter 1 under Rollover From One IRA Into Another , apply to these rollovers. 2012 tax returns However, the 1-year waiting period does not apply. 2012 tax returns Conversion methods. 2012 tax returns   You can convert amounts from a traditional IRA to a Roth IRA in any of the following three ways. 2012 tax returns Rollover. 2012 tax returns You can receive a distribution from a traditional IRA and roll it over (contribute it) to a Roth IRA within 60 days after the distribution. 2012 tax returns Trustee-to-trustee transfer. 2012 tax returns You can direct the trustee of the traditional IRA to transfer an amount from the traditional IRA to the trustee of the Roth IRA. 2012 tax returns Same trustee transfer. 2012 tax returns If the trustee of the traditional IRA also maintains the Roth IRA, you can direct the trustee to transfer an amount from the traditional IRA to the Roth IRA. 2012 tax returns Same trustee. 2012 tax returns   Conversions made with the same trustee can be made by redesignating the traditional IRA as a Roth IRA, rather than opening a new account or issuing a new contract. 2012 tax returns Income. 2012 tax returns   You must include in your gross income distributions from a traditional IRA that you would have had to include in income if you had not converted them into a Roth IRA. 2012 tax returns These amounts are normally included in income on your return for the year that you converted them from a traditional IRA to a Roth IRA. 2012 tax returns If you must include any amount in your gross income, you may have to increase your withholding or make estimated tax payments. 2012 tax returns See Publication 505, Tax Withholding and Estimated Tax. 2012 tax returns More information. 2012 tax returns   For more information on conversions, see Converting From Any Traditional IRA Into a Roth IRA in chapter 1. 2012 tax returns Rollover From Employer's Plan Into a Roth IRA You can roll over into a Roth IRA all or part of an eligible rollover distribution you receive from your (or your deceased spouse's): Employer's qualified pension, profit-sharing, or stock bonus plan (including a 401(k) plan); Annuity plan; Tax-sheltered annuity plan (section 403(b) plan); or Governmental deferred compensation plan (section 457 plan). 2012 tax returns Any amount rolled over is subject to the same rules for converting a traditional IRA into a Roth IRA. 2012 tax returns See Converting From Any Traditional IRA Into a Roth IRA in chapter 1. 2012 tax returns Also, the rollover contribution must meet the rollover requirements that apply to the specific type of retirement plan. 2012 tax returns Rollover methods. 2012 tax returns   You can roll over amounts from a qualified retirement plan to a Roth IRA in one of the following ways. 2012 tax returns Rollover. 2012 tax returns You can receive a distribution from a qualified retirement plan and roll it over (contribute) to a Roth IRA within 60 days after the distribution. 2012 tax returns Since the distribution is paid directly to you, the payer generally must withhold 20% of it. 2012 tax returns Direct rollover option. 2012 tax returns Your employer's qualified plan must give you the option to have any part of an eligible rollover distribution paid directly to a Roth IRA. 2012 tax returns Generally, no tax is withheld from any part of the designated distribution that is directly paid to the trustee of the Roth IRA. 2012 tax returns Rollover by nonspouse beneficiary. 2012 tax returns   If you are a designated beneficiary (other than a surviving spouse) of a deceased employee, you can roll over all or part of an eligible rollover distribution from one of the types of plans listed above into a Roth IRA. 2012 tax returns You must make the rollover by a direct trustee-to-trustee transfer into an inherited Roth IRA. 2012 tax returns   You will determine your required minimum distributions in years after you make the rollover based on whether the employee died before his or her required beginning date for taking distributions from the plan. 2012 tax returns For more information, see Distributions after the employee’s death under Tax on Excess Accumulation in Publication 575. 2012 tax returns Income. 2012 tax returns   You must include in your gross income distributions from a qualified retirement plan that you would have had to include in income if you had not rolled them over into a Roth IRA. 2012 tax returns You do not include in gross income any part of a distribution from a qualified retirement plan that is a return of contributions (after-tax contributions) to the plan that were taxable to you when paid. 2012 tax returns These amounts are normally included in income on your return for the year of the rollover from the qualified employer plan to a Roth IRA. 2012 tax returns If you must include any amount in your gross income, you may have to increase your withholding or make estimated tax payments. 2012 tax returns See Publication 505, Tax Withholding and Estimated Tax. 2012 tax returns For more information on eligible rollover distributions from qualified retirement plans and withholding, see Rollover From Employer's Plan Into an IRA in chapter 1. 2012 tax returns Military Death Gratuities and Servicemembers' Group Life Insurance (SGLI) Payments If you received a military death gratuity or SGLI payment with respect to a death from injury that occurred after October 6, 2001, you can contribute (roll over) all or part of the amount received to your Roth IRA. 2012 tax returns The contribution is treated as a qualified rollover contribution. 2012 tax returns The amount you can roll over to your Roth IRA cannot exceed the total amount that you received reduced by any part of that amount that was contributed to a Coverdell ESA or another Roth IRA. 2012 tax returns Any military death gratuity or SGLI payment contributed to a Roth IRA is disregarded for purposes of the 1-year waiting period between rollovers. 2012 tax returns The rollover must be completed before the end of the 1-year period beginning on the date you received the payment. 2012 tax returns The amount contributed to your Roth IRA is treated as part of your cost basis (investment in the contract) in the Roth IRA that is not taxable when distributed. 2012 tax returns Rollover From a Roth IRA You can withdraw, tax free, all or part of the assets from one Roth IRA if you contribute them within 60 days to another Roth IRA. 2012 tax returns Most of the rules for rollovers, described in chapter 1 under Rollover From One IRA Into Another , apply to these rollovers. 2012 tax returns However, rollovers from retirement plans other than Roth IRAs are disregarded for purposes of the 1-year waiting period between rollovers. 2012 tax returns A rollover from a Roth IRA to an employer retirement plan is not allowed. 2012 tax returns A rollover from a designated Roth account can only be made to another designated Roth account or to a Roth IRA. 2012 tax returns If you roll over an amount from one Roth IRA to another Roth IRA, the 5-year period used to determine qualified distributions does not change. 2012 tax returns The 5-year period begins with the first taxable year for which the contribution was made to the initial Roth IRA. 2012 tax returns See What are Qualified Distributions , later. 2012 tax returns Rollover of Exxon Valdez Settlement Income If you are a qualified taxpayer (defined in chapter 1, earlier) and you received qualified settlement income (defined in chapter 1, earlier), you can contribute all or part of the amount received to an eligible retirement plan which includes a Roth IRA. 2012 tax returns The rules for contributing qualified settlement income to a Roth IRA are the same as the rules for contributing qualified settlement income to a traditional IRA with the following exception. 2012 tax returns Qualified settlement income that is contributed to a Roth IRA, or to a designated Roth account, will be: Included in your taxable income for the year the qualified settlement income was received, and Treated as part of your cost basis (investment in the contract) in the Roth IRA that is not taxable when distributed. 2012 tax returns For more information, see Rollover of Exxon Valdez Settlement Income in chapter 1. 2012 tax returns Rollover of Airline Payments If you are a qualified airline employee (defined next), you may contribute any portion of an airline payment (defined below) you receive to a Roth IRA. 2012 tax returns The contribution must be made within 180 days from the date you received the payment. 2012 tax returns The contribution will be treated as a qualified rollover contribution. 2012 tax returns The rollover contribution is included in income to the extent it would be included in income if it were not part of the rollover contribution. 2012 tax returns Also, any reduction in the airline payment amount on account of employment taxes shall be disregarded when figuring the amount you can contribute to your Roth IRA. 2012 tax returns Qualified airline employee. 2012 tax returns    A current or former employee of a commercial airline carrier who was a participant in a qualified defined benefit plan maintained by the carrier which was terminated or became subject to restrictions under Section 402(b) of the Pension Protection Act of 2006. 2012 tax returns These provisions also apply to surviving spouses of qualified airline employees. 2012 tax returns Airline payment. 2012 tax returns    An airline payment is any payment of money or other property that is paid to a qualified airline employee from a commercial airline carrier. 2012 tax returns The payment also must be made both: Under the approval of an order of federal bankruptcy court in a case filed after September 11, 2001, and before January 1, 2007, and In respect of the qualified airline employee’s interest in a bankruptcy claim against the airline carrier, any note of the carrier (or amount paid in lieu of a note being issued), or any other fixed obligation of the carrier to pay a lump sum amount. 2012 tax returns Any reduction in the airline payment amount on account of employment taxes shall be disregarded when figuring the amount you can roll over to your traditional IRA. 2012 tax returns Also, an airline payment shall not include any amount payable on the basis of the airline carrier’s future earnings or profits. 2012 tax returns Are Distributions Taxable? You do not include in your gross income qualified distributions or distributions that are a return of your regular contributions from your Roth IRA(s). 2012 tax returns You also do not include distributions from your Roth IRA that you roll over tax free into another Roth IRA. 2012 tax returns You may have to include part of other distributions in your income. 2012 tax returns See Ordering Rules for Distributions , later. 2012 tax returns Basis of distributed property. 2012 tax returns   The basis of property distributed from a Roth IRA is its fair market value (FMV) on the date of distribution, whether or not the distribution is a qualified distribution. 2012 tax returns Withdrawals of contributions by due date. 2012 tax returns   If you withdraw contributions (including any net earnings on the contributions) by the due date of your return for the year in which you made the contribution, the contributions are treated as if you never made them. 2012 tax returns If you have an extension of time to file your return, you can withdraw the contributions and earnings by the extended due date. 2012 tax returns The withdrawal of contributions is tax free, but you must include the earnings on the contributions in income for the year in which you made the contributions. 