Department

of the

Treasury

Internal

Revenue

Service

May 15, 2019

Publication 505

Cat. No. 15008E

Tax

Withholding

and Estimated

Tax

For use in 2019


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Contents

Introduction . . . . . . . . . . . . . . . . . . 1 What's New for 2019 . . . . . . . . . . . . . 2 Reminders . . . . . . . . . . . . . . . . . . . 2

Chapter 1. Tax Withholding

for 2019 . . . . . . . . . . . . . . . . . . 2

Salaries and Wages. . . . . . . . . . . 3

Tips. . . . . . . . . . . . . . . . . . . 11

Taxable Fringe Benefits . . . . . . . . 11

Sick Pay . . . . . . . . . . . . . . . . . 11

Pensions and Annuities. . . . . . . . 12

Gambling Winnings. . . . . . . . . . 12

Unemployment Compensation. . . . 13

Federal Payments. . . . . . . . . . . 13

Backup Withholding. . . . . . . . . . 13

Chapter 2. Estimated Tax for 2019 . . . 21

Who Does Not Have To Pay

Estimated Tax. . . . . . . . . . . 21

Who Must Pay Estimated Tax . . . . . 21

How To Figure Estimated Tax. . . . 23

When To Pay Estimated Tax. . . . . 25

How To Figure Each Payment. . . . 26

How To Pay Estimated Tax. . . . . . 29

Chapter 3. Credit for Withholding

and Estimated Tax for 2018. . . . 43

Withholding . . . . . . . . . . . . . . . 43

Estimated Tax. . . . . . . . . . . . . 44

Excess Social Security or

Railroad Retirement Tax

Withholding . . . . . . . . . . . . . 45

Chapter 4. Underpayment Penalty

for 2018 . . . . . . . . . . . . . . . . . 47

General Rule. . . . . . . . . . . . . . 47

Exceptions. . . . . . . . . . . . . . . 48

Figuring Your Required Annual

Payment (Part I). . . . . . . . . . 49

Short Method for Figuring the

Penalty (Part III). . . . . . . . . . 49

Regular Method for Figuring the

Penalty (Part IV). . . . . . . . . . 49

Annualized Income Installment

Method (Schedule AI). . . . . . . 52

Farmers and Fishermen . . . . . . . . 52

Waiver of Penalty . . . . . . . . . . . . 52

How To Get Tax Help. . . . . . . . . . . 55

Index. . . . . . . . . . . . . . . . . . . . . 56

Introduction

The federal income tax is a pay-as-you-go tax. You must pay the tax as you earn or receive in-come during the year. There are two ways to pay as you go.

Withholding. If you are an employee, your employer probably withholds income tax from your pay. In addition, tax may be with-held from certain other income, such as pensions, bonuses, commissions, and gambling winnings. The amount withheld is paid to the IRS in your name.

Estimated tax. If you don’t pay your tax through withholding, or don’t pay enough

tax that way, you might have to pay esti-mated tax. People who are in business for themselves generally will have to pay their tax this way. You may have to pay estima-ted tax if you receive income such as divi-dends, interest, capital gains, rents, and royalties. Estimated tax is used to pay not only income tax, but other taxes such as self-employment tax and alternative mini-mum tax.

This publication explains both of these meth-ods. It also explains how to take credit on your return for the tax that was withheld and for your estimated tax payments.

If you didn’t pay enough tax during the year, either through withholding or by making estima-ted tax payments, you may have to pay a pen-alty. Generally, the IRS can figure this penalty for you.

Nonresident aliens. Before completing Form W-4, Employee's Withholding Allowance Certificate, nonresident alien employees should see the Instructions for Form 8233, Exemption From Withholding on Compensation for Inde-pendent (and Certain Dependent) Personal Services of a Nonresident Alien Individual. Also see chapter 8 of Pub. 519, U.S. Tax Guide for Aliens, for important information on withholding.

Comments and suggestions. We welcome your comments about this publication and your suggestions for future editions.

You can send us comments from IRS.gov/ FormComments.

Or you can write to:

Internal Revenue Service Tax Forms and Publications

1111 Constitution Ave. NW, IR-6526 Washington, DC 20224

Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products.

Ordering forms and publications. Visit IRS.gov/FormsPubs to download forms and publications. Otherwise, you can go to IRS.gov/ OrderForms to order current and prior-year forms and instructions. Your order should arrive within 10 business days.

Tax questions. If you have a tax question not answered by this publication, check IRS.gov and How To Get Tax Help at the end of this publication.

increased for all filers, and the amounts are as follows.

Single or Married Filing Sepa-rately—$12,200.

Married Filing Jointly or Qualifying Widow(er)—$24,400.

Head of Household—$18,350.

Due to the increase in the standard deduc-tion and reduced usage of itemized deductions, you may want to consider filing a new Form W-4.

Lifetime learning credit income limits. In or-der to claim a lifetime learning credit, your modi-fied adjusted gross income (MAGI) must be less than $58,000 ($116,000 if married filing jointly).

Retirement savings contribution credit in-come limits increased. In order to claim this credit for 2019, your MAGI must be less than $32,000 ($64,000 if married filing jointly; $48,000 if head of household).

Adoption credit or exclusion. The maximum adoption credit or exclusion for employer-provi-ded adoption benefits has increased to $14,080. In order to claim either the credit or ex-clusion, your MAGI must be less than $251,160.

Earned income credit (EIC). You may be able to take the EIC in 2019 if:

Three or more children lived with you and you earned less than $50,162 ($55,952 if married filing jointly),

Two children lived with you and you earned less than $46,703 ($52,493 if mar-ried filing jointly),

One child lived with you and you earned less than $41,094 ($46,884 if married filing jointly), or

A child didn’t live with you and you earned less than $15,570 ($21,370 if married filing jointly).

Also, the maximum MAGI you can have and still get the credit has increased. You may be able to take the credit if your MAGI is less than the amount in the above list that applies to you. The maximum investment income you can have and get the credit is $3,600 for 2019.

Reminders

Future developments. The IRS has created a page on IRS.gov for information about Pub. 505 at IRS.gov/Pub505. Information about any fu-ture developments affecting Pub. 505 (such as legislation enacted after we release it) will be posted on that page.

Health Insurance Marketplace, you may be eli-gible to have advance payments of the pre-mium tax credit paid on your behalf to the insur-ance company. Receiving too little or too much in advance will affect your refund or balance due. Promptly report changes in your income or family size to your Marketplace. See Form 8962 and its instructions for more information.

Additional Medicare Tax. Generally, a 0.9% Additional Medicare Tax applies to Medicare wages, Railroad Retirement Tax Act compen-sation, and self-employment income, over $200,000 if you are filing as single, head of household, or qualifying widow(er), over $250,000, if you are married filing jointly, and over $125,000 if you are married filing sepa-rately. You may need to include this amount when figuring your estimated tax. You also may request that your employer deduct and withhold an additional amount of income tax withholding from your wages on Form W-4.

Net Investment Income Tax (NIIT). You may be subject to NIIT. NIIT is a 3.8% tax on the lesser of net investment income or the excess of your MAGI over $200,000 ($250,000 if mar-ried filing jointly or qualifying widow(er); $125,000 if married filing separately). NIIT may need to be included when figuring estimated tax. You also may request that your employer deduct and withhold an additional amount of in-come tax withholding from your wages on Form W-4.

Photographs of missing children. The IRS is a proud partner with the National Center for Missing & Exploited Children® (NCMEC). Pho-tographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

1.

Tax Withholding for 2019

Introduction

What's New for 2019

Use your 2018 tax return as a guide in figuring your 2019 estimated tax, but be sure to consider the following.

No longer a requirement to have minimum essential coverage. Beginning in 2019, you will no longer be required to either have mini-mum essential coverage, claim a coverage ex-emption, or report a shared responsibility pay-ment on Form 1040.

Standard deduction amount increased. For 2019, the standard deduction amount has been

Social security tax. Generally, each employer for whom you work during the tax year must withhold social security tax up to the annual limit. The annual limit is $132,900 in 2019.

Individual taxpayer identification number (ITIN) renewal. If you were assigned an ITIN before January 1, 2013, or if you have an ITIN that you haven’t included on a tax return in the last 3 consecutive years, you may need to re-new it. For more information, see the Instruc-tions for Form W-7.

Advance payments of the premium tax credit. If you buy health insurance through the

This chapter discusses income tax withholding on:

Salaries and wages,

Tips,

Taxable fringe benefits,

Sick pay,

Pensions and annuities,

Gambling winnings,

Unemployment compensation, and

Certain federal payments.

This chapter explains in detail the rules for with-holding tax from each of these types of income. The discussion of salaries and wages includes an explanation of how to complete Form W-4.

Page 2Chapter 1Tax Withholding for 2019

This chapter also covers backup withholding on interest, dividends, and other payments.

Useful Items

You may want to see:

Form (and Instructions)

W-4 Employee's Withholding Allowance Certificate

W-4P Withholding Certificate for Pension or Annuity Payments

W-4S Request for Federal Income Tax Withholding From Sick Pay

W-4V Voluntary Withholding Request

See How To Get Tax Help at the end of this publication for information about getting these publications and forms.

Salaries and Wages

Income tax is withheld from the pay of most em-ployees. Your pay includes your regular pay, bonuses, commissions, and vacation allowan-ces. It also includes reimbursements and other expense allowances paid under a nonaccounta-ble plan. See Supplemental Wages, later, for definitions of accountable and nonaccountable plans.

If your income is low enough that you won’t have to pay income tax for the year, you may be exempt from withholding. This is explained un-der Exemption From Withholding, later.

You can ask your employer to withhold in-come tax from noncash wages and other wages not subject to withholding. If your employer does not agree to withhold tax, or if not enough is withheld, you may have to pay estimated tax, as discussed in chapter 2.

Military retirees. Military retirement pay is treated in the same manner as regular pay for income tax withholding purposes, even though it is treated as a pension or annuity for other tax purposes.

Household workers. If you are a household worker, you can ask your employer to withhold income tax from your pay. A household worker is an employee who performs household work in a private home, local college club, or local fraternity or sorority chapter.

Tax is withheld only if you want it withheld and your employer agrees to withhold it. If you don’t have enough income tax withheld, you may have to pay estimated tax, as discussed in chapter 2.

Farmworkers. Generally, income tax is with-held from your cash wages for work on a farm unless your employer both:

Pays you cash wages of less than $150 during the year, and

Has expenditures for agricultural labor to-taling less than $2,500 during the year.