2012 tax returns What Are Qualified Distributions? A qualified distribution is any payment or distribution from your Roth IRA that meets the following requirements. 2012 tax returns It is made after the 5-year period beginning with the first taxable year for which a contribution was made to a Roth IRA set up for your benefit, and The payment or distribution is: Made on or after the date you reach age 59½, Made because you are disabled (defined earlier), Made to a beneficiary or to your estate after your death, or One that meets the requirements listed under First home under Exceptions in chapter 1 (up to a $10,000 lifetime limit). 2012 tax returns Additional Tax on Early Distributions If you receive a distribution that is not a qualified distribution, you may have to pay the 10% additional tax on early distributions as explained in the following paragraphs. 2012 tax returns Distributions of conversion and certain rollover contributions within 5-year period. 2012 tax returns   If, within the 5-year period starting with the first day of your tax year in which you convert an amount from a traditional IRA or rollover an amount from a qualified retirement plan to a Roth IRA, you take a distribution from a Roth IRA, you may have to pay the 10% additional tax on early distributions. 2012 tax returns You generally must pay the 10% additional tax on any amount attributable to the part of the amount converted or rolled over (the conversion or rollover contribution) that you had to include in income (recapture amount). 2012 tax returns A separate 5-year period applies to each conversion and rollover. 2012 tax returns See Ordering Rules for Distributions , later, to determine the recapture amount, if any. 2012 tax returns   The 5-year period used for determining whether the 10% early distribution tax applies to a distribution from a conversion or rollover contribution is separately determined for each conversion and rollover, and is not necessarily the same as the 5-year period used for determining whether a distribution is a qualified distribution. 2012 tax returns See What Are Qualified Distributions , earlier. 2012 tax returns   For example, if a calendar-year taxpayer makes a conversion contribution on February 25, 2013, and makes a regular contribution for 2012 on the same date, the 5-year period for the conversion begins January 1, 2013, while the 5-year period for the regular contribution begins on January 1, 2012. 2012 tax returns   Unless one of the exceptions listed later applies, you must pay the additional tax on the portion of the distribution attributable to the part of the conversion or rollover contribution that you had to include in income because of the conversion or rollover. 2012 tax returns   You must pay the 10% additional tax in the year of the distribution, even if you had included the conversion or rollover contribution in an earlier year. 2012 tax returns You also must pay the additional tax on any portion of the distribution attributable to earnings on contributions. 2012 tax returns Other early distributions. 2012 tax returns   Unless one of the exceptions listed below applies, you must pay the 10% additional tax on the taxable part of any distributions that are not qualified distributions. 2012 tax returns Exceptions. 2012 tax returns   You may not have to pay the 10% additional tax in the following situations. 2012 tax returns You have reached age 59½. 2012 tax returns You are totally and permanently disabled. 2012 tax returns You are the beneficiary of a deceased IRA owner. 2012 tax returns You use the distribution to buy, build, or rebuild a first home. 2012 tax returns The distributions are part of a series of substantially equal payments. 2012 tax returns You have unreimbursed medical expenses that are more than 10% (or 7. 2012 tax returns 5% if you or your spouse was born before January 2, 1949) of your adjusted gross income (defined earlier) for the year. 2012 tax returns You are paying medical insurance premiums during a period of unemployment. 2012 tax returns The distributions are not more than your qualified higher education expenses. 2012 tax returns The distribution is due to an IRS levy of the qualified plan. 2012 tax returns The distribution is a qualified reservist distribution. 2012 tax returns Most of these exceptions are discussed earlier in chapter 1 under Early Distributions . 2012 tax returns Please click here for the text description of the image. 2012 tax returns Is Roth Distributions a Qualified Distribution? Ordering Rules for Distributions If you receive a distribution from your Roth IRA that is not a qualified distribution, part of it may be taxable. 2012 tax returns There is a set order in which contributions (including conversion contributions and rollover contributions from qualified retirement plans) and earnings are considered to be distributed from your Roth IRA. 2012 tax returns For these purposes, disregard the withdrawal of excess contributions and the earnings on them (discussed earlier under What if You Contribute Too Much ). 2012 tax returns Order the distributions as follows. 2012 tax returns Regular contributions. 2012 tax returns Conversion and rollover contributions, on a first-in, first-out basis (generally, total conversions and rollovers from the earliest year first). 2012 tax returns See Aggregation (grouping and adding) rules, later. 2012 tax returns Take these conversion and rollover contributions into account as follows: Taxable portion (the amount required to be included in gross income because of the conversion or rollover) first, and then the Nontaxable portion. 2012 tax returns Earnings on contributions. 2012 tax returns Disregard rollover contributions from other Roth IRAs for this purpose. 2012 tax returns Aggregation (grouping and adding) rules. 2012 tax returns   Determine the taxable amounts distributed (withdrawn), distributions, and contributions by grouping and adding them together as follows. 2012 tax returns Add all distributions from all your Roth IRAs during the year together. 2012 tax returns Add all regular contributions made for the year (including contributions made after the close of the year, but before the due date of your return) together. 2012 tax returns Add this total to the total undistributed regular contributions made in prior years. 2012 tax returns Add all conversion and rollover contributions made during the year together. 2012 tax returns For purposes of the ordering rules, in the case of any conversion or rollover in which the conversion or rollover distribution is made in 2013 and the conversion or rollover contribution is made in 2014, treat the conversion or rollover contribution as contributed before any other conversion or rollover contributions made in 2014. 2012 tax returns Add any recharacterized contributions that end up in a Roth IRA to the appropriate contribution group for the year that the original contribution would have been taken into account if it had been made directly to the Roth IRA. 2012 tax returns   Disregard any recharacterized contribution that ends up in an IRA other than a Roth IRA for the purpose of grouping (aggregating) both contributions and distributions. 2012 tax returns Also disregard any amount withdrawn to correct an excess contribution (including the earnings withdrawn) for this purpose. 2012 tax returns Example. 2012 tax returns On October 15, 2009, Justin converted all $80,000 in his traditional IRA to his Roth IRA. 2012 tax returns His Forms 8606 from prior years show that $20,000 of the amount converted is his basis. 2012 tax returns Justin included $60,000 ($80,000 − $20,000) in his gross income. 2012 tax returns On February 23, 2013, Justin made a regular contribution of $5,000 to a Roth IRA. 2012 tax returns On November 8, 2013, at age 60, Justin took a $7,000 distribution from his Roth IRA. 2012 tax returns The first $5,000 of the distribution is a return of Justin's regular contribution and is not includible in his income. 2012 tax returns The next $2,000 of the distribution is not includible in income because it was included previously. 2012 tax returns Figuring your recapture amount. 2012 tax returns   If you had an early distribution from your Roth IRAs in 2013, you must allocate the early distribution by using the Recapture Amount—Allocation Chart, later. 2012 tax returns Recapture Amount—Allocation Chart Enter the amount from your 2013 Form 8606, line 19   Before you begin: You will need your prior year Form(s) 8606 and income tax return(s) if you entered an amount on any line(s) as indicated below. 2012 tax returns   You will now allocate the amount you entered above (2013 Form 8606, line 19) in the order shown, to the amounts on the lines listed below (to the extent a prior year distribution was not allocable to the amount). 2012 tax returns The maximum amount you can enter on each line below is the amount entered on the referenced lines of the form for that year. 2012 tax returns Note. 2012 tax returns Once you have allocated the full amount from your 2013 Form 8606, line 19, STOP. 2012 tax returns See the Example , earlier. 2012 tax returns Tax Year Your Form 2013 Form 8606, line 20   Form 8606, line 22   1998 Form 8606, line 16   Form 8606, line 15   1999 Form 8606, line 16   Form 8606, line 15   2000 Form 8606, line 16   Form 8606, line 15   2001 Form 8606, line 18   Form 8606, line 17   2002 Form 8606, line 18   Form 8606, line 17   2003 Form 8606, line 18   Form 8606, line 17   2004 Form 8606, line 18   Form 8606, line 17   2005 Form 8606, line 18   Form 8606, line 17   2006 Form 8606, line 18   Form 8606, line 17   2007 Form 8606, line 18   Form 8606, line 17   2008 Form 8606, line 18  and  Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b*   Form 8606, line 17  and  Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a**   2009 Form 8606, line 18  and  Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b*   Form 8606, line 17  and  Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a**   2010 Form 8606, lines 18 and 23   Form 8606, lines 17 and 22   2011 Form 8606, line 18  and  Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b*   Form 8606, line 17  and  Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a**   2012 Form 8606, line 18  and  Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b*   Form 8606, line 17  and  Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a**   2013 Form 8606, line 18  and  Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b*   Form 8606, line 17  and  Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a**   2013 Form 8606, line 25       *Only include those amounts rolled over to a Roth IRA. 2012 tax returns  **Only include any contributions (usually Form 1099-R, box 5) that were taxable to you when made and rolled over to a Roth IRA. 2012 tax returns Amount to include on Form 5329, line 1. 2012 tax returns   Include on line 1 of your 2013 Form 5329 the following four amounts from the Recapture Amount—Allocation Chart that you filled out. 2012 tax returns The amount you allocated to line 20 of your 2013 Form 8606. 2012 tax returns The amount(s) allocated to your 2009 through 2013 Forms 8606, line 18, and your 2010 Form 8606, line 23. 