Differential wage payments. When employ-ees are on leave from employment for military duty, some employers make up the difference between the military pay and civilian pay. Pay-

ments to an employee who is on active duty for a period of more than 30 days will be subject to income tax withholding, but not subject to social security or Medicare taxes. The wages and withholding will be reported on Form W-2, Wage and Tax Statement.

Determining Amount of Tax Withheld Using Form W-4

The amount of income tax your employer with-holds from your regular pay depends on three things.

The amount you earn in each payroll pe-riod.

Your payroll period.

The information you give your employer on Form W-4.

Form W-4 includes four types of information that your employer will use to figure your with-holding.

Whether to withhold at the single rate or at the lower married rate.

How many withholding allowances you claim (each allowance reduces the amount withheld).

Whether you want an additional amount withheld.

Whether you are claiming an exemption from withholding in 2019. See Exemption From Withholding, later.

Note. You must specify a filing status and a number of withholding allowances on Form W-4. You can’t specify only a dollar amount of withholding.

New Job

When you start a new job, you must fill out a Form W-4 and give it to your employer. Your employer should have copies of the form. If you need to change the information later, you must fill out a new form.

If you work only part of the year (for exam-ple, you start working after the beginning of the year), too much tax may be withheld. You may be able to avoid overwithholding if your em-ployer agrees to use the part-year method. See Part-Year Method, later, for more information.

Employee also receiving pension income. If you receive pension or annuity income and be-gin a new job, you will need to file Form W-4 with your new employer. However, you can choose to split your withholding allowances be-tween your pension and job in any manner.

Changing Your Withholding

During the year, changes may occur to your marital status, adjustments, deductions, or credits you expect to claim on your tax return. When this happens, you may need to give your employer a new Form W-4 to change your with-holding status or number of allowances.

If a change in personal circumstances re-duces the withholding allowances you are enti-tled to claim, you are required to give your em-ployer a new Form W-4 by 10 days after the

change occurs reducing your withholding allow-ances. See Marital Status (line 3 of Form W-4) and Withholding Allowances (line 5 of Form W-4), later.

Otherwise, if you want to change your with-holding allowances for any other reason, you can generally do that whenever you wish. See Table 1-1 for examples of personal and finan-cial changes you should consider.

Table 1-1. Personal and Financial
Changes
Factor	Examples
Lifestyle	Marriage
change	Divorce
	Birth or adoption of child
	Purchase of a new home
	Retirement
	Filing chapter 11 bankruptcy
Wage income	You or your spouse start or
	stop working, or start or stop a
	second job
Change in the	Interest income
amount of	Dividends
taxable	Capital gains
income not	Self-employment income
subject to	IRA (including certain Roth
withholding	IRA) distributions
Change in the	IRA deduction
amount of	Student loan interest
adjustments to	deduction
income	Alimony expense
Change in the	Medical expenses
amount of	Taxes
itemized	Interest expense
deductions or	Gifts to charity
tax credits	Dependent care expenses
	Education credit
	Child tax credit
	Earned income credit

If you change the number of your withhold-ing allowances, you can request that your em-ployer withhold using the Cumulative Wage Method, later.

Checking Your Withholding

After you have given your employer a Form W-4, you can check to see whether the amount of tax withheld from your pay is too much or too little. If too much or too little tax is being with-held, you should give your employer a new Form W-4 to change your withholding. You can get a blank Form W-4 from your employer or print the form from IRS.gov.

You can use the IRS Withholding Cal-TIP culator at IRS.gov/W4App instead of the worksheets in this publication or in-cluded with Form W-4 or W-4P to determine

whether you need to have your withholding in-creased or decreased.

You should try to have your withholding match your actual tax liability. If not enough tax is withheld, you will owe tax at the end of the year and may have to pay interest and a pen-alty. If too much tax is withheld, you will lose the

Chapter 1Tax Withholding for 2019Page 3

use of that money until you get your refund. Al-ways check your withholding if there are per-sonal or financial changes in your life or changes in the law that might change your tax liability. See Table 1-1 for examples.

Note. You can’t give your employer a pay-ment to cover federal income tax withholding on salaries and wages for past pay periods or a payment for estimated tax.

When Should You Check Your Withholding?

The earlier in the year you check your withhold-ing, the easier it is to get the right amount of tax withheld.

You should check your withholding when any of the following situations occur.

1. You receive a paycheck stub (statement) covering a full pay period in 2019, showing tax withheld based on 2019 tax rates.

2. You prepare your 2018 tax return and get a:

a. Big refund, or

b. Balance due that is:

i. More than you can comfortably pay, or

ii. Subject to a penalty.

3. There are changes in your life or financial situation that affect your tax liability. See Table 1-1

4. There are changes in the tax law that af-fect your tax liability.

How Do You Check Your Withholding?

You can use the worksheets and tables in this publication to see if you are having the right amount of tax withheld. You can also use the IRS Withholding Calculator at IRS.gov/W4App. If you use the worksheets and tables in this publication, follow these steps.

1. Fill out Worksheet 1-3 to project your total federal income tax liability for 2019.

2. Fill out Worksheet 1-5 to project your total federal withholding for 2019 and compare that with your projected tax liability from Worksheet 1-3.

If you are not having enough tax withheld, line 6 of Worksheet 1-5 will show you how much more to have withheld each payday. For ways to increase the amount of tax withheld, see How Do You Increase Your Withholding, later.

If line 5 of Worksheet 1-5 shows that you are having more tax withheld than necessary, see How Do You Decrease Your Withholding, later, for ways to decrease the amount of tax you have withheld each payday.

How Do You Increase Your Withholding?

There are two ways to increase your withhold-ing. You can:

Decrease the number of allowances you claim on Form W-4, or

Enter an additional amount that you want withheld from each paycheck on Form W-4.

Requesting an additional amount be with-held. You can request that an additional amount be withheld from each paycheck by en-tering the additional amount on line 6 of Form W-4. To see if you should request an additional amount be withheld, complete Worksheets 1-3 and 1-5. Complete a new Form W-4 if the amount on Worksheet 1-5, line 5:

1. Is more than you want to pay with your tax return or in estimated tax payments throughout the year, or

2. Would cause you to pay a penalty when you file your tax return for 2019.

Example. Early in 2019, Steve Miller used Worksheets 1-3, 1-4, and 1-5 to project his 2019 tax liability ($4,316) and his withholding for the year ($3,516). Steve will be underwith-held by $800 ($4,316 − $3,516). His choices are to pay this amount when he files his 2019 tax return, make estimated tax payments, or in-crease his withholding now. Steve gets a new Form W-4 from his employer, who tells him that there are 50 paydays remaining in 2019. Steve completes the new Form W-4 as before, enter-ing the same number of withholding allowances as before, but, in addition, entering $16 ($800 ÷

50) on the form as the additional amount to be withheld from his pay each payday. He gives the completed form to his employer.

What if I have more than one job or my spouse also has a job? You are more likely to need to increase your withholding if you have more than one job or if you are married filing jointly and your spouse also works. If this is the case, you can increase your withholding for one or more of the jobs.

You can apply the amount on Worksheet 1-5, line 5, to only one job or divide it between the jobs any way you wish. For each job, deter-mine the extra amount that you want to apply to that job and divide that amount by the number of paydays remaining in 2019 for that job. This will give you the additional amount to enter on the Form W-4 you will file for that job. You need to give your employer a new Form W-4 for each job for which you are changing your withhold-ing.

Example. Meg Green works in a store and earns $46,000 a year. Her husband, John, works in a factory, earns $68,000 a year and has 49 pay periods left. In 2019, they also will have $184 in taxable interest and $1,000 of other taxable income. They expect to file a joint income tax return. Meg and John complete Worksheets 1-3, 1-4, and 1-5. Line 5 of Work-sheet 1-5 shows that they will owe an additional $4,459 after subtracting their withholding for the year. They can divide the $4,459 any way they want. They can enter an additional amount on

either of their Forms W-4, or divide it between them. They decide to have the additional amount withheld from John's wages, so they enter $91 ($4,459 ÷ 49 remaining paydays) on his Form W-4. Both claim the same number of allowances as before.

How Do You Decrease Your Withholding?

If your completed Worksheets 1-3 and 1-5 show that you may have more tax withheld than your projected tax liability for 2019, you may be able to decrease your withholding. There are two ways to do this. You can:

Decrease any additional amount you are having withheld, or

Increase the number of allowances you claim on Form W-4.

You can claim only the number of al-

lowances to which you are entitled. To CAUTION see if you can decrease your withhold-ing by increasing your allowances, see the Form W-4 instructions and the rest of this publi-cation.

Increasing the number of allowances. Fig-ure and increase the number of withholding al-lowances you can claim as follows.

1. On a new Form W-4, complete the Per-sonal Allowances Worksheet.

2. If you plan to itemize deductions, claim ad-justments to income, or claim tax credits, complete a new Deductions, Adjustments, and Additional Income Worksheet. If you plan to claim tax credits, see Converting Credits to Withholding Allowances below.

3. If you meet the criteria below line H of the Form W-4 Personal Allowances Work-sheet, complete a new Two-Earners/Multi-ple Jobs Worksheet.

4. If the number of allowances you can claim on Form W-4 is different from the number you already are claiming, give the newly completed Form W-4 to your employer.

Converting Credits to Withholding Allowances

Table 1-2 shows many of the tax credits you may be able to use to decrease your withhold-ing. For a complete list of credits you may be able to claim, see the 2018 Form 1040 instruc-tions.

The Form W-4 Personal Allowances Work-sheet provides only rough adjustments for the child tax credit and the credit for other depend-ents. Complete Worksheet 1-6 to figure these credits more accurately and also take other credits into account.

If you take the child tax credit into ac-

count on Worksheet 1-6, enter “-0-” on CAUTION line E of the Personal Allowances Worksheet. If you take the credit for other de-pendents into account on Worksheet 1-6, enter “-0-” on line F of the Personal Allowances Work-sheet.

Page 4Chapter 1Tax Withholding for 2019

Table 1-2. Tax Credits for 2019

For more information about the...	See...
Adoption credit	Instructions for Form 8839
Credit for child and dependent care expenses	Pub. 503, Child and Dependent Care Expenses
Child tax credit (including the additional child tax credit)	2018 Instructions for Form 1040
Credit for other dependents	2018 Instructions for Form 1040
Earned income credit	Pub. 596, Earned Income Credit (EIC)
Education credits	Pub. 970, Tax Benefits for Education
Credit for the elderly or the disabled	Pub. 524, Credit for the Elderly or the Disabled
Foreign tax credit (except any credit that applies to wages not subject to	Pub. 514, Foreign Tax Credit for Individuals
U.S. income tax withholding because they are subject to income tax
withholding by a foreign country)
General business credit	Form 3800, General Business Credit
Health coverage tax credit	Instructions for Form 8885
Mortgage interest credit	Pub. 530, Tax Information for Homeowners
Qualified electric vehicle credit	Form 8834
Credit for prior year minimum tax (if you paid alternative minimum tax in an	Instructions for Form 8801
earlier year)
Retirement savings contributions credit (saver's credit)	Pub. 590-A, Contributions to Individual Retirement Arrangements (IRAs)
Credit to holders of tax credit bonds	Instructions for Form 8912
Premium tax credit	Pub. 974, Premium Tax Credit (PTC)

Enter the amount from line 16 of Worksheet 1-6 in this publication on line G of the Personal Allowances Worksheet on Form W-4. Then complete the Personal Allowances Worksheet, and if needed, other worksheets on the Form W-4, and then complete the first page of Form W-4.

Example. Brett and Alyssa Davis are mar-ried and expect to file a joint return for 2019. Their expected taxable income from all sources is $68,000. They plan on taking the standard deduction. Their projected tax credits include a child and dependent care credit of $960 and an adoption credit of $1,500.

The Davises complete Worksheet 1-6, as follows, to see whether they can convert their tax credits into additional withholding allowan-ces.

1. Line 3, expected child and dependent care credit—$960.

2. Line 6, expected adoption credit—$1,500.

3. Line 13, total estimated tax cred-its—$2,460.

4. Line 14. Their combined total income from all sources, $68,000, falls between $43,801 and $103,350 on the table for married filing jointly or qualifying widow(er). The number to the right of this range is 8.3.

5. Line 15, multiply line 13 by the multiplica-tion factor from line 14 (8.3)—$20,418.

6. Line 16, divide line 15 by $4,200 and drop the fraction—4.

Then the Davises complete the Form W-4 worksheets. They take the result on line 16 of Worksheet 1-6, enter it on line G of the Form W-4 Personal Allowances Worksheet, and com-plete the Form W-4 worksheets.

When Will Your New Form W-4 Go Into Effect?

If the change is for the current year, your em-ployer must put your new Form W-4 into effect no later than the start of the first payroll period ending on or after the 30th day after the day on which you give your employer your revised Form W-4.

If the change is for next year, your new Form W-4 won’t take effect until next year.

Retirees Returning to the Workforce

When you first began receiving your pension, you told the payer how much tax to withhold, if any, by completing Form W-4P, Withholding Certificate for Pension or Annuity Payments (or similar form). However, if your retirement pay is from the military or certain deferred compensa-tion plans, you completed Form W-4 instead of Form W-4P. You completed either form based on your projected income at that time. Now that you are returning to the workforce, your new Form W-4 (given to your employer) and your Form W-4 or W-4P (on file with your pension plan) must work together to determine the cor-rect amount of withholding for your new amount of income.

The worksheets that come with Forms W-4 and W-4P are basically the same, so you can use either set of worksheets to figure out how many withholding allowances you are entitled to claim. Start off with the Personal Allowances Worksheet. Then, if you will be itemizing your deductions, claiming adjustments to income, or have additional income (such as interest or divi-dends), complete the Deductions, Adjustments, and Additional Income Worksheet.

The third worksheet is the most important for this situation. Form W-4 calls it the Two-Earn-ers/Multiple Jobs Worksheet, and Form W-4P

calls it the Multiple Pensions/ More-Than-One-Income Worksheet—both are the same. If you have more than one source of income, in order to have enough withholding to cover the tax on your higher income, you may need to claim fewer withholding allowances or request that your employer withhold an addi-tional amount from each paycheck.

Once you have figured out how many allow-ances you are entitled to claim, look at the in-come from both your pension and your new job, and how often you receive payments. It is your decision how to divide up your withholding al-lowances between these sources of income. For example, you may want to “take home” most of your weekly paycheck to use as spend-ing money and use your monthly pension to “pay the bills.” In that case, change your Form W-4P to zero allowances and claim all that you are entitled to on your Form W-4.

There are a couple of ways you can get a better idea of how much tax will be withheld when claiming a certain number of allowances.

Use the withholding tables in Pub. 15 (Cir-cular E), Employer's Tax Guide.

Contact your pension provider and your employer's payroll department.

And remember, this isn’t a final decision. If you don’t get the correct amount of withholding with the first Forms W-4 and W-4P you submit, you should refigure your allowances (or divide them differently) using the information and worksheets in this publication, or the resources mentioned above.

You should go through this same process each time your life situation changes, whether it

Chapter 1Tax Withholding for 2019Page 5

be for personal or financial reasons. You may need more tax withheld, or you may need less.

Completing Form W-4 and Worksheets

When reading the following discussion, you may find it helpful to refer to Form W-4.

Marital Status

There is a lower withholding rate for people who qualify to check the “Married” box on line 3 of Form W-4. Everyone else must have tax with-held at the higher single rate.

Single. You must check the “Single” box if any of the following applies.

You are single. If you are divorced, or sep-arated from your spouse under a court de-cree of separate maintenance, you are considered single.

You are married, but neither you nor your spouse is a citizen or resident of the United States.

You are married, either you or your spouse is a nonresident alien, and you haven’t chosen to have that person treated as a resident alien for tax purposes. For more information, see Nonresident Spouse Treated as a Resident in chapter 1 of Pub. 519.

Married. You qualify to check the “Married” box if any of the following applies.

You are married and neither you nor your spouse is a nonresident alien. You are considered married for the whole year even if your spouse died during the year.

You are married and either you or your spouse is a nonresident alien who has chosen to be treated as a resident alien for tax purposes. For more information, see Nonresident Spouse Treated as a Resi-dent in chapter 1 of Pub. 519.

You expect to be able to file your return as a qualifying widow or widower. You usually can use this filing status if your spouse died within the previous 2 years and you provide more than half the cost of keeping up a home for the entire year that was the main home for you and your child whom you can claim as a dependent. However, you must file a new Form W-4 showing your filing status as single by December 1 of the last year you are eligible to file as a qualifying widow or widower. For more in-formation on this filing status, see Qualify-ing Widow(er) under Filing Status in Pub. 501.

Married, but withhold at higher single rate. Some married people find that they don’t have enough tax withheld at the married rate. This can happen, for example, when both spouses work. To avoid this, you can check the “Married, but withhold at higher Single rate” box (even if you qualify for the married rate). Also, you may find that more tax is withheld if you fill out the Two-Earners/Multiple Jobs Worksheet.

If your filing status is married filing sepa-rately, you should check the “Married, but withhold at higher Single rate” box.

Withholding Allowances

The more allowances you claim on Form W-4, the less income tax your employer will withhold. You will have the most tax withheld if you claim “0” allowances. The number of allowances you can claim depends on the following factors.

Whether you will file as single, head of household, married filing jointly, or married filing separately.

Whether you have income from more than one job.

What credits you expect to claim for chil-dren and other dependents.

What other credits you expect to claim for the year.

What deductions, adjustments, and nonw-age income (such as dividends or interest) you expect to have for the year.

If you are married (filing jointly), it also de-pends on whether your spouse also works and claims any allowances on his or her own Form W-4.

Form W-4 worksheets. Form W-4 has work-sheets to help you figure how many withholding allowances you can claim. The worksheets are for your own records. Don’t give them to your employer.

Complete only one set of Form W-4 work-sheets, no matter how many jobs you have. If you are married and will file a joint return, com-plete only one set of worksheets for you and your spouse, even if you both earn wages and each must give Form W-4 to your employers. Complete separate sets of worksheets only if you and your spouse will file separate returns.

If you are not exempt from withholding (see Exemption From Withholding, later), complete the Personal Allowances Worksheet. Also, use the worksheets on Form W-4 to adjust the num-ber of your withholding allowances for itemized deductions, adjustments to income, additional income (such as interest or dividends), and for two-earner or multiple-job situations.

Complete all worksheets that apply to your situation. The worksheets will help you figure the maximum number of withholding allowan-ces you are entitled to claim so that the amount of income tax withheld from your wages will match, as closely as possible, the amount of in-come tax you will owe at the end of the year.

Multiple jobs. If you have income from more than one job at the same time, complete only one set of Form W-4 worksheets. Then split your allowances between the Forms W-4 for each job. You can’t claim the same allowan-ces with more than one employer at the same time. You can claim all your allowances with one employer and none with the other(s), or di-vide them any other way.

Married individuals. If both you and your spouse are employed and expect to file a joint return, figure your withholding allowances using your combined income, adjustments, deduc-tions, and credits. Use only one set of work-sheets. You can divide your total allowances

any way, but you can’t claim an allowance that your spouse also claims.

If you and your spouse expect to file sepa-rate returns, figure your allowances using sepa-rate worksheets based on your own individual income, adjustments, deductions, and credits.

Alternative method of figuring withholding allowances. You don’t have to use the Form W-4 worksheets if you use a more accurate method of figuring the number of withholding al-lowances.

The method you use must be based on with-holding schedules, the tax rate schedules, and the 2019 Estimated Tax Worksheet in chap-ter 2. It must take into account only the items of income, adjustments to income, deductions, and tax credits that are taken into account on Form W-4.

You can use the number of withholding al-lowances determined under an alternative method rather than the number determined us-ing the Form W-4 worksheets. You still must give your employer a Form W-4 claiming your withholding allowances.

Employees who are not citizens or resi-dents. If you are neither a citizen nor a resident of the United States, you usually can claim only one withholding allowance. However, this rule does not apply if you are a resident of Canada or Mexico, or if you are a U.S. national. It also does not apply if your spouse is a U.S. citizen or resident and you have chosen to be treated as a resident of the United States for tax purposes. Special rules apply to residents of South Korea and India. For more information, see Withhold-ing on Wages in chapter 8 of Pub. 519.

Personal Allowances Worksheet

Use the Personal Allowances Worksheet on page 1 of Form W-4 to figure your withholding allowances based on all of the following that ap-ply.

Filing status.

Number of jobs.

Child tax credit.

Credit for other dependents.

Other credits.

Filing Status (worksheet lines A, B, and C).

Single or married but filing separately from your spouse. You can claim an allow-ance for yourself. If you expect to file as single or married filing separately on your 2019 tax re-turn, enter “1” on line A of the worksheet.