2012 tax returns The amount(s) allocated to your 2009, 2011, 2012, and 2013 Forms 1040, line 16b; Forms 1040A, line 12b; and Forms 1040NR, line 17b. 2012 tax returns The amount from your 2013 Form 8606, line 25. 2012 tax returns   Also, include any amount you allocated to line 20 of your 2013 Form 8606 on your 2013 Form 5329, line 2, and enter exception number 09. 2012 tax returns Example. 2012 tax returns Ishmael, age 32, opened a Roth IRA in 2000. 2012 tax returns He made the maximum contributions to it every year. 2012 tax returns In addition, he made the following transactions into his Roth IRA. 2012 tax returns In 2005, he converted $10,000 from his traditional IRA into his Roth IRA. 2012 tax returns He filled out a 2005 Form 8606 and attached it with his 2005 Form 1040. 2012 tax returns He entered $0 on line 17 of Form 8606 because he took a deduction for all the contributions to the traditional IRA, therefore he has no basis. 2012 tax returns He entered $10,000 on line 18 of Form 8606. 2012 tax returns In 2011, he rolled over the entire balance of his qualified retirement plan, $20,000, into a Roth IRA when he changed jobs. 2012 tax returns He used a 2011 Form 1040 to file his taxes. 2012 tax returns He entered $20,000 on line 16a of Form 1040 because that was the amount reported in box 1 of his 2011 Form 1099-R. 2012 tax returns Box 5 of his 2011 Form 1099-R reported $0 since he did not make any after-tax contributions to the qualified retirement plan. 2012 tax returns He entered $20,000 on line 16b of Form 1040 since that is the taxable amount that was rolled over in 2011. 2012 tax returns The total balance in his Roth IRA as of January 1, 2013 was $105,000 ($50,000 in contributions from 2000 through 2012 + $10,000 from the 2005 conversion + $20,000 from the 2011 rollover + $25,000 from earnings). 2012 tax returns He has not taken any early distribution from his Roth IRA before 2013. 2012 tax returns In 2013, he made the maximum contribution of $5,500 to his Roth IRA. 2012 tax returns In August of 2013, he took a $85,500 early distribution from his Roth IRA to use as a down payment on the purchase of his first home. 2012 tax returns See his filled out Illustrated Recapture Amount—Allocation Chart, later, to see how he allocated the amounts from the above transactions. 2012 tax returns Based on his allocation, he would enter $20,000 on his 2013 Form 5329, line 1 (see Amount to include on Form 5329, line 1 , above). 2012 tax returns He should also report $10,000 on his 2013 Form 5329, line 2, and enter exception 09 since that amount is not subject to the 10% additional tax on early distributions. 2012 tax returns Illustrated Recapture Amount—Allocation Chart Enter the amount from your 2013 Form 8606, line 19 $85,500 Before you begin: You will need your prior year Form(s) 8606 and income tax return(s) if you entered an amount on any line(s) as indicated below. 2012 tax returns   You will now allocate the amount you entered above (2013 Form 8606, line 19) in the order shown, to the amounts on the lines listed below (to the extent a prior year distribution was not allocable to the amount). 2012 tax returns The maximum amount you can enter on each line below is the amount entered on the referenced lines of the form for that year. 2012 tax returns Note. 2012 tax returns Once you have allocated the full amount from your 2013 Form 8606, line 19, STOP. 2012 tax returns See the Example , earlier. 2012 tax returns Tax Year Your Form 2013 Form 8606, line 20 $10,000 Form 8606, line 22 $55,500 1998 Form 8606, line 16   Form 8606, line 15   1999 Form 8606, line 16   Form 8606, line 15   2000 Form 8606, line 16   Form 8606, line 15   2001 Form 8606, line 18   Form 8606, line 17   2002 Form 8606, line 18   Form 8606, line 17   2003 Form 8606, line 18   Form 8606, line 17   2004 Form 8606, line 18   Form 8606, line 17   2005 Form 8606, line 18 $10,000 Form 8606, line 17 $-0- 2006 Form 8606, line 18   Form 8606, line 17   2007 Form 8606, line 18   Form 8606, line 17   2008 Form 8606, line 18  and  Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b*   Form 8606, line 17  and  Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a**   2009 Form 8606, line 18  and  Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b*   Form 8606, line 17  and  Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a**   2010 Form 8606, lines 18 and 23   Form 8606, lines 17 and 22   2011 Form 8606, line 18  and  Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b* $10,000 Form 8606, line 17  and  Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a**   2012 Form 8606, line 18  and  Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b*   Form 8606, line 17  and  Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a**   2013 Form 8606, line 18  and  Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b*   Form 8606, line 17  and  Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a**   2013 Form 8606, line 25       *Only include those amounts rolled over to a Roth IRA. 2012 tax returns  **Only include any contributions (usually Form 1099-R, box 5) that were taxable to you when made and rolled over to a Roth IRA. 2012 tax returns How Do You Figure the Taxable Part? To figure the taxable part of a distribution that is not a qualified distribution, complete Form 8606, Part III. 2012 tax returns Must You Withdraw or Use Assets? You are not required to take distributions from your Roth IRA at any age. 2012 tax returns The minimum distribution rules that apply to traditional IRAs do not apply to Roth IRAs while the owner is alive. 2012 tax returns However, after the death of a Roth IRA owner, certain of the minimum distribution rules that apply to traditional IRAs also apply to Roth IRAs as explained later under Distributions After Owner's Death . 2012 tax returns Minimum distributions. 2012 tax returns   You cannot use your Roth IRA to satisfy minimum distribution requirements for your traditional IRA. 2012 tax returns Nor can you use distributions from traditional IRAs for required distributions from Roth IRAs. 2012 tax returns See Distributions to beneficiaries , later. 2012 tax returns Recognizing Losses on Investments If you have a loss on your Roth IRA investment, you can recognize the loss on your income tax return, but only when all the amounts in all of your Roth IRA accounts have been distributed to you and the total distributions are less than your unrecovered basis. 2012 tax returns Your basis is the total amount of contributions in your Roth IRAs. 2012 tax returns You claim the loss as a miscellaneous itemized deduction, subject to the 2%-of-adjusted-gross-income limit that applies to certain miscellaneous itemized deductions on Schedule A (Form 1040). 2012 tax returns Any such losses are added back to taxable income for purposes of calculating the alternative minimum tax. 2012 tax returns Distributions After Owner's Death If a Roth IRA owner dies, the minimum distribution rules that apply to traditional IRAs apply to Roth IRAs as though the Roth IRA owner died before his or her required beginning date. 2012 tax returns See When Can You Withdraw or Use Assets? in chapter 1. 2012 tax returns Distributions to beneficiaries. 2012 tax returns   Generally, the entire interest in the Roth IRA must be distributed by the end of the fifth calendar year after the year of the owner's death unless the interest is payable to a designated beneficiary over the life or life expectancy of the designated beneficiary. 2012 tax returns (See When Must You Withdraw Assets? (Required Minimum Distributions) in chapter 1. 2012 tax returns )   If paid as an annuity, the entire interest must be payable over a period not greater than the designated beneficiary's life expectancy and distributions must begin before the end of the calendar year following the year of death. 2012 tax returns Distributions from another Roth IRA cannot be substituted for these distributions unless the other Roth IRA was inherited from the same decedent. 2012 tax returns   If the sole beneficiary is the spouse, he or she can either delay distributions until the decedent would have reached age 70½ or treat the Roth IRA as his or her own. 2012 tax returns Combining with other Roth IRAs. 2012 tax returns   A beneficiary can combine an inherited Roth IRA with another Roth IRA maintained by the beneficiary only if the beneficiary either: Inherited the other Roth IRA from the same decedent, or Was the spouse of the decedent and the sole beneficiary of the Roth IRA and elects to treat it as his or her own IRA. 2012 tax returns Distributions that are not qualified distributions. 2012 tax returns   If a distribution to a beneficiary is not a qualified distribution, it is generally includible in the beneficiary's gross income in the same manner as it would have been included in the owner's income had it been distributed to the IRA owner when he or she was alive. 2012 tax returns   If the owner of a Roth IRA dies before the end of: The 5-year period beginning with the first taxable year for which a contribution was made to a Roth IRA set up for the owner's benefit, or The 5-year period starting with the year of a conversion contribution from a traditional IRA or a rollover from a qualified retirement plan to a Roth IRA, each type of contribution is divided among multiple beneficiaries according to the pro-rata share of each. 2012 tax returns See Ordering Rules for Distributions , earlier in this chapter under Are Distributions Taxable. 2012 tax returns Example. 2012 tax returns When Ms. 2012 tax returns Hibbard died in 2013, her Roth IRA contained regular contributions of $4,000, a conversion contribution of $10,000 that was made in 2009, and earnings of $2,000. 2012 tax returns No distributions had been made from her IRA. 2012 tax returns She had no basis in the conversion contribution in 2009. 2012 tax returns When she established this Roth IRA (her first) in 2009, she named each of her four children as equal beneficiaries. 2012 tax returns Each child will receive one-fourth of each type of contribution and one-fourth of the earnings. 2012 tax returns An immediate distribution of $4,000 to each child will be treated as $1,000 from regular contributions, $2,500 from conversion contributions, and $500 from earnings. 2012 tax returns In this case, because the distributions are made before the end of the applicable 5-year period for a qualified distribution, each beneficiary includes $500 in income for 2013. 2012 tax returns The 10% additional tax on early distributions does not apply because the distribution was made to the beneficiaries as a result of the death of the IRA owner. 2012 tax returns If distributions from an inherited Roth IRA are less than the required minimum distribution for the year, discussed in chapter 1 under When Must You Withdraw Assets? (Required Minimum Distributions), you may have to pay a 50% excise tax for that year on the amount not distributed as required. 2012 tax returns For the tax on excess accumulations (insufficient distributions), see Excess Accumulations (Insufficient Distributions) under What Acts Result in Penalties or Additional Taxes? in chapter 1. 2012 tax returns If this applies to you, substitute “Roth IRA” for “traditional IRA” in that discussion. 2012 tax returns Prev  Up  Next   Home   More Online Publications
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Beware: Offers to Skip a Payment