Married filing jointly or qualifying widow(er). You can claim an allowance if you will file as married filing jointly or qualifying widow(er). If you expect to file as married filing jointly or qualifying widow(er) on your 2019 tax return, enter “1” on line B of the worksheet.

Head of household. Generally, you can file as head of household if you are unmarried and pay more than half the cost of keeping up a home that:

Was the main home for all of 2019 of your parent whom you can claim as your de-pendent, or

Page 6Chapter 1Tax Withholding for 2019

You lived in for more than half the year with your qualifying child or any other person whom you can claim as your dependent.

For more information, see Pub. 501.

If you expect to file as head of household on your 2019 tax return, enter "1" on line C of the worksheet. In addition, see line 12 of Work-sheet 1-6 for an additional amount to enter on line G of the Personal Allowances Worksheet.

Only one job (worksheet line D). You can claim an additional withholding allowance if any of the following apply for 2019.

You are single and you have only one job at a time.

You are married, you have only one job at a time, and your spouse doesn’t work.

Your wages from a second job or your spouse's wages (or the total of both) are $1,500 or less.

If you qualify for this allowance, enter “1” on line D of the worksheet.

Child tax credit (worksheet line E). If your total income will be less than $71,201 ($103,351 if married filing jointly), enter “4” on line E for each eligible child.

If your total income will be from $71,201 to $179,050 ($103,351 and $345,850 if married fil-ing jointly), enter “2” on line E for each eligible child.

If your total income will be from $179,051 to $200,000 ($345,851 and $400,000 if married fil-ing jointly), enter “1” on line E for each eligible child.

If your total income is higher than $200,000 ($400,000 if married filing jointly), enter “-0-” on line E.

To see if your child is an eligible child for the child tax credit, see the instructions for Depend-ents in the Form 1040 instructions.

For more information about the child tax credit, see the instructions for Form 1040.

Instead of using line E, you can choose to take the child tax credit into account on line 1 of Worksheet 1-6.

Credit for other dependents (worksheet line F). If your total income will be less than $71,201 ($103,351 if married filing jointly), enter “1” on line F for each eligible dependent.

If your total income will be from $71,201 to $179,050 ($103,351 and $345,850 if married fil-ing jointly), enter “1” on line F for every two de-pendents (for example, you would enter “-0-” for one dependent, “1” if you have two or three de-pendents, or “2” if you have four dependents).

If your total income will be higher than $179,050 ($345,850 if married filing jointly), en-ter “-0-” on line F.

Instead of using line F, you can choose to take the child tax credit into account on line 2 of Worksheet 1-6.

To see who you can claim as a dependent for the credit for other dependents, see the in-structions for Dependents in the Form 1040 in-structions. A dependent for purposes of the credit for other dependents also includes an eli-gible child who had an ITIN but not an SSN by the due date of your 2019 return (including ex-tensions).

Other credits (worksheet line G). Use Work-sheet 1-6 to figure the amount of other credits to enter on line G. In addition to the child tax credit and credit for other dependents, you can take your other credits into account when figuring additional withholding allowances for 2019. See Table 1-2 .

Head of household filers also can use Work-sheet 1-6 to further reduce withholding.

Example. You are married and expect to file a joint return for 2019. You have one child. Your combined estimated wages are $68,000. Your estimated tax credits include a child tax credit of $2,000, a child and dependent care credit of $960, and an education credit of $1,700 (total credits = $4,660).

In Worksheet 1-6, the number correspond-ing to your combined estimated wages ($43,801 – $103,350) is 8.3. Multiply your total estimated credits of $4,660 by 8.3 for a total of $38,678. Divide $38,678 by $4,200 and drop any fraction. Enter the result, 9, on line G of the Personal Allowances Worksheet. Because you choose to account for your child tax credit on Worksheet 1-6, enter “-0-” on line E of the Per-sonal Allowances Worksheet.

Total personal allowances (worksheet line H). Add lines A through G and enter the total on line H. If you don’t use either of the work-sheets on pages 3 and 4 of Form W-4, enter the number from line H on line 5 of Form W-4.

Deductions, Adjustments,

and Additional Income Worksheet

Use the Form W-4 Deductions, Adjustments, and Additional Income Worksheet if you plan to itemize your deductions or claim adjustments to the income on your 2019 tax return and you want to reduce your withholding. Also, use this worksheet to figure out how much to increase the tax withheld from your paycheck if you have a large amount of nonwage income, such as in-terest or dividends. Complete this worksheet when you have changes to those items to see if you need to change your withholding.

Use the amount of each item you reasona-bly can expect to show on your return. How-ever, don’t use more than:

The amount shown for that item on your 2018 return (or your 2017 return if you haven’t yet filed your 2018 return), plus

Any additional amount related to a transac-tion or occurrence (such as payments al-ready made, the signing of an agreement, or the sale of property) that has happened or will happen during 2018 or 2019.

Don’t include any amount shown on your last tax return that has been disallowed by the IRS.

Example. On June 30, 2018, you bought your first home. On your 2018 tax return, you claimed itemized deductions of $3,500, the total mortgage interest and real estate tax you paid during the 6 months you owned your home. Based on your mortgage payment schedule and your real estate tax assessment, you rea-sonably can expect to claim deductions of $8,000 for those items on your 2019 return. You

can use $8,000 to figure the number of your withholding allowances for itemized deductions.

Not itemizing deductions. If you expect to claim the standard deduction on your tax return, skip lines 1 and 2, and enter “-0-” on line 3 of the worksheet.

Itemized deductions (worksheet line 1). En-ter your estimated total itemized deductions on line 1 of the worksheet.

Listed below are some of the deductions you can take into account when figuring addi-tional withholding allowances for 2019. You nor-mally claim these deductions on Schedule A of Form 1040. For a full list of itemized deductions, see the Instructions for Schedule A (Form 1040 for 2018) and What’s New for 2019, earlier.

1. Medical and dental expenses that are more than 10% of your 2019 adjusted gross income (AGI) (defined under Expec-ted AGI, later).

2. State and local income or property taxes (up to $10,000).

3. Deductible home mortgage interest.

4. Investment interest up to net investment income.

5. Charitable contributions.

6. Casualty and theft losses attributable to a federally declared disaster that are more than $100 and 10% of your AGI.

Adjustments to income (worksheet line 4). Enter your estimated total adjustments to in-come on line 4 of the Deductions, Adjustments, and Additional Income Worksheet.

You can take the following adjustments to income into account when figuring additional withholding allowances for 2019.

Net losses from Schedules C, D, E, and F of Form 1040 and from Part II of Form 4797, line 18b.

Net operating loss carryovers.

Certain business expenses of reservists, performing artists, and fee-based govern-ment officials.

Health savings account or medical savings account deduction.

Certain moving expenses for members of the Armed Forces on active duty.

Deduction for self-employment tax.

Deduction for contributions to self-em-ployed SEP, and qualified SIMPLE plans.

Self-employed health insurance deduction.

Penalty on early withdrawal of savings.

IRA deduction.

Student loan interest deduction.

Jury duty pay given to your employer.

Reforestation amortization and expenses.

Deductible expenses related to income re-ported on Schedule 1 (Form 1040), line 21, from the rental of personal property en-gaged in for profit.

Repayment of certain supplemental unem-ployment benefits.

Contributions to pension plans.

Contributions by certain chaplains to plans.

Attorney fees and court costs for certain unlawful discrimination claims.

Attorney fees and court costs for certain whistleblower awards.

Chapter 1Tax Withholding for 2019Page 7

Estimated amount of decrease in tax attrib-utable to income averaging using Sched-ule J (Form 1040).

Educator expenses.

Nonwage income (worksheet line 6). Enter on line 6 your estimated total nonwage income (other than tax-exempt income). Nonwage in-come includes interest, dividends, net rental in-come, unemployment compensation, gambling winnings, prizes and awards, hobby income, capital gains, royalties, and partnership income.

If line 6 is more than line 5, you may not have enough income tax withheld from your wa-ges. See Getting the Right Amount of Tax With-held, later.

Net deductions and adjustments (work-sheet line 8). Divide the amount on line 7 by $4,200, drop any fraction, and enter the amount on line 8. If it's a negative amount, enter it in pa-rentheses.

Example. If line 7 is $5,200, $5,200 ÷ $4,200 = 1.2. Drop the fraction (0.2) and enter “1” on line 8.

Two-Earners/Multiple Jobs Worksheet

Complete the Two-Earners/Multiple Jobs Work-sheet on page 4 of Form W-4 if you have more than one job or are married filing jointly and you and your spouse both work and the combined earnings from all jobs are more than $53,000 ($24,450 if married filing jointly).

Reducing your allowances (worksheet lines 1–3). On line 1 of the worksheet, enter the number from line H of the Personal Allowances Worksheet (or line 10 of the Deductions, Adjust-ments, and Additional Income Worksheet, if used). Using Table 1 in the Two-Earners/Multi-ple Jobs Worksheet, find the number listed be-side the amount of your estimated wages for the year from your lowest paying job (or if lower and you are filing jointly, your spouse's job). En-ter that number on line 2. If you (or you and your spouse if married) have more than two jobs, add up earnings for all jobs except the highest paying job when locating the relevant number in Table 1. However, if you are married filing jointly and estimated wages from the highest paying job are $75,000 or less and the com-bined wages for you and your spouse are $107,000 or less, don’t enter more than “3.”

Subtract line 2 from line 1 and enter the re-sult (but not less than zero) on line 3 and on Form W-4, line 5. If line 1 is more than or equal to line 2, don’t use the rest of the worksheet.

If line 1 is less than line 2, enter “-0-” on Form W-4, line 5. Then complete lines 4 through 9 of the worksheet to figure the addi-tional withholding needed to avoid underwith-holding.

Other amounts owed. If you expect to owe amounts other than income tax, such as self-employment tax, include them on line 8. The total is the additional withholding needed for the year.

Getting the Right Amount of Tax Withheld

In most situations, the tax withheld from your pay will be close to the tax you figure on your return if you follow these two rules.

You accurately complete all the Form W-4 worksheets that apply to you.

You give your employer a new Form W-4 when changes occur.

But because the worksheets and withhold-ing methods don’t account for all possible situa-tions, you may not be getting the right amount withheld. This is most likely to happen in the fol-lowing situations.

You are married and both you and your spouse work.

You have more than one job at a time.

You have nonwage income, such as inter-est, dividends, alimony, or unemployment compensation.

You will owe additional amounts with your return.

Your withholding is based on obsolete Form W-4 information for a substantial part of the year.

You work only part of the year.

You change the number of your withhold-ing allowances during the year.