If your credit company invites you to skip a monthly payment without a penalty, it is not doing you a favor. You will still owe finance charges on your unpaid balance. And interest could be adding up on any purchases you make after the due date you skipped.

Beware: Teaser Rates

Some cards are advertised with very low introductory interest rates called teasers. The rate is good for a short period of time. If you know you can pay what you owe while the low rate is in effect, it could be a good deal. But if the teaser time runs out and you still owe money, you could end up paying a higher rate than you might have without the special introductory rate. Just one late payment could also cancel the teaser rate.

Beware: Credit Insurance

When you take out a loan for a big purchase, a salesperson may try to sell you credit insurance. Your credit card company may also encourage you to purchase credit insurance. The coverage may be promoted as a way for you to protect yourself if your property is damaged or lost. Other credit insurance offers promises to make loan payments if you are laid off, become disabled or die. It is almost always better to buy regular property, life or disability insurance instead of credit insurance.

Be Alert: 'Credit Repair' Scams

Beware! Before you sign up for fee based credit repair services, beware. Many of the promised services are either illegal or ones you can do for free by yourself. Before you sign up to work with these companies, here are some tidbits to keep in mind:

  • A credit repair company must give you a copy of the "Consumer Credit File Rights under State and Federal Law" before you sign a contract.
  • The company cannot perform any services until you have signed a written contract and completed a three day waiting period, during which time you can cancel the contract without paying any fees.
  • The company cannot charge you until it has completed the promised services, according to the Credit Repair Organizations Act.
  • It is illegal to erase timely and accurate negative information contained in your credit history.
  • Suggestions that you create a new credit history (also called file segregation) by requesting an Employer Identification Number from the IRS are also illegal.
  • You can work to solve your own credit challenges, by requesting a free copy of your credit report, and by working with creditors to dispute incorrect information.

CARD Act Protections for Consumers

The Credit Card Accountability Responsibility & Disclosure (CARD) Act brought about sweeping protections for consumers. Among other things, your credit card company:

Fees

  • Cannot change rates or fees without sending you a notice 45 days in advance in most cases.
  • Must give you the option of rejecting a fee increase, but be aware that the credit card company may close your account if you reject the fee increase and may require a higher monthly payment.
  • Cannot charge you a late payment fee of more than $25, regardless of how much you owe- unless one of your last six payments was late or the credit card company can justify a higher fee based on the cost of late payments.
  • Cannot charge a late payment fee that is greater than your minimum payment.
  • Cannot charge you an inactivity fee for not using your card.
  • Cannot charge you more than one fee for a single late payment or any other violation of your cardholder agreement.
  • Cannot charge you over-the-limit transaction fees unless you opt in, stating that you want to allow transactions that take you over your credit card limit. If the credit card company allows the transaction without your opt-in, it cannot charge you a fee.
  • Can impose only one fee per billing cycle for transactions that take you over your credit limit if you opt in to over-the-limit transactions. You can revoke your opt-in at any time.

Payments

  • Has to tell you how long it will take to pay off your balance if you make only minimum payments.
  • Must mail or deliver your credit card bill at least 21 days before your payment is due.
  • Must apply any payments above the minimum required amount to the balance with the highest interest rate, if you have more than one rate.

Interest Rates

  • Cannot increase your rate for the first 12 months after you open an account unless you have a variable interest rate or an introductory rate; you are more than 60 days late paying your bill; or you are in a workout agreement and don't make payments as arranged.
  • Cannot charge higher rates for purchases made before you receive notice of a new rate.
  • Cannot use the double-cycle billing method when calculating interest; interest can only be charged on balances within the current billing cycle.
  • Cannot increase your Annual Percentage Rate (APR) without explaining why it is doing so. If your credit card company increases your APR, it generally must re-evaluate that rate increase every six months. Under some circumstances, it may have to reduce your rate after the evaluation.

What's more, a credit card company can grant credit cards to consumers under age 21 only if they can show they are able to make payments or have a cosigner for the card. The Federal Reserve has more information about CARD Act protections.