You are subject to Additional Medicare Tax or NIIT. If you anticipate liability for Addi-tional Medicare Tax or NIIT, you may re-quest that your employer withhold an addi-tional amount of income tax withholding on Form W-4.

If any of these situations apply to you, you can use the IRS Withholding Calculator at IRS.gov/W4App to see if you need to change your withholding.

If you have self-employment income or owe self-employment tax, you should use the work-sheets in this publication to determine if you should pay estimated tax.

Part-Year Method

If you work only part of the year and your em-ployer agrees to use the part-year withholding method, less tax will be withheld from each wage payment than would be withheld if you worked all year. To be eligible for the part-year method, you must meet both of the following re-quirements.

You must use the calendar year (the 12 months from January 1 through December 31) as your tax year. You can’t use a fiscal year.

You must not expect to be employed for more than 245 days during the year. To fig-ure this limit, count all calendar days that you are employed (including weekends, vacations, and sick days) beginning with the first day you are on the job for pay and ending with your last day of work. If you are temporarily laid off for 30 days or less, count those days too. If you are laid off for more than 30 days, don’t count those days. You won’t meet this requirement if you begin working before May 1 and ex-pect to work for the rest of the year.

How to apply for the part-year method. You must ask your employer in writing to use this method. The request must state all three of the following.

The date of your last day of work for any prior employer during the current calendar year.

That you don’t expect to be employed more than 245 days during the current cal-endar year.

That you use the calendar year as your tax year.

Cumulative Wage Method

If you change the number of your withholding al-lowances during the year, too much or too little tax may have been withheld for the period be-fore you made the change. You may be able to compensate for this if your employer agrees to use the cumulative wage withholding method for the rest of the year. You must ask your em-ployer in writing to use this method.

To be eligible, your payroll periods (weekly, biweekly, etc.) must have been the same since the beginning of the year.

Aids for Figuring Your Withholding

IRS Withholding Calculator. If you are con-cerned that you may be having too much or too little income tax withheld from your pay, the IRS provides a withholding calculator on its website. Go to IRS.gov/W4App. It can help you deter-mine the correct amount to be withheld any time during the year.

Rules Your Employer Must Follow

It may be helpful for you to know some of the withholding rules your employer must follow. These rules can affect how to fill out your Form W-4 and how to handle problems that may arise.

New Form W-4. When you start a new job, your employer should give you a Form W-4 to fill out. Beginning with your first payday, your employer will use the information you give on the form to figure your withholding.

If you later fill out a new Form W-4, your em-ployer can put it into effect as soon as possible. The deadline for putting it into effect is the start of the first payroll period ending 30 or more days after you turn it in.

No Form W-4. If you don’t give your employer a completed Form W-4, your employer must withhold at the highest rate, as if you were sin-gle and claimed no withholding allowances.

Repaying withheld tax. If you find you are having too much tax withheld because you didn’t claim all the withholding allowances you are entitled to, you should give your employer a new Form W-4. Your employer can’t repay any of the tax previously withheld. Instead, claim the full amount withheld when you file your tax re-turn.

However, if your employer has withheld more than the correct amount of tax for the

Page 8Chapter 1Tax Withholding for 2019

Form W-4 you have in effect, you don’t have to fill out a new Form W-4 to have your withholding lowered to the correct amount. Your employer can repay the amount that was withheld incor-rectly. If you are not repaid, your Form W-2 will reflect the full amount actually withheld, which you would claim when you file your tax return.

IRS review of your withholding. Whether you are entitled to claim a certain number of al-lowances or a complete exemption from with-holding is subject to review by the IRS. Your employer may be required to send a copy of the Form W-4 to the IRS. There is a penalty for sup-plying false information on Form W-4. See Pen-alties, later.

If the IRS determines that you can’t claim more than a specified number of withholding al-lowances or claim a complete exemption from withholding, the IRS will issue a notice of the maximum number of withholding allowances permitted (commonly referred to as a “lock-in letter”) to both you and your employer.

The IRS will provide a period of time during which you can dispute the determination before your employer adjusts your withholding. If you believe that you are entitled to claim complete exemption from withholding or claim more with-holding allowances than the maximum number specified by the IRS in the lock-in letter, you must submit a new Form W-4 and a written statement to support your claims to the IRS. Contact information (a toll-free number and an IRS office address) will be provided in the lock-in letter. At the end of this period, if you haven’t responded or if your response isn’t ade-quate, your employer will be required to with-hold based on the original lock-in letter.

After the lock-in letter takes effect, your em-ployer must withhold tax on the basis of the withholding rate (marital status) and maximum number of withholding allowances specified in that letter.

If you later believe that you are entitled to claim exemption from withholding or more al-lowances than the IRS determined, you can complete a new Form W-4 and a written state-ment to support the claims made on the Form W-4 and send them directly to the IRS address shown on the lock-in letter. Your employer must continue to figure your withholding on the basis of the number of allowances previously deter-mined by the IRS until the IRS advises your em-ployer otherwise.

At any time, either before or after the lock-in letter becomes effective, you may give your em-ployer a new Form W-4 that does not claim complete exemption from withholding and re-sults in more income tax withheld than specified in the lock-in letter. Your employer must then withhold tax based on this new Form W-4.

Additional information is available at IRS.gov. Enter ``withholding compliance questions'' in the search box.

Exemption From Withholding

If you claim exemption from withholding, your employer won’t withhold federal income tax from your wages. The exemption applies only to income tax, not to social security or Medicare tax.

You can claim exemption from withholding for 2019 only if both of the following situations apply.

For 2018, you had a right to a refund of all federal income tax withheld because you had no tax liability.

For 2019, you expect a refund of all federal income tax withheld because you expect to have no tax liability.

Use Figure 1-A to help you decide whether you can claim exemption from withholding. Don’t use Figure 1-A if you:

Are 65 or older,

Are blind,

Will itemize deductions on your 2019 re-turn, or

Will claim any tax credits on your 2019 re-turn.

These situations are discussed later.

Students. If you are a student, you are not au-tomatically exempt. If you work only part time or during the summer, you may qualify for exemp-tion from withholding.

Example 1. You are a high school student and expect to earn $2,500 from a summer job. You don’t expect to have any other income dur-ing the year, and your parents will be able to claim you as a dependent on their tax return. You worked last summer and had $375 federal income tax withheld from your pay. The entire $375 was refunded when you filed your 2018 return. Using Figure 1-A, you find that you can claim exemption from withholding.

Example 2. The facts are the same as in Example 1, except that you also have a savings account and expect to have $400 interest in-come during the year. Using Figure 1-A, you find that you can’t claim exemption from with-holding because your unearned income will be more than $350 and your total income will be more than $1,100.

You may have to file a tax return, even

if you are exempt from withholding. CAUTION See Pub. 501 to see whether you must file a return.

Age 65 or older or blind. If you are 65 or older or blind, use Worksheet 1-1 or Worksheet 1-2 to help you decide whether you can claim exemption from with-holding. Don’t use either worksheet if you will itemize deductions or claim tax credits on your 2019 return. Instead, see Itemizing deductions

or claiming credits next.

Itemizing deductions or claiming credits. If you had no tax liability for 2018, and you will:

Itemize deductions, or

Claim a tax credit,

use Worksheet 2-1 (also see chapter 2) to fig-ure your 2019 expected tax liability. You can claim exemption from withholding only if your total expected tax liability (line 11c of the work-sheet) is zero.

Claiming exemption from withholding. To claim exemption, you must give your employer a Form W-4. Don’t complete lines 5 and 6. En-ter “Exempt” on line 7.

If you claim exemption, but later your situa-tion changes so that you will have to pay in-come tax after all, you must file a new Form W-4 within 10 days after the change. If you claim exemption in 2019 but you expect to owe income tax for 2020, you must file a new Form W-4 by December 1, 2019.

Your claim of exempt status may be re-viewed by the IRS. See IRS review of your with-holding, earlier.

An exemption is good for only 1 year. You must give your employer a new Form W-4 by February 15 each year to continue your ex-emption.

Supplemental Wages

Supplemental wages include bonuses, commis-sions, overtime pay, vacation allowances, cer-tain sick pay, and expense allowances under certain plans. The payer can figure withholding on supplemental wages using the same method used for your regular wages. However, if these payments are identified separately from regular wages, your employer or other payer of supple-mental wages can withhold income tax from these wages at a 22% flat rate under certain cir-cumstances as explained in the section on sup-plemental wages in Pub. 15.

Expense allowances. Reimbursements or other expense allowances paid by your em-ployer under a nonaccountable plan are treated as supplemental wages. A nonaccountable plan is a reimbursement arrangement that does not require you to account for, or prove, your busi-ness expenses to your employer or does not re-quire you to return your employer's payments that are more than your proven expenses.

Reimbursements or other expense allowan-ces paid under an accountable plan that are more than your proven expenses are treated as paid under a nonaccountable plan if you don’t return the excess payments within a reasonable period of time.

Accountable plan. To be an accountable plan, your employer's reimbursement or allow-ance arrangement must include all three of the following rules.

Your expenses must have a business con-nection. That is, you must have paid or in-curred deductible expenses while perform-ing services as an employee of your employer.

You must adequately account to your em-ployer for these expenses within a reason-able period of time.

You must return any excess reimburse-ment or allowance within a reasonable pe-riod of time.

An excess reimbursement or allowance is any amount you are paid that is more than the business-related expenses that you adequately accounted for to your employer.

The definition of reasonable period of time depends on the facts and circumstances of your situation. However, regardless of those facts and circumstances, actions that take place within the times specified in the following

Chapter 1Tax Withholding for 2019Page 9

Figure 1-A. Exemption From Withholding on Form W-4

Note. Don’t use this chart if you are 65 or older or blind, or if you will itemize your deductions or claim tax credits. Instead, see the discussions in this chapter under Exemption From Withholding. If none of these situations apply to you, but you have adjustments to income, use the 2019 Estimated Tax Worksheet.

Start Here

For 2018, did you have a

You CAN’T claim

right to a refund of ALL

No

federal income tax withheld

exemption from

because you had NO tax

withholding.

liability?

Yes

Yes

Will your 2019 total income be more than the amount shown below for

your ling status?

Single

$12,200

For 2019, will

Head of household

18,350

someone (such as

No

Married ling separately for

your parent) be able

to claim you as a

BOTH 2018 and 2019

12,200

dependent?

Other married status (include BOTH

spouses’ income whether ling

Yes

separately or jointly)

24,400

Qualifying widow(er)

24,400

No

No

Will your 2019 income

be more than $1,100?