The 2012 Tax Returns

2012 tax returns 2. 2012 tax returns   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. 2012 tax returns This includes income from self-employment, interest, dividends, alimony, rent, gains from the sale of assets, prizes, and awards. 2012 tax returns 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. 2012 tax returns 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. 2012 tax returns 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. 2012 tax returns 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. 2012 tax returns For information on when the penalty applies, see chapter 4. 2012 tax returns 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. 2012 tax returns 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. 2012 tax returns 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. 2012 tax returns Worksheets. 2012 tax returns   You may need to use several of the blank worksheets included in this chapter. 2012 tax returns See Worksheets for Chapter 2, later, to locate what you need. 2012 tax returns 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. 2012 tax returns To do this, file a new Form W-4 with your employer. 2012 tax returns See chapter 1. 2012 tax returns Estimated tax not required. 2012 tax returns   You do not have to pay estimated tax for 2014 if you meet all three of the following conditions. 2012 tax returns You had no tax liability for 2013. 2012 tax returns You were a U. 2012 tax returns S. 2012 tax returns citizen or resident alien for the whole year. 2012 tax returns Your 2013 tax year covered a 12-month period. 2012 tax returns   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. 2012 tax returns Please click here for the text description of the image. 2012 tax returns 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. 2012 tax returns 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. 2012 tax returns General Rule In most cases, you must pay estimated tax for 2014 if both of the following apply. 2012 tax returns You expect to owe at least $1,000 in tax for 2014, after subtracting your withholding and refundable credits. 2012 tax returns 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. 2012 tax returns Your 2013 tax return must cover all 12 months. 2012 tax returns Note. 2012 tax returns The percentages in (2a) or (2b) above may be different if you are a farmer, fisherman, or higher income taxpayer. 2012 tax returns See Special Rules , later. 2012 tax returns 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. 2012 tax returns Figure 2-A takes you through the general rule. 2012 tax returns You may find this helpful in determining if you must pay estimated tax. 2012 tax returns If all your income will be subject to income tax withholding, you probably do not need to pay estimated tax. 2012 tax returns Example 1. 2012 tax returns Jane Smart uses Figure 2-A and the following information to figure whether she should pay estimated tax for 2014. 2012 tax returns She files as head of household claiming her dependent son, takes the standard deduction, and expects no refundable credits for 2014. 2012 tax returns 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). 2012 tax returns 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. 2012 tax returns 50). 2012 tax returns Jane does not need to pay estimated tax. 2012 tax returns Example 2. 2012 tax returns The facts are the same as in Example 1, except that Jane expects only $8,700 tax to be withheld in 2014. 2012 tax returns Because that is less than $9,913. 2012 tax returns 50, her answer to box 2a is NO. 2012 tax returns 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). 2012 tax returns Jane must increase her withholding or pay estimated tax for 2014. 2012 tax returns Example 3. 2012 tax returns The facts are the same as in Example 2, except that the total tax shown on Jane's 2013 return was $8,600. 2012 tax returns Because she expects to have more than $8,600 withheld in 2014 ($8,700), her answer to box 2b is YES. 2012 tax returns Jane does not need to pay estimated tax for 2014. 2012 tax returns Married Taxpayers If you qualify to make joint estimated tax payments, apply the rules discussed here to your joint estimated income. 2012 tax returns You and your spouse can make joint estimated tax payments even if you are not living together. 2012 tax returns 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). 2012 tax returns 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. 2012 tax returns These individuals can take credit only for the estimated tax payments that he or she made. 2012 tax returns If you and your spouse cannot make joint estimated tax payments, apply these rules to your separate estimated income. 2012 tax returns Making joint or separate estimated tax payments will not affect your choice of filing a joint tax return or separate returns for 2014. 2012 tax returns 2013 separate returns and 2014 joint return. 2012 tax returns   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. 2012 tax returns You filed a separate return if you filed as single, head of household, or married filing separately. 2012 tax returns 2013 joint return and 2014 separate returns. 2012 tax returns   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. 2012 tax returns You file a separate return if you file as single, head of household, or married filing separately. 2012 tax returns   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. 2012 tax returns Then multiply the tax on the joint return by the following fraction. 2012 tax returns      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. 2012 tax returns Joe and Heather filed a joint return for 2013 showing taxable income of $48,500 and a tax of $6,386. 2012 tax returns Of the $48,500 taxable income, $40,100 was Joe's and the rest was Heather's. 2012 tax returns For 2014, they plan to file married filing separately. 2012 tax returns 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. 2012 tax returns 6% Joe's share of tax on joint return  ($6,386 × 87. 2012 tax returns 6%) $5,594 Special Rules There are special rules for farmers, fishermen, and certain higher income taxpayers. 2012 tax returns 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. 2012 tax returns Gross income. 2012 tax returns   Your gross income is all income you receive in the form of money, goods, property, and services that is not exempt from tax. 2012 tax returns 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. 2012 tax returns Joint returns. 2012 tax returns   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. 2012 tax returns Gross income from farming. 2012 tax returns   This is income from cultivating the soil or raising agricultural commodities. 2012 tax returns It includes the following amounts. 2012 tax returns Income from operating a stock, dairy, poultry, bee, fruit, or truck farm. 2012 tax returns Income from a plantation, ranch, nursery, range, orchard, or oyster bed. 2012 tax returns Crop shares for the use of your land. 2012 tax returns Gains from sales of draft, breeding, dairy, or sporting livestock. 2012 tax returns   For 2013, gross income from farming is the total of the following amounts. 2012 tax returns Schedule F (Form 1040), Profit or Loss From Farming, line 9. 2012 tax returns Form 4835, Farm Rental Income and Expenses, line 7. 2012 tax returns 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). 2012 tax returns Your gains from sales of draft, breeding, dairy, or sporting livestock shown on Form 4797, Sales of Business Property. 2012 tax returns   Wages you receive as a farm employee and wages you receive from a farm corporation are not gross income from farming. 2012 tax returns Gross income from fishing. 2012 tax returns   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. 2012 tax returns   Gross income from fishing includes the following amounts. 2012 tax returns Schedule C (Form 1040), Profit or Loss From Business. 2012 tax returns Income for services as an officer or crew member of a vessel while the vessel is engaged in fishing. 2012 tax returns 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). 2012 tax returns Certain taxable interest and punitive damage awards received in connection with the Exxon Valdez litigation. 2012 tax returns Income for services normally performed in connection with fishing. 2012 tax returns 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. 2012 tax returns 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. 2012 tax returns For 2013, AGI is the amount shown on Form 1040, line 37; Form 1040A, line 21; and Form 1040EZ, line 4. 2012 tax returns Note. 2012 tax returns This rule does not apply to farmers and fishermen. 2012 tax returns Aliens Resident and nonresident aliens also may have to pay estimated tax. 2012 tax returns Resident aliens should follow the rules in this publication, unless noted otherwise. 2012 tax returns Nonresident aliens should get Form 1040-ES (NR), U. 2012 tax returns S. 2012 tax returns Estimated Tax for Nonresident Alien Individuals. 2012 tax returns You are an alien if you are not a citizen or national of the United States. 2012 tax returns You are a resident alien if you either have a green card or meet the substantial presence test. 2012 tax returns For more information about withholding, the substantial presence test, and Form 1040-ES (NR), see Publication 519. 2012 tax returns Estates and Trusts Estates and trusts also must pay estimated tax. 2012 tax returns 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. 2012 tax returns Estates and trusts must use Form 1041-ES, Estimated Income Tax for Estates and Trusts, to figure and pay estimated tax. 2012 tax returns 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. 2012 tax returns When figuring your 2014 estimated tax, it may be helpful to use your income, deductions, and credits for 2013 as a starting point. 2012 tax returns Use your 2013 federal tax return as a guide. 2012 tax returns You can use Form 1040-ES to figure your estimated tax. 2012 tax returns Nonresident aliens use Form 1040-ES (NR) to figure estimated tax. 2012 tax returns You must make adjustments both for changes in your own situation and for recent changes in the tax law. 2012 tax returns Some of these changes are discussed under What's New for 2014 , earlier. 2012 tax returns For information about these and other changes in the law, visit the IRS website at IRS. 2012 tax returns gov. 2012 tax returns The instructions for Form 1040-ES include a worksheet to help you figure your estimated tax. 2012 tax returns Keep the worksheet for your records. 2012 tax returns 2014 Estimated Tax Worksheet Use Worksheet 2-1 to help guide you through the information about completing the 2014 Estimated Tax Worksheet. 2012 tax returns You can also find a copy of the worksheet in the Instructions for Form 1040-ES. 2012 tax returns Expected AGI—Line 1 Your expected AGI for 2014 (line 1) is your expected total income minus your expected adjustments to income. 2012 tax returns Total income. 2012 tax returns   Include in your total income all the income you expect to receive during the year, even income that is subject to withholding. 2012 tax returns However, do not include income that is tax exempt. 2012 tax returns   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. 2012 tax returns Social security and railroad retirement benefits. 2012 tax returns 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. 2012 tax returns Adjustments to income. 2012 tax returns   Be sure to subtract from your expected total income all of the adjustments you expect to take on your 2014 tax return. 2012 tax returns Self-employed. 2012 tax returns 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. 2012 tax returns Include the amount from Worksheet 2-3 in your expected adjustments to income. 2012 tax returns 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. 2012 tax returns 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). 2012 tax returns Itemized deductions—line 2. 2012 tax returns   If you expect to claim itemized deductions on your 2014 tax return, enter the estimated amount on line 2. 2012 tax returns   Itemized deductions are the deductions that can be claimed on Schedule A (Form 1040). 2012 tax returns    For 2014, your total itemized deductions may be reduced if your AGI is more than the amount shown next for your filing status. 2012 tax returns 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. 2012 tax returns Standard deduction—line 2. 2012 tax returns   If you expect to claim the standard deduction on your 2014 tax return, enter the amount on line 2. 2012 tax returns Use Worksheet 2-4 to figure your standard deduction. 2012 tax returns No standard deduction. 2012 tax returns   The standard deduction for some individuals is zero. 2012 tax returns 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. 2012 tax returns Exemptions—line 4. 2012 tax returns   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. 2012 tax returns 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. 2012 tax returns 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. 2012 tax returns    For 2014, your deduction for personal exemption is reduced if your AGI is more than the amount shown next for your filing status. 