Yes

Will your 2019 income

Yes

You CAN’T claim

You CAN claim

include more than $350

of unearned income

exemption from

exemption from

withholding.

withholding.

(interest, dividends, etc.)?

No

No

Will your 2019 total income be

$12,200 or less?

Yes

list will be treated as taking place within a rea-sonable period of time.

You receive an advance within 30 days of the time you have an expense.

You adequately account for your expenses within 60 days after they were paid or in-curred.

You return any excess reimbursement within 120 days after the expense was paid or incurred.

You are given a periodic statement (at least quarterly) that asks you to either re-turn or adequately account for outstanding advances and you comply within 120 days of the statement.

Nonaccountable plan. Any plan that does not meet the definition of an accountable plan is considered a nonaccountable plan.

For more information about accountable and nonaccountable plans, see chapter 6 of Pub. 463, Travel, Entertainment, Gift, and Car Ex-penses.

Penalties

You may have to pay a penalty of $500 if both of the following apply.

You make statements or claim withholding allowances on your Form W-4 that reduce the amount of tax withheld.

You have no reasonable basis for those statements or allowances at the time you prepare your Form W-4.

There also is a criminal penalty for willfully supplying false or fraudulent information on your Form W-4 or for willfully failing to supply in-formation that would increase the amount with-held. The penalty upon conviction can be either a fine of up to $1,000 or imprisonment for up to 1 year, or both.

These penalties will apply if you deliberately and knowingly falsify your Form W-4 in an at-tempt to reduce or eliminate the proper with-holding of taxes. A simple error or an honest mistake won’t result in one of these penalties. For example, a person who has tried to figure the number of withholding allowances correctly,

Page 10Chapter 1Tax Withholding for 2019

but claims seven when the proper number is six, won’t be charged a Form W-4 penalty.

Tips

The tips you receive while working on your job are considered part of your pay. You must in-clude your tips on your tax return on the same line as your regular pay. However, tax isn’t with-held directly from tip income, as it is from your regular pay. Nevertheless, your employer will take into account the tips you report when figur-ing how much to withhold from your regular pay.

Reporting tips to your employer. If you re-ceive tips of $20 or more in a month while work-ing for any one employer, you must report to your employer the total amount of tips you re-ceive on the job during the month. The report is due by the 10th day of the following month.

If you have more than one job, make a sepa-rate report to each employer. Report only the tips you received while working for that em-ployer, and only if they total $20 or more for the month.

How employer figures amount to withhold. The tips you report to your employer are coun-ted as part of your income for the month you re-port them. Your employer can figure your with-holding in either of two ways.

By withholding at the regular rate on the sum of your pay plus your reported tips.

By withholding at the regular rate on your pay plus a percentage of your reported tips.

Not enough pay to cover taxes. If your regu-lar pay isn’t enough for your employer to with-hold all the tax (including income tax and social security and Medicare taxes (or the equivalent railroad retirement tax)) due on your pay plus your tips, you can give your employer money to cover the shortage.

If you don’t give your employer money to cover the shortage, your employer first with-holds as much Medicare tax and social security or railroad retirement tax as possible, up to the proper amount, and then withholds income tax up to the full amount of your pay. If not enough tax is withheld, you may have to pay estimated tax. When you file your return, you also may have to pay any Medicare and social security tax or railroad retirement tax your employer could not withhold.

Tips not reported to your employer. On your tax return, you must report all the tips you receive during the year, even tips you don’t re-port to your employer (this includes the value of any noncash tips you received, such as tickets, passes, or other items of value). Make sure you are having enough tax withheld, or are paying enough estimated tax (see chapter 2), to cover all your tip income.

Allocated tips. If you work in a large food or beverage establishment, your employer may have to report an allocated amount of tips on your Form W-2.

Your employer should not withhold income tax, Medicare tax, and social security or railroad retirement tax on the allocated amount.

Withholding is based only on your pay plus your reported tips. Your employer should refund to you any incorrectly withheld tax.

More information. For more information on the reporting and withholding rules for tip in-come and on tip allocation, see Pub. 531, Re-porting Tip Income.

Taxable Fringe Benefits

The value of certain noncash fringe benefits you receive from your employer is considered part of your pay. Your employer generally must with-hold income tax on these benefits from your regular pay.

Although the value of your personal use of an employer-provided car, truck, or other high-way motor vehicle is taxable, your employer can choose not to withhold income tax on that amount. Your employer must notify you if this choice is made.

When benefits are considered paid. Your employer can choose to treat a fringe benefit as paid by the pay period, by the quarter, or on some other basis as long as the benefit is con-sidered paid at least once a year. Your em-ployer can treat the benefit as being paid on one or more dates during the year, even if you get the entire benefit at one time.

Special rule. Your employer can choose to treat a benefit provided during November or De-cember as paid in the next year. Your employer must notify you if this rule is used.

Example. Your employer considers the value of benefits paid from November 1, 2017, through October 31, 2018, as paid to you in 2018. To determine the total value of benefits paid to you in 2019, your employer will add the value of any benefits paid in November and De-cember of 2018 to the value of any benefits paid in January through October of 2019.

Exceptions. Your employer can’t choose when to withhold tax on the transfer of either real property or personal property of a kind nor-mally held for investment (such as stock). Your employer must withhold tax on these benefits at the time of the transfer.

How withholding is figured. Your employer can either add the value of a fringe benefit to your regular pay and figure income tax with-holding on the total or withhold a flat 22% of the benefit's value.

If the benefit's actual value can’t be deter-mined when it is paid or treated as paid, your employer can use a reasonable estimate. Your employer must determine the actual value of the benefit by January 31 of the next year. If the actual value is more than the estimate, your em-ployer must pay the IRS any additional with-holding tax required. Your employer has until April 1 of that next year to recover from you the additional income tax paid to the IRS for you.

How your employer reports your benefits. Your employer must report on Form W-2 the to-tal of the taxable fringe benefits paid or treated as paid to you during the year and the tax with-

held for the benefits. These amounts can be shown either on the Form W-2 for your regular pay or on a separate Form W-2. If your em-ployer provided you with a car, truck, or other motor vehicle and chose to treat all of your use of it as personal, its value must be either sepa-rately shown on Form W-2 or reported to you on a separate statement.

More information. For information on fringe benefits, see Fringe Benefits under Employee Compensation in Pub. 525, Taxable and Non-taxable Income.

Sick Pay

Sick pay is a payment to you to replace your regular wages while you are temporarily absent from work due to sickness or personal injury. To qualify as sick pay, it must be paid under a plan to which your employer is a party.

If you receive sick pay from your employer or an agent of your employer, income tax must be withheld. An agent who does not pay regular wages to you may choose to withhold income tax at a flat rate.

However, if you receive sick pay from a third party who isn’t acting as an agent of your em-ployer, income tax will be withheld only if you choose to have it withheld. See Form W-4S, later.

If you receive payments under a plan in which your employer does not participate (such as an accident or health plan where you paid all the premiums), the payments are not sick pay and usually are not taxable.

Union agreements. If you receive sick pay un-der a collective bargaining agreement between your union and your employer, the agreement may determine the amount of income tax with-holding. See your union representative or your employer for more information.

Form W-4S. If you choose to have income tax withheld from sick pay paid by a third party, such as an insurance company, you must fill out Form W-4S. Its instructions contain a worksheet you can use to figure the amount you want with-held. They also explain restrictions that may ap-ply.

Give the completed form to the payer of your sick pay. The payer must withhold according to your directions on the form.

Form W-4S remains in effect until you change or cancel it, or stop receiving payments. You can change your withholding by giving a new Form W-4S or a written notice to the payer of your sick pay.

Estimated tax. If you don’t request withholding on Form W-4S, or if you don’t have enough tax withheld, you may have to pay estimated tax. If you don’t pay enough tax, either through esti-mated tax or withholding, or a combination of both, you may have to pay a penalty. See chap-ter 2.

Chapter 1Tax Withholding for 2019Page 11

Pensions and Annuities

Income tax usually will be withheld from your pension or annuity distributions unless you choose not to have it withheld. This rule applies to distributions from:

An IRA;

A life insurance company under an endow-ment, annuity, or life insurance contract;

A pension, annuity, or profit-sharing plan;

A stock bonus plan; and

Any other plan that defers the time you re-ceive compensation.

The amount withheld depends on whether you receive payments spread out over more than 1 year (periodic payments), within 1 year (nonperiodic payments), or as an eligible roll-over distribution (ERD). Income tax withholding from an ERD is mandatory. ERDs are dis-cussed under Eligible Rollover Distributions, later.

Nontaxable part. The part of your pension or annuity that is a return of your investment in your retirement plan (the amount you paid into the plan or its cost to you) isn’t taxable. Income tax won’t be withheld from the part of your pen-sion or annuity that isn’t taxable. The tax with-held will be figured on, and can’t be more than, the taxable part.

For information about figuring the part of your pension or annuity that isn’t taxable, see Pub. 575, Pension and Annuity Income.

Periodic Payments

Withholding from periodic payments of a pen-sion or annuity is figured in the same way as withholding from salaries and wages. To tell the payer of your pension or annuity how much you want withheld, fill out Form W-4P or a similar form provided by the payer. Follow the rules discussed under Salaries and Wages, earlier, to fill out your Form W-4P.

Note. Use Form W-4, not Form W-4P, if you receive any of the following.

Military retirement pay.

Payments from certain nonqualified defer-red compensation plans. These are em-ployer plans that pay part of your compen-sation at a later time, but are not tax-qualified deferred compensation plans. See Nonqualified Deferred Compensation and Section 457 Plans in Pub. 957, Re-porting Back Pay and Special Wage Pay-ments to the Social Security Administra-tion.

Withholding rules. The withholding rules for pensions and annuities differ from those for sal-aries and wages in the following ways.

If you don’t fill out a withholding certificate, tax will be withheld as if you were married and claiming three withholding allowances.

You can choose not to have tax withheld, regardless of how much tax you owed last year or expect to owe this year. You don’t have to qualify for exemption. See Choos-ing Not To Have Income Tax Withheld, later.

If you don’t give the payer your SSN in the required manner or the IRS notifies the payer before any payment or distribution is made that you gave an incorrect SSN, tax will be withheld as if you were single and were claiming no withholding allowances.

Effective date of withholding certificate. If you give your withholding certificate (Form W-4P or a similar form) to the payer on or be-fore the date your payments start, it will be put into effect by the first payment made more than 30 days after you submit the certificate.