2012 tax returns 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. 2012 tax returns 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. 2012 tax returns Most people will have entries for only a few of these steps. 2012 tax returns However, you should check every step to be sure you do not overlook anything. 2012 tax returns Step 1. 2012 tax returns   Figure your expected income tax (line 6). 2012 tax returns Generally, you will use the 2014 Tax Rate Schedules, later, to figure your expected income tax. 2012 tax returns   However, see below for situations where you must use a different method to compute your estimated tax. 2012 tax returns Tax on child's investment income. 2012 tax returns   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. 2012 tax returns Children under age 18 at the end of 2014. 2012 tax returns The following children if their earned income is not more than half their support. 2012 tax returns Children age 18 at the end of 2014. 2012 tax returns Children who are full-time students over age 18 and under age 24 at the end of 2014. 2012 tax returns See Publication 929, Tax Rules for Children and Dependents. 2012 tax returns 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. 2012 tax returns Tax on net capital gain. 2012 tax returns   The regular income tax rates for individuals do not apply to a net capital gain. 2012 tax returns Instead, your net capital gain is taxed at a lower maximum rate. 2012 tax returns   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. 2012 tax returns Tax on capital gain and qualified dividends. 2012 tax returns If the amount on line 1 includes a net capital gain or qualified dividends, use Worksheet 2-7 to figure your tax. 2012 tax returns Note. 2012 tax returns For 2014, your capital gains and dividends rate will depend on your income. 2012 tax returns Tax if excluding foreign earned income or excluding or deducting foreign housing. 2012 tax returns 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. 2012 tax returns Step 2. 2012 tax returns   Total your expected taxes (line 8). 2012 tax returns Include on line 8 the sum of the following. 2012 tax returns Your tax on line 6. 2012 tax returns Your expected alternative minimum tax (AMT) from Form 6251, or included on Form 1040A. 2012 tax returns Your expected additional taxes from Form 8814, Parents' Election To Report Child's Interest and Dividends, and Form 4972, Tax on Lump-Sum Distributions. 2012 tax returns Any recapture of education credits. 2012 tax returns Step 3. 2012 tax returns   Subtract your expected credits (line 9). 2012 tax returns If you are using your 2013 return as a guide and filed Form 1040, your total credits for 2013 were shown on line 54. 2012 tax returns If you filed Form 1040A, your total credits for 2013 were on line 34. 2012 tax returns   If your credits on line 9 are more than your taxes on line 8, enter “-0-” on line 10 and go to Step 4. 2012 tax returns Step 4. 2012 tax returns   Add your expected self-employment tax (line 11). 2012 tax returns You already should have figured your self-employment tax (see Self-employed under Expected AGI—Line 1, earlier). 2012 tax returns Step 5. 2012 tax returns   Add your expected other taxes (line 12). 2012 tax returns   Other taxes include the following. 2012 tax returns 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. 2012 tax returns 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. 2012 tax returns Amounts written on Form 1040 on the line for “other taxes” (line 60 on the 2013 Form 1040). 2012 tax returns 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. 2012 tax returns Repayment of the first-time homebuyer credit. 2012 tax returns See Form 5405. 2012 tax returns Additional Medicare Tax. 2012 tax returns A 0. 2012 tax returns 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. 2012 tax returns 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. 2012 tax returns A self-employment loss should not be considered for purposes of this tax. 2012 tax returns RRTA compensation should be separately compared to the threshold. 2012 tax returns Your employer is responsible for withholding the 0. 2012 tax returns 9% Additional Medicare Tax on Medicare wages or RRTA compensation it pays to you in excess of $200,000 in 2014. 2012 tax returns You should consider this withholding, if applicable, in determining whether you need to make an estimated payment. 2012 tax returns For more information on Additional Medicare Tax, go to IRS. 2012 tax returns gov and enter “Additional Medicare Tax” in the search box. 2012 tax returns Net Investment Income Tax (NIIT). 2012 tax returns The NIIT is 3. 2012 tax returns 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. 2012 tax returns 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. 2012 tax returns gov and enter “Net Investment Income Tax” in the search box. 2012 tax returns Step 6. 2012 tax returns   Subtract your refundable credit (line 13b). 2012 tax returns   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. 2012 tax returns   The result of steps 1 through 6 is your total estimated tax for 2014 (line 13c). 2012 tax returns 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. 2012 tax returns General rule. 2012 tax returns   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. 2012 tax returns Your 2013 tax return must cover all 12 months. 2012 tax returns Special rules. 2012 tax returns   There are special rules for higher income taxpayers and for farmers and fishermen. 2012 tax returns Higher income taxpayers. 2012 tax returns   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. 2012 tax returns This rule does not apply to farmers and fishermen. 2012 tax returns For 2013, AGI is the amount shown on Form 1040, line 37; Form 1040A, line 21; and Form 1040EZ, line 4. 2012 tax returns Example. 2012 tax returns   Jeremy Martin's total tax on his 2013 return was $42,581, and his expected tax for 2014 is $71,253. 2012 tax returns His 2013 AGI was $180,000. 2012 tax returns Because Jeremy had more than $150,000 of AGI in 2013, he figures his required annual payment as follows. 2012 tax returns He determines that 90% of his expected tax for 2014 is $64,128 (. 2012 tax returns 90 × $71,253). 2012 tax returns Next, he determines that 110% of the tax shown on his 2013 return is $46,839 (1. 2012 tax returns 10 x $42,581). 2012 tax returns Finally, he determines that his required annual payment is $46,839, the smaller of the two. 2012 tax returns Farmers and fishermen. 2012 tax returns   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% (. 2012 tax returns 6667) of your total tax for 2014, or 100% of the total tax shown on your 2013 return. 2012 tax returns (Your 2013 tax return must cover all 12 months. 2012 tax returns )   For definitions of “gross income from farming” and “gross income from fishing,” see Farmers and Fishermen , under Special Rules discussed earlier. 2012 tax returns Total tax for 2013—line 14b. 2012 tax returns   Your 2013 total tax, if you filed Form 1040, is the amount on line 61 reduced by the following. 2012 tax returns Unreported social security and Medicare tax or RRTA tax from Forms 4137 or 8919 (line 57). 2012 tax returns The following amounts from Form 5329 included on line 58. 2012 tax returns Any tax on excess contributions to IRAs, Archer MSAs, Coverdell education savings accounts, and health savings accounts. 2012 tax returns Any tax on excess accumulations in qualified retirement plans. 2012 tax returns The following write-ins on line 60. 2012 tax returns Excise tax on excess golden parachute payments (identified as “EPP”). 2012 tax returns Excise tax on insider stock compensation from an expatriated corporation (identified as “ISC”). 2012 tax returns Look-back interest due under section 167(g) (identified as “From Form 8866”). 2012 tax returns Look-back interest due under section 460(b) (identified as “From Form 8697”). 2012 tax returns Recapture of federal mortgage subsidy (identified as “FMSR”). 2012 tax returns Additional tax on advance payments of health coverage tax credit when not eligible (identified as “HCTC”). 2012 tax returns Uncollected social security and Medicare tax or RRTA tax on tips or group-term life insurance (identified as “UT”). 2012 tax returns Any refundable credit amounts. 2012 tax returns   If you filed Form 1040A, your 2013 total tax is the amount on line 35 reduced by any refundable credits. 2012 tax returns   If you filed Form 1040EZ, your 2013 total tax is the amount on line 10 reduced by the amount on line 8a. 2012 tax returns 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. 2012 tax returns Subtract your expected withholding from your required annual payment (line 14c). 2012 tax returns You usually must pay this difference in four equal installments. 2012 tax returns See When To Pay Estimated Tax and How To Figure Each Payment . 2012 tax returns 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. 2012 tax returns Withholding—line 15. 2012 tax returns   Your expected withholding for 2014 (line 15) includes the income tax you expect to be withheld from all sources (wages, pensions and annuities, etc. 2012 tax returns ). 2012 tax returns It includes excess social security, and tier 1 railroad retirement tax you expect to be withheld from your wages and compensation. 2012 tax returns 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. 2012 tax returns See Excess Social Security or Railroad Retirement Tax Withholding in chapter 3. 2012 tax returns   It also includes Additional Medicare Tax you expect to be withheld from your wages or compensation. 2012 tax returns Your employer is responsible for withholding the 0. 2012 tax returns 9% Additional Medicare Tax on Medicare wages or RRTA compensation it pays to you in excess of $200,000. 2012 tax returns When To Pay Estimated Tax For estimated tax purposes, the year is divided into four payment periods. 2012 tax returns Each period has a specific payment due date. 2012 tax returns 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. 2012 tax returns If a payment is mailed, the date of the U. 2012 tax returns S. 2012 tax returns postmark is considered the date of payment. 2012 tax returns The payment periods and due dates for estimated tax payments are shown next. 2012 tax returns For exceptions to the dates listed, see Saturday, Sunday, holiday rule below. 2012 tax returns For the period: Due date: Jan. 2012 tax returns 11 – March 31 April 15 April 1 – May 31 June 16 June 1 – August 31 September 15 Sept. 2012 tax returns 1 – Dec. 2012 tax returns 31 January 15  next year2 1If your tax year does not begin on January 1,  see Fiscal year taxpayers . 2012 tax returns 2See January payment . 2012 tax returns Saturday, Sunday, holiday rule. 2012 tax returns   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. 2012 tax returns January payment. 2012 tax returns   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. 2012 tax returns Example. 2012 tax returns Janet Adams does not pay any estimated tax for 2014. 2012 tax returns She files her 2014 income tax return and pays the balance due shown on her return on January 26, 2015. 2012 tax returns Janet's estimated tax for the fourth payment period is considered to have been paid on time. 2012 tax returns However, she may owe a penalty for not making the first three estimated tax payments, if required. 2012 tax returns Any penalty for not making those payments will be figured up to January 26, 2015. 2012 tax returns Fiscal year taxpayers. 2012 tax returns   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. 2012 tax returns   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. 2012 tax returns When To Start You do not have to make estimated tax payments until you have income on which you will owe income tax. 2012 tax returns 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. 2012 tax returns You have several options when paying estimated taxes. 2012 tax returns 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. 2012 tax returns If you choose to pay in installments, make your first payment by the due date for the first payment period. 2012 tax returns Make your remaining installment payments by the due dates for the later periods. 2012 tax returns To avoid any estimated tax penalties, all installments must be paid by their due date and for the required amount. 2012 tax returns No income subject to estimated tax during first period. 2012 tax returns   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. 2012 tax returns 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. 2012 tax returns Table 2-1 shows the dates for making installment payments. 2012 tax returns    Table 2-1. 2012 tax returns 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. 2012 tax returns 15     Jan. 2012 tax returns 15 next year April 1–May 31 June 16 Sept. 2012 tax returns 15     Jan. 2012 tax returns 15 next year June 1–Aug. 2012 tax returns 31 Sept. 2012 tax returns 15 Jan. 2012 tax returns 15 next year After Aug. 2012 tax returns 31 Jan. 2012 tax returns 15 next year (None) *See January payment and Saturday, Sunday, holiday rule . 2012 tax returns How much to pay to avoid penalty. 2012 tax returns   To determine how much you should pay by each payment due date, see How To Figure Each Payment , later. 