If you give the payer your certificate after your payments start, it will be put into effect with the first payment which is at least 30 days after you submit it. However, the payer can elect to put it into effect earlier.

Nonperiodic Payments

Tax will be withheld at a flat 10% rate on any nonperiodic payments you receive, unless you tell the payer not to withhold.

Use Form W-4P, line 3, to specify that an additional dollar amount be withheld. You also can use Form W-4P, line 1, to choose not to have tax withheld. If you want to revoke a choice not to have tax withheld, see Choosing Not To Have Income Tax Withheld, later.

You may need to use Form W-4P to

ask for additional withholding. If you CAUTION don’t have enough tax withheld, you may need to pay estimated tax, as explained in chapter 2.

Eligible Rollover

Distributions

A distribution you receive that is eligible to be rolled over tax free into a qualified retirement or annuity plan is called an eligible rollover distri-bution (ERD). This is the taxable part of any dis-tribution from a qualified pension plan or tax-sheltered annuity that isn’t any of the follow-ing.

1. A required minimum distribution.

2. One of a series of substantially equal peri-odic pension or annuity payments made over:

a. Your life (or your life expectancy) or the joint lives of you and your benefi-ciary (or your life expectancies), or

b. A specified period of 10 or more years.

3. A hardship distribution.

The payer of a distribution must withhold at a flat 20% rate on any part of an ERD that is dis-tributed rather than rolled over directly to an-other qualified plan. Withholding on these distri-butions is mandatory. However, no withholding is required on any part rolled over directly to an-other plan.

Choosing Not To Have Income Tax Withheld

For payments other than ERDs, you can choose not to have income tax withheld. The payer will tell you how to make this choice. If you use Form W-4P, check the box on line 1 to choose not to have withholding. This choice will remain in effect until you decide you want with-holding and inform the payer. See Revoking a choice not to have tax withheld, later.

The payer must withhold if either of the fol-lowing applies.

You don’t give the payer your SSN in the required manner.

The IRS notifies the payer, before any pay-ment or distribution is made, that you gave it an incorrect SSN.

If you don’t have any income tax withheld from your pension or annuity, or if you don’t have enough withheld, you may have to pay es-timated tax. See chapter 2.

If you don’t pay enough tax, either through estimated tax or withholding, or a combination of both, you may have to pay a penalty.

Payments delivered outside the United States. You generally must have tax withheld from pension or annuity benefits delivered out-side the United States. However, if you are a U.S. citizen or resident alien, you can choose not to have tax withheld if you give the payer of the benefits a home address in the United States or in a U.S. possession. The payer must withhold tax if you provide a U.S. address for a nominee, trustee, or agent to whom the benefits are to be delivered, but don’t provide your own home address in the United States or in a U.S. possession.

Notice required of payer. The payer of your pension or annuity must send you a notice tell-ing you about your right to choose not to have tax withheld.

Generally, the payer won’t send a notice to you if it is reasonable to believe that the entire amount you will be paid isn’t taxable.

Revoking a choice not to have tax withheld. The payer of your pension or annuity will tell you how to revoke your choice not to have in-come tax withheld from periodic or nonperiodic payments. If you use Form W-4P to revoke the choice, enter “Revoked” by the checkbox on line 1 of the form. This will instruct the payer to withhold as if you were married and claiming three allowances. However, you can tell the payer exactly how much to withhold by com-pleting line 2 of the form for periodic payments or line 3 for nonperiodic payments.

Gambling Winnings

Income tax is withheld at a flat 24% rate from certain kinds of gambling winnings.

Gambling winnings of more than $5,000 from the following sources are subject to in-come tax withholding.

Any sweepstakes; wagering pool, includ-ing payments made to winners of poker tournaments; or lottery.

Page 12Chapter 1Tax Withholding for 2019

Any other wager if the proceeds are at least 300 times the amount of the bet.

It does not matter whether your winnings are paid in cash, in property, or as an annuity. Win-nings not paid in cash are taken into account at their fair market value.

Exception. Gambling winnings from bingo, keno, and slot machines generally are not sub-ject to income tax withholding. However, you may need to provide the payer with an SSN to avoid withholding. See Backup withholding on gambling winnings, later. If you receive gam-bling winnings not subject to withholding, you may need to pay estimated tax. See chapter 2.

If you don’t pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty.

Form W-2G. If a payer withholds income tax from your gambling winnings, you should re-ceive a Form W-2G, Certain Gambling Win-nings, showing the amount you won and the amount withheld.

Report the tax withheld on your 2019 Form 1040, along with all other federal income tax withheld, as shown on Forms W-2 and 1099.

Information to give payer. If the payer asks, you must give the payer all the following infor-mation.

Your name, address, and SSN.

Whether you made identical wagers (ex-plained below).

Whether someone else is entitled to any part of the winnings subject to withholding. If so, you must complete Form 5754, Statement by Person(s) Receiving Gam-bling Winnings, and return it to the payer. The payer will use it to prepare a Form W-2G for each of the winners.

Identical wagers. You may have to give the payer a statement of the amount of your winnings, if any, from identical wagers. If this statement is required, the payer will ask you for it. You provide this statement by signing Form W-2G or, if required, Form 5754.

Identical wagers include two bets placed in a pari-mutuel pool on one horse to win a partic-ular race. However, the bets are not identical if one bet is “to win” and one bet is “to place.” In addition, they are not identical if the bets were placed in different pari-mutuel pools. For exam-ple, a bet in a pool conducted by the racetrack and a bet in a separate pool conducted by an offtrack betting establishment in which the bets are not pooled with those placed at the track are not identical wagers.

Backup withholding on gambling winnings. If you have any kind of gambling winnings and don’t give the payer your SSN, the payer may have to withhold income tax at a flat 24% rate. This rule also applies to winnings of at least $1,200 from bingo or slot machines or $1,500 from keno, and to certain other gambling win-nings of at least $600.

Unemployment

Compensation

You can choose to have income tax withheld from unemployment compensation. To make this choice, fill out Form W-4V (or a similar form provided by the payer) and give it to the payer.

All unemployment compensation is taxable. So, if you don’t have income tax withheld, you may have to pay estimated tax. See chapter 2.

If you don’t pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty.

Form 1099-G. If you receive $10 or more in unemployment compensation, you will receive a Form 1099-G, Certain Government Pay-ments. Box 1 will show the amount of unem-ployment compensation you got for the year. Box 4 will show the amount of federal income tax withheld, if any.

Federal Payments

You can choose to have income tax withheld from certain federal payments you receive. These payments are the following.

1. Social security benefits.

2. Tier 1 railroad retirement benefits.

3. Commodity credit corporation loans you choose to include in your gross income.

4. Payments under the Agricultural Act of 1949 (7 U.S.C. 1421 et seq.), as amen-ded, or title II of the Disaster Assistance Act of 1988 that are treated as insurance proceeds and that you received because:

a. Your crops were destroyed or dam-aged by drought, flood, or any other natural disaster; or

b. You were unable to plant crops be-cause of a natural disaster described in (a).

5. Dividends and other distributions from Alaska Native Corporations to its share-holders.

6. Any other payment under federal law as determined by the Secretary.

To make this choice, fill out Form W-4V (or a similar form provided by the payer) and give it to the payer.

If you don’t choose to have income tax with-held, you may have to pay estimated tax. See chapter 2.

If you don’t pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty.

More information. For more information about the tax treatment of social security and railroad retirement benefits, get Pub. 915, Social Secur-ity and Equivalent Railroad Retirement Benefits. Get Pub. 225, Farmer's Tax Guide, for informa-tion about the tax treatment of commodity credit corporation loans or crop disaster payments.

Payment to shareholders of Alaska Native Corporations (ANCs). If you are a share-holder of an ANC, you can request to have in-come tax withheld from dividends and other dis-tributions you receive from the ANC. To make this request, fill out Form W-4V (or a similar form provided by the payer) and give it to the payer. A request for withholding isn’t effective until the ANC indicates in writing that it accepts the request or begins withholding. Contact the payer if it isn’t clear that the payer has accepted your Form W-4V.

If you don’t choose to have income tax with-held, or the ANC doesn’t accept your request, you may have to pay estimated tax. See chap-ter 2.

If you don’t pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty.

Backup Withholding

Banks or other businesses that pay you certain kinds of income must file an information return (Form 1099) with the IRS. The information re-turn shows how much you were paid during the year. It also includes your name and taxpayer identification number (TIN). TINs are explained later in this discussion.

These payments generally are not subject to withholding. However, “backup” withholding is required in certain situations.

Payments subject to backup withholding. Backup withholding can apply to most kinds of payments that are reported on Form 1099. These include:

Interest payments (Form 1099-INT);

Government payments (Form 1099-G);

Dividends (Form 1099-DIV);

Patronage dividends, but only if at least half the payment is in money (Form 1099-PATR);

Rents, profits, or other gains (Form 1099-MISC);

Commissions, fees, or other payments for work you do as an independent contractor (Form 1099-MISC);

Payments by brokers (Form 1099-B);

Payments by fishing boat operators, but only the part that is in money and that rep-resents a share of the proceeds of the catch (Form 1099-MISC); and

Royalty payments (Form 1099-MISC).

Backup withholding also may apply to gambling winnings. See Backup withholding on gambling winnings under Gambling Winnings, earlier.

Payments not subject to backup withhold-ing. Backup withholding does not apply to pay-ments reported on Form 1099-MISC (other than payments by fishing boat operators and royalty payments) unless at least one of the following three situations applies.

The amount you receive from any one payer is $600 or more.

The payer had to give you a Form 1099 last year.

The payer made payments to you last year that were subject to backup withholding.

Chapter 1Tax Withholding for 2019Page 13

Form 1099 and backup withholding are gen-erally not required for a payment of less than $10.

Withholding rules. When you open a new ac-count, make an investment, or begin to receive payments reported on Form 1099, the bank or other business will give you Form W-9, Request for Taxpayer Identification Number and Certifi-cation, or a similar form. You must enter your TIN on the form and, if your account or invest-ment will earn interest or dividends, you also must certify (under penalties of perjury) that your TIN is correct and that you are not subject to backup withholding.

The payer must withhold at a flat 24% rate in the following situations.

You don’t give the payer your TIN in the re-quired manner.

The IRS notifies the payer that the TIN you gave is incorrect.

You are required, but fail, to certify that you are not subject to backup withholding.

The IRS notifies the payer to start withhold-ing on interest or dividends because you have underreported interest or dividends on your income tax return. The IRS will do this only after it has mailed you four notices over at least a 210-day period.