2012 tax returns 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. 2012 tax returns The due dates for the first three payment periods, discussed under When To Pay Estimated Tax , earlier, do not apply to you. 2012 tax returns 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. 2012 tax returns Fiscal year farmers and fishermen. 2012 tax returns   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. 2012 tax returns 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. 2012 tax returns You should pay enough by each due date to avoid a penalty for that period. 2012 tax returns 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. 2012 tax returns The penalty is discussed in chapter 4. 2012 tax returns 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. 2012 tax returns Enter this amount on line 17. 2012 tax returns However, use this method only if your income is basically the same throughout the year. 2012 tax returns Change in estimated tax. 2012 tax returns   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. 2012 tax returns 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. 2012 tax returns If you do not receive your income evenly throughout the year, your required estimated tax payments may not be the same for each period. 2012 tax returns See Annualized Income Installment Method . 2012 tax returns Amended estimated tax. 2012 tax returns 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. 2012 tax returns Example. 2012 tax returns Early in 2014, Mira Roberts figures that her estimated tax due is $1,800. 2012 tax returns She makes estimated tax payments on April 15 and June 16 of $450 each ($1,800 ÷ 4). 2012 tax returns On July 10, she sells investment property at a gain. 2012 tax returns Her refigured estimated tax is $4,100. 2012 tax returns Her required estimated tax payment for the third payment period is $2,175, as shown in her filled-in Worksheet 2-14. 2012 tax returns If Mira's estimated tax does not change again, her required estimated tax payment for the fourth payment period will be $1,025. 2012 tax returns Worksheet 2-14. 2012 tax returns Amended Estimated Tax Worksheet—Illustrated               1. 2012 tax returns Amended total estimated tax due 1. 2012 tax returns $4,100 2. 2012 tax returns Multiply line 1 by:           50% (. 2012 tax returns 50) if next payment is due June 16, 2014           75% (. 2012 tax returns 75) if next payment is due September 15,  2014           100% (1. 2012 tax returns 00) if next payment is due January 15,  2015 2. 2012 tax returns 3,075     3. 2012 tax returns Estimated tax payments for all previous periods 3. 2012 tax returns 900     4. 2012 tax returns 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. 2012 tax returns $2,175       Note. 2012 tax returns If the payment on line 4 is due January 15, 2015, stop here. 2012 tax returns Otherwise, go to line 5. 2012 tax returns         5. 2012 tax returns Add lines 3 and 4 5. 2012 tax returns 3,075 6. 2012 tax returns Subtract line 5 from line 1 and enter the result (but not less than zero) 6. 2012 tax returns 1,025 7. 2012 tax returns 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. 2012 tax returns 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. 2012 tax returns $1,025 Worksheet 2-14. 2012 tax returns Amended Estimated Tax Worksheet—Blank               1. 2012 tax returns Amended total estimated tax due 1. 2012 tax returns   2. 2012 tax returns Multiply line 1 by:           50% (. 2012 tax returns 50) if next payment is due June 16, 2014           75% (. 2012 tax returns 75) if next payment is due September 15,  2014           100% (1. 2012 tax returns 00) if next payment is due January 15,  2015 2. 2012 tax returns       3. 2012 tax returns Estimated tax payments for all previous periods 3. 2012 tax returns       4. 2012 tax returns 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. 2012 tax returns         Note. 2012 tax returns If the payment on line 4 is due January 15, 2015, stop here. 2012 tax returns Otherwise, go to line 5. 2012 tax returns         5. 2012 tax returns Add lines 3 and 4 5. 2012 tax returns   6. 2012 tax returns Subtract line 5 from line 1 and enter the result (but not less than zero) 6. 2012 tax returns   7. 2012 tax returns 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. 2012 tax returns 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. 2012 tax returns   Underpayment penalty. 2012 tax returns   The penalty is figured separately for each payment period. 2012 tax returns 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. 2012 tax returns To see how you may be able to avoid or reduce this penalty, see Annualized Income Installment Method (Schedule AI) in chapter 4. 2012 tax returns 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. 2012 tax returns 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. 2012 tax returns To see whether you can pay less for any period, complete the 2014 Annualized Estimated Tax Worksheet (Worksheet 2-9). 2012 tax returns You first must complete the 2014 Estimated Tax Worksheet (Worksheet 2-1) through line 16b. 2012 tax returns Use the result you figure on line 32 of Worksheet 2-9 to make your estimated tax payments and complete your payment vouchers. 2012 tax returns Note. 2012 tax returns If you use the annualized income installment method to figure your estimated tax payments, you must file Form 2210 with your 2014 tax return. 2012 tax returns See Annualized Income Installment Method (Schedule AI) in chapter 4 for more information. 2012 tax returns Instructions for the 2014 Annualized Estimated Tax Worksheet (Worksheet 2-9) Use Worksheet 2-9 to help you follow these instructions. 2012 tax returns 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. 2012 tax returns The top of the worksheet shows the dates for each payment period. 2012 tax returns The periods build; that is, each period includes all previous periods. 2012 tax returns After the end of each payment period, complete the corresponding worksheet column to figure the payment due for that period. 2012 tax returns Line 1. 2012 tax returns   Enter your AGI for the period. 2012 tax returns 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. 2012 tax returns See Expected AGI—Line 1 , earlier. 2012 tax returns Self-employment income. 2012 tax returns   If you had self-employment income, first complete Section B of this worksheet. 2012 tax returns Use the amounts on line 43 when figuring your expected AGI to enter in each column of Section A, line 1. 2012 tax returns Line 4. 2012 tax returns   Be sure to consider all deduction limits figured on Schedule A (Form 1040), such as reducing your medical expenses by 10% (7. 2012 tax returns 5% if either you or your spouse was born before January 2, 1950) or reducing certain miscellaneous deductions by 2% of your AGI. 2012 tax returns Figure your deduction limits using your expected AGI in the corresponding column of line 1 (2014 Annualized Estimated Tax Worksheet (Worksheet 2-9)). 2012 tax returns Line 6. 2012 tax returns   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. 2012 tax returns In that case, use Worksheet 2-10 to figure the amount to enter on line 6. 2012 tax returns Complete Worksheet 2–10 for each period, as necessary. 2012 tax returns Line 7. 2012 tax returns   If you will not itemize your deductions, use Worksheet 2-4 to figure your standard deduction. 2012 tax returns Line 10. 2012 tax returns   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. 2012 tax returns   In that case, use Worksheet 2-11 to figure the amount to enter on line 10. 2012 tax returns Line 12. 2012 tax returns   Generally, you will use the Tax Rate Schedules to figure the tax on your annualized income. 2012 tax returns However, see below for situations where you must use a different method to compute your estimated tax. 2012 tax returns Tax on child's investment income. 2012 tax returns   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. 2012 tax returns Children under age 18 at the end of 2014. 2012 tax returns The following children if their earned income is not more than half their support. 2012 tax returns Children age 18 at the end of 2014. 2012 tax returns Children who are full-time students over age 18 and under age 24 at the end of 2014. 2012 tax returns See Publication 929. 2012 tax returns Tax on net capital gain. 2012 tax returns   The regular income tax rates for individuals do not apply to a net capital gain. 2012 tax returns Instead, your net capital gain is taxed at a lower maximum rate. 2012 tax returns   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. 2012 tax returns Tax on qualified dividends and capital gains. 2012 tax returns   For 2014, your capital gain and dividends rate will depend on your income. 2012 tax returns Tax on capital gain or qualified dividends. 2012 tax returns 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. 2012 tax returns Tax if excluding foreign earned income or excluding or deducting foreign housing. 2012 tax returns 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. 2012 tax returns Line 13. 2012 tax returns   If you file Form 1040, add the tax from Forms 8814, 4972, and 6251 for the period. 2012 tax returns If you file Form 1040A, add the amount from the Alternative Minimum Tax Worksheet found in the instructions. 2012 tax returns Also include any recapture of an education credit for each period. 2012 tax returns 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. 2012 tax returns   Use the 2013 forms or worksheets to see if you will owe any of the taxes discussed above. 2012 tax returns Figure the tax based on your income and deductions during the period shown in the column headings. 2012 tax returns Multiply this amount by the annualization amounts shown for each column on line 2 of the 2014 Annualized Estimated Tax Worksheet (Worksheet 2-9). 2012 tax returns Enter the result on line 13 of this worksheet. 2012 tax returns Line 15. 2012 tax returns   Include all the nonrefundable credits you expect to claim because of events that will occur during the period. 2012 tax returns Note. 2012 tax returns When figuring your credits for each period, annualize any item of income or deduction to figure each credit. 2012 tax returns 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. 2012 tax returns Line 18. 2012 tax returns   Add your expected other taxes. 2012 tax returns   Other taxes include the following. 2012 tax returns 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. 2012 tax returns 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. 2012 tax returns Amounts on Form 1040 written on the line for “other taxes” (line 60 on the 2013 Form 1040). 2012 tax returns 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. 2012 tax returns Repayment of the first-time homebuyer credit if the home will cease to be your main home in 2014. 2012 tax returns See Form 5405 for exceptions. 2012 tax returns Additional Medicare Tax. 2012 tax returns A 0. 2012 tax returns 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. 2012 tax returns 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. 2012 tax returns A self-employment loss should not be considered for purposes of this tax. 2012 tax returns RRTA compensation should be separately compared to the threshold. 2012 tax returns Your employer is responsible for withholding the 0. 2012 tax returns 9% Additional Medicare Tax on Medicare wages or RRTA compensation it pays you in excess of $200,000 in 2014. 2012 tax returns You should consider this withholding, if applicable, in determining whether you need to make an estimated payment. 2012 tax returns For more information on Additional Medicare Tax, go to IRS. 2012 tax returns gov and enter “Additional Medicare Tax” in the search box. 2012 tax returns Net Investment Income Tax (NIIT). 2012 tax returns The NIIT is 3. 2012 tax returns 8% of the lesser of your net investment income or the excess of your modified adjusted gross income over a specified threshold amount. 2012 tax returns 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. 2012 tax returns gov and enter “Net Investment Income Tax” in the search box. 2012 tax returns Line 20. 2012 tax returns   Include all the refundable credits (other than withholding credits) you can claim because of events that occurred during the period. 2012 tax returns Note. 2012 tax returns When figuring your refundable credits for each period, annualize any item of income or deduction used to figure each credit. 2012 tax returns Line 29. 2012 tax returns   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. 2012 tax returns Line 31. 2012 tax returns   For each period, include estimated tax payments made and any excess social security and railroad retirement tax. 2012 tax returns   Also include estimated federal income tax withholding. 2012 tax returns One-fourth of your estimated withholding is considered withheld on the due date of each payment period. 2012 tax returns To figure the amount to include on line 31 for each period, multiply your total expected withholding for 2014 by: 25% (. 2012 tax returns 25) for the first period, 50% (. 2012 tax returns 50) for the second period, 75% (. 2012 tax returns 75) for the third period, and 100% (1. 2012 tax returns 00) for the fourth period. 2012 tax returns   However, you may choose to include your withholding according to the actual dates on which the amounts will be withheld. 2012 tax returns For each period, include withholding made from the beginning of the period up to and including the payment due date. 2012 tax returns You can make this choice separately for the taxes withheld from your wages and all other withholding. 2012 tax returns For an explanation of what to include in withholding, see Total Estimated Tax Payments Needed—Line 16a , earlier. 2012 tax returns Nonresident aliens. 2012 tax returns   If you will file Form 1040NR and you do not receive wages as an employee subject to U. 2012 tax returns S. 2012 tax returns income tax withholding, the instructions for the worksheet are modified as follows. 2012 tax returns Skip column (a). 2012 tax returns On line 1, enter your income for the period that is effectively connected with a U. 2012 tax returns S. 2012 tax returns trade or business. 2012 tax returns 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. 2012 tax returns S. 2012 tax returns trade or business by the following. 2012 tax returns 72% for column (b). 2012 tax returns 45% for column (c). 2012 tax returns 30% for column (d). 2012 tax returns However, if you can use a treaty rate lower than 30%, use the percentages determined by multiplying your treaty rate by 2. 2012 tax returns 4, 1. 2012 tax returns 5, and 1, respectively. 2012 tax returns 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. 2012 tax returns On lines 24 and 27, skip column (b). 2012 tax returns 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). 2012 tax returns See Publication 519 for more information. 2012 tax returns 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. 2012 tax returns 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. 2012 tax returns How To Pay Estimated Tax There are several ways to pay estimated tax. 2012 tax returns Credit an overpayment on your 2013 return to your 2014 estimated tax. 2012 tax returns Pay by direct transfer from your bank account, or pay by credit or debit card using a pay-by-phone system or the Internet. 2012 tax returns Send in your payment (check or money order) with a payment voucher from Form 1040-ES. 2012 tax returns 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. 2012 tax returns On Form 1040, or Form 1040A, enter the amount you want credited to your estimated tax rather than refunded. 2012 tax returns Take the amount you have credited into account when figuring your estimated tax payments. 2012 tax returns If you timely file your 2013 return, treat the credit as a payment made on April 15, 2014. 2012 tax returns 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. 2012 tax returns 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. 2012 tax returns You also cannot use that overpayment in any other way. 2012 tax returns Example. 2012 tax returns When Kathleen finished filling out her 2013 tax return, she saw that she had overpaid her taxes by $750. 2012 tax returns Kathleen knew she would owe additional tax in 2014. 2012 tax returns She credited $600 of the overpayment to her 2014 estimated tax and had the remaining $150 refunded to her. 2012 tax returns In September, she amended her 2013 return by filing Form 1040X, Amended U. 2012 tax returns S. 2012 tax returns Individual Income Tax Return. 2012 tax returns It turned out that she owed $250 more in tax than she had thought. 2012 tax returns This reduced her 2013 overpayment from $750 to $500. 2012 tax returns 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. 2012 tax returns Kathleen could not use any of the $600 she had credited to her 2014 estimated tax to pay this bill. 2012 tax returns Pay Online Paying online is convenient and secure and helps make sure we get your payments on time. 2012 tax returns You can make your estimated tax payments online when you e-file or at any time during the year. 2012 tax returns You can pay using either of the following electronic payment methods. 2012 tax returns Direct transfer from your bank account. 2012 tax returns Credit or debit card. 2012 tax returns To pay your taxes online or for more information, go to www. 2012 tax returns irs. 2012 tax returns gov/e-pay. 2012 tax returns Pay by Phone Paying by phone is another safe and secure method of paying electronically. 2012 tax returns Use one of the following methods. 2012 tax returns Direct transfer from your bank account. 2012 tax returns Credit or debit card. 2012 tax returns 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. 2012 tax returns To pay using a credit or debit card, you can call one of the following service providers. 2012 tax returns There is a convenience fee charged by these providers that varies by provider, card type, and payment amount. 2012 tax returns WorldPay 1-888-9-PAY-TAXTM (1-888-972-9829) www. 2012 tax returns payUSAtax. 2012 tax returns com Official Payments Corporation 1-888-UPAY-TAXTM (1-888-872-9829) www. 2012 tax returns officialpayments. 2012 tax returns com Link2GOV Corporation 1-888-PAY-1040TM (1-888-729-1040) www. 2012 tax returns PAY1040. 2012 tax returns com For the latest details on how to pay by phone, go to www. 2012 tax returns irs. 2012 tax returns gov/e-pay. 2012 tax returns 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. 2012 tax returns 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. 2012 tax returns Do not use the address shown in the Form 1040 or Form 1040A instructions. 2012 tax returns If you did not pay estimated tax last year, get a copy of Form 1040-ES from the IRS (see chapter 5). 2012 tax returns Follow the instructions to make sure you use the vouchers correctly. 2012 tax returns Joint estimated tax payments. 2012 tax returns    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. 2012 tax returns Change of address. 2012 tax returns    You must notify the IRS if you are making estimated tax payments and you changed your address during the year. 2012 tax returns Complete Form 8822, Change of Address, and mail it to the address shown in the instructions for that form. 2012 tax returns Worksheets for Chapter 2 Use the following worksheets and tables to figure your correct estimated tax. 2012 tax returns IF you need. 2012 tax returns . 2012 tax returns . 2012 tax returns THEN use. 2012 tax returns . 2012 tax returns . 2012 tax returns 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. 2012 tax returns Use them only to figure your 2014 estimated taxes. 2012 tax returns 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. 2012 tax returns 0%   $0 $0 $12,950     10. 2012 tax returns 0%   $0 9,075 36,900 $907. 2012 tax returns 50 + 15. 2012 tax returns 0%   9,075 12,950 49,400 $1,295. 2012 tax returns 00 + 15. 2012 tax returns 0%   12,950 36,900 89,350 5,081. 2012 tax returns 25 + 25. 2012 tax returns 0%   36,900 49,400 127,550 6,762. 2012 tax returns 50 + 25. 2012 tax returns 0%   49,400 89,350 186,350 18,193. 2012 tax returns 75 + 28. 2012 tax returns 0%   89,350 127,550 206,600 26,300. 2012 tax returns 00 + 28. 2012 tax returns 0%   127,550 186,350 405,100 45,353. 2012 tax returns 75 + 33. 2012 tax returns 0%   186,350 206,600 405,100 48,434. 2012 tax returns 00 + 33. 2012 tax returns 0%   206,600 405,100 406,750 117,541. 2012 tax returns 25 + 35. 2012 tax returns 0%   405,100 405,100 432,200 113,939. 2012 tax returns 00 + 35. 2012 tax returns 0%   405,100 406,750 - - - - - - 118,118. 2012 tax returns 75 + 39. 2012 tax returns 6%   406,750 432,200 - - - - - - 123,424. 2012 tax returns 00 + 39. 2012 tax returns 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. 2012 tax returns 0%   $0 $0 $9,075     10. 2012 tax returns 0%   $0 18,150 73,800 $1,815. 2012 tax returns 00 + 15. 2012 tax returns 0%   18,150 9,075 36,900 $907. 2012 tax returns 50 + 15. 2012 tax returns 0%   9,075 73,800 148,850 10,162. 2012 tax returns 50 + 25. 2012 tax returns 0%   73,800 36,900 74,425 5,081. 2012 tax returns 25 + 25. 2012 tax returns 0%   36,900 148,850 226,850 28,925. 2012 tax returns 00 + 28. 2012 tax returns 0%   148,850 74,425 113,425 14,462. 2012 tax returns 50 + 28. 2012 tax returns 0%   74,425 226,850 405,100 50,765. 2012 tax returns 00 + 33. 2012 tax returns 0%   226,850 113,425 202,550 25,382. 2012 tax returns 50 + 33. 2012 tax returns 0%   113,425 405,100 457,600 109,587. 2012 tax returns 50 + 35. 2012 tax returns 0%   405,100 202,550 228,800 54,793. 2012 tax returns 75 + 35. 2012 tax returns 0%   202,550 457,600 - - - - - - 127,962. 2012 tax returns 50 + 39. 2012 tax returns 6%   457,600 228,800 - - - - - - 63,981. 2012 tax returns 25 + 39. 2012 tax returns 6%   228,800                             Worksheet 2-1. 2012 tax returns 2014 Estimated Tax Worksheet When this worksheet refers you to instructions, you can find those instructions in the Instructions for 2014 Form 1040-ES. 2012 tax returns 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. 2012 tax returns  Caution: If line 1 is over $152,525, your deduction may be reduced. 2012 tax returns See Worksheet 2-5. 2012 tax returns If you do not plan to itemize deductions, enter your standard deduction. 2012 tax returns 2     3 Subtract line 2 from line 1 3     4 Exemptions. 2012 tax returns Multiply $3,950 by the number of personal exemptions. 2012 tax returns  Caution: If line 1 is over $152,525, the amount of your personal exemptions may be limited. 2012 tax returns See Worksheet 2-6. 2012 tax returns 4     5 Subtract line 4 from line 3 5     6 Tax. 2012 tax returns 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. 2012 tax returns Add to this amount any other taxes you expect to include in the total on Form 1040, line 44 8     9 Credits (see instructions). 2012 tax returns Do not include any income tax withholding on this line 9     10 Subtract line 9 from line 8. 2012 tax returns 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. 2012 tax returns Subtract line 13b from line 13a. 2012 tax returns 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. 2012 tax returns 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. 2012 tax returns To avoid a penalty, make sure your estimate on line 13c is as accurate as possible. 2012 tax returns Even if you pay the required annual payment, you may still owe tax when you file your return. 2012 tax returns If you prefer, you can pay the amount shown on line 13c. 2012 tax returns                         15 Income tax withheld and estimated to be withheld during 2014 (including income tax withholding on pensions, annuities, certain deferred income, etc. 2012 tax returns ) 15     16a Subtract line 15 from line 14c 16a             Is the result zero or less? □ Yes. 2012 tax returns Stop here. 2012 tax returns You are not required to make estimated tax payments. 2012 tax returns  □ No. 2012 tax returns Go to line 16b. 2012 tax returns             b Subtract line 15 from line 13c 16b             Is the result less than $1,000? □ Yes. 2012 tax returns Stop here. 2012 tax returns You are not required to make estimated tax payments. 2012 tax returns  □ No. 2012 tax returns Go to line 17 to figure your required payment. 2012 tax returns                         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. 2012 tax returns 2014 Estimated Tax Worksheet—Line 1 Estimated Taxable Social Security and Railroad Retirement Benefits Note. 2012 tax returns 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. 2012 tax returns     1. 2012 tax returns Enter your expected social security and railroad retirement benefits 1. 2012 tax returns   2. 2012 tax returns Enter one-half of line 1 2. 2012 tax returns   3. 2012 tax returns Enter your expected total income. 2012 tax returns Do not include any social security and railroad retirement benefits, nontaxable interest income, nontaxable IRA distributions, or nontaxable pension distributions 3. 2012 tax returns   4. 2012 tax returns Enter your expected nontaxable interest income 4. 2012 tax returns   5. 2012 tax returns Enter (as a positive amount) the total of any expected exclusions or deductions for: U. 2012 tax returns S. 2012 tax returns 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. 2012 tax returns   6. 2012 tax returns Add lines 2, 3, 4, and 5 6. 2012 tax returns   7. 2012 tax returns Enter your expected adjustments to income. 2012 tax returns Do not include any student loan interest deduction 7. 2012 tax returns   8. 2012 tax returns Subtract line 7 from line 6. 2012 tax returns If zero or less, stop here. 2012 tax returns  Note. 2012 tax returns 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. 2012 tax returns   9. 2012 tax returns 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. 2012 tax returns   10. 2012 tax returns Subtract line 9 from line 8. 2012 tax returns If zero or less, stop here. 2012 tax returns  Note. 2012 tax returns 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. 2012 tax returns   11. 2012 tax returns 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. 2012 tax returns   12. 2012 tax returns Subtract line 11 from line 10. 2012 tax returns If zero or less, enter -0- 12. 2012 tax returns   13. 2012 tax returns Enter the smaller of line 10 or line 11 13. 2012 tax returns   14. 2012 tax returns Enter one-half of line 13 14. 2012 tax returns   15