Taxpayer identification number (TIN).

Your TIN is one of the following three numbers.

An SSN.

An employer identification number (EIN).

An IRS individual taxpayer identification number (ITIN). Aliens who don’t have an

SSN and are not eligible to get one should get an ITIN. Use Form W-7, Application for IRS Individual Taxpayer Identification Number, to apply for an ITIN.

An ITIN is for federal tax use only. It does not entitle you to social security benefits or change your employment or immigration status under U.S. law. For more information on ITINs, get Pub. 1915, Understanding Your IRS Individ-ual Taxpayer Identification Number.

If you were assigned an ITIN before

January 1, 2013, or if you have an ITIN CAUTION that you haven’t included on a tax re-turn in the last 3 consecutive years, you may need to renew it. For more information, see the Instructions for Form W-7.

How to prevent or stop backup withholding. If you have been notified by a payer that the TIN you gave is incorrect, you usually can prevent backup withholding from starting or stop backup withholding once it has begun by giving the payer your correct name and TIN. You must certify that the TIN you give is correct.

However, the payer will provide additional instructions if the TIN you gave needs to be vali-dated by the Social Security Administration or by the IRS. This may happen if both the follow-ing conditions exist.

1. The IRS notifies the payer twice within 3 calendar years that a TIN you gave for the same account is incorrect.

2. The incorrect TIN is still being used on the account when the payer receives the sec-ond notice.

Underreported interest or dividends. If you have been notified that you underreported interest or dividends, you must request and re-ceive a determination from the IRS to prevent backup withholding from starting or to stop backup withholding once it has begun. Your re-quest must show that at least one of the follow-ing situations applies.

No underreporting occurred.

You have a bona fide dispute with the IRS about whether an underreporting occurred.

Backup withholding will cause or is caus-ing an undue hardship and it is unlikely that you will underreport interest and dividends in the future.

You have corrected the underreporting by filing an original return if you didn’t previ-ously file one, or by filing an amended re-turn, and by paying all taxes, penalties, and interest due for any underreported in-terest or dividend payments.

If the IRS determines that backup withhold-ing should stop, it will provide you with certifica-tion and will notify the payers who were sent no-tices earlier.

Penalties. There are civil and criminal penal-ties for giving false information to avoid backup withholding. The civil penalty is $500. The crimi-nal penalty, upon conviction, is a fine of up to $1,000 or imprisonment of up to 1 year, or both.

Worksheets for Chapter 1

Use the following worksheets to figure your correct withholding and adjustments.

Use...		To...
Worksheet 1-1 and		Figure your total expected income for 2019 to determine if you are exempt from withholding. Use Worksheet
Worksheet 1-2		1-1 if, in 2018 you had a right to a refund of all federal income tax withheld because of no tax liability. Use
Exemption From Withholding for		Worksheet 1-2, if you are a dependent for 2019 and, for 2018, you had a refund of all federal income tax
Persons/Dependents Age 65 or		withheld because of no tax liability.
Older or Blind
Worksheet 1-3		Project the taxable income you will have for 2019 and figure the amount of tax you will have to pay on that
Projected Tax	for 2019	income.
Worksheet 1-4		Figure the amount of tax on your projected taxable income.
Tax Computation	Worksheets for
2019
Worksheet 1-5		Project the amount of federal income tax that you will have withheld in 2019, compare your projected
Projected Withholding for 2019		withholding with your projected tax, and determine whether the amount withheld each payday should be
		adjusted.
Worksheet 1-6		Figure the amount to enter on line G of the Personal Allowances Worksheet to account for your projected tax
Converting Credits to Withholding		credits that are not otherwise taken into consideration.
Allowances for 2019 Form W-4

Page 14Chapter 1Tax Withholding for 2019

Worksheet 1-1. Exemption From Withholding for Persons Age 65 or Older or Blind

Use this worksheet only if, for 2018, you had a right to a refund of all federal income tax withheld because you had no tax liability.

Caution. This worksheet does not apply if you can be claimed as a dependent. See Worksheet 1-2 instead.

1. Check the boxes below that apply to you.
65 or older	Blind
2. Check the boxes below that apply to your spouse’s standard deduction.*
65 or older	Blind
3. Add the number of boxes you checked in
1 and 2 above. Enter the result . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

You can claim exemption from withholding if:
		and your 2019
Your filing status is:	and the number on line 3 above is:	total income will
		be no more than:
Single	1	$13,850
	2	15,500
Head of	1	$20,000
household	2	21,650
Married filing	1	$13,500
separately for	2	14,800
both 2018 and	3	16,100
2019	4	17,400
Other married	1	$25,700**
status	2	27,000**
	3	28,300**
	4	29,600**
** Include both spouses' income whether you will file separately or jointly.
Qualifying	1	$25,700
widow(er)	2	27,000

You can’t claim exemption from withholding if your total income will be more than the amount shown for your filing status.

* You can check the appropriate boxes for your spouse if your filing status is married filing jointly. You can check the appropriate boxes for your spouse if your filing status is married filing separately and your spouse had no income, isn't filing a return, and can't be claimed as a dependent on another person's return.

Worksheet 1-2. Exemption From Withholding for Dependents Age 65 or Older or Blind

Use this worksheet only if, for 2019, you are a dependent and if, for 2018, you had a right to a refund of all federal income tax withheld because you had no tax liability.

1.	Enter your expected earned income plus $350 . . . . . . . . . . . . .	..............................._1.
2.	Minimum amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	..............................._2.	$ 1,100
3.	. . . . . . .Comparelines1and2.Enterthelargeramount....	................................_3.
4.	Limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	..............................._4.	12,200
5.	. . . . . . . .Comparelines3and4.Enterthesmalleramount..	..............................._5.
6.	. . . . . . .Entertheappropriateamountfromthefollowingtable	..............................._6.
	Single	$1,650
	Either 65 or older or blind
	Both 65 or older and blind	3,300
	Married filing separately	1,300
	Either 65 or older or blind
	Both 65 or older and blind	2,600
7.	Add lines 5 and 6. Enter the result . . . . . . . . . . . . . . . . . . . . . . . .	..............................._7.
8.	. . . . . . .Enteryourtotalexpectedincome................. .	..............................._8.

You can claim exemption from withholding if line 7 is equal to or more than line 8. You can’t claim exemption from withholding if line 8 is more than line 7.

Chapter 1Tax Withholding for 2019Page 15

Worksheet 1-3. Projected Tax for 2019				Keep for Your Records
Use this worksheet to figure your projected tax for 2019. Note. Enter combined amounts if married filing jointly.
1.	Enter amount of adjusted gross income (AGI) you expect in 2019. (To determine this, you may want to start with
	the AGI on your last year's return, and add or subtract your expected changes. Also take into account items listed
	under What's New for 2019, earlier.)
	Note. If self-employed, first complete Worksheet 2-3 to figure your expected deduction for self-employment tax.				1.
	Subtract the amount from Worksheet 2-3, line 11, to figure the line 1 entry . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.	If you:
	•	Don’t plan to itemize deductions on Schedule A (Form 1040), use Worksheet 2-4 to figure your expected
		standard deduction and enter that amount here.
	•	Plan to itemize deductions, enter the amount of your estimated itemized deductions. Itemized deductions for
		2019 include qualifying home mortgage interest, charitable contributions, state and local taxes (up to $10,000),
		medical expenses in excess of 10% of your adjusted gross income, and gambling losses and other
		miscellaneous deductions that aren’t subject to the 2% floor.
	•	Qualify for the deduction for qualified business income, enter the estimated amount of the deduction you are
		allowed on your qualified business income from a qualified trade or business. Add this amount to your expected			2.
		standard deduction or estimated itemized deductions and enter the total here . . . . . . . . . . . . . . . . . . .		.....
3.	Expected taxable income. Subtract line 2 from line 1 (if zero or less, enter -0- here and on line 4,				3.
	then go to line 5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.	If the amount on line 1:
	•	Doesn’t include a net capital gain or qualified dividends and you didn’t exclude foreign earned income or
		exclude or deduct foreign housing in arriving at the amount on line 1, use Worksheet 1-4 to figure the tax to
		enter here.
	•	Includes a net capital gain or qualified dividends, use Worksheet 2-5 to figure the tax to enter here.
	•	Was figured by excluding foreign earned income or excluding or deducting foreign housing, use			4.
		Worksheet 2-6 to figure the tax to enter here . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.	Enter any expected additional taxes from an election to report your child's interest and dividends, lump-sum				5.
	distributions (Form 4972), and alternative minimum tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Addlines4and5				6.
7.	Enter the amount of any expected tax credits. See		Table 1-2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		7.

8.	Subtract line 7 from line 6 (if zero or less, enter -0-)
	..............................................				8.
9.	Self-employment tax. Enter the amount from Worksheet 2-3, line 10. (If you expect to file jointly and both of you				9.
	are self-employed, figure the self-employment tax for each of you separately and enter the total on line 9.)			.....
10.	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Enterthetotalofanyotherexpectedtaxes*				10.
11.	. . . . . . . . . . .Projectedtaxfor2019.Addlines8through10.EnterthetotalhereandonWorksheet1-5,line1				11.

Use the instructions for the 2018 Form 1040 to determine if you expect to owe, for 2019, any of the taxes that would have been entered on your 2018 Schedule 4 (Form 1040), lines 58, 59, 60 (box a or b), and 62.

Page 16Chapter 1Tax Withholding for 2019

Worksheet 1-4. Tax Computation Worksheets for 2019Keep for Your Records

Note. If you are figuring the tax on an amount from Worksheet 2-5 (line 1 or 14), or Worksheet 2-6 (line 2 or 3), enter the amount from that worksheet in column (a) of the row that applies to that amount of income. Enter the result on the appropriate line of the worksheet you are completing.

a. Single. Use this worksheet to figure the amount to enter on Worksheet 1-3, line 4, if you expect your filing status for 2019 to be Single.

Expected Taxable		(a)	(b)	(c)	(d)	(e)
Income		Enter amount	Multiplication amount	Multiply	Subtraction	Subtract (d) from (c). Enter the result
If Worksheet 1-3,		from		(a) by (b)	amount	here and on Worksheet 1-3, line 4*
		Worksheet 1-3,
line 3* is —
		line 3*
Over	But not

	over
$0	$9,700		× 10% (0.10)		$0
9,700	39,475		× 12% (0.12)		194.00
39,475	84,200		× 22% (0.22)		4,141.50
84,200	160,725		× 24% (0.24)		5,825.50
160,725	204,100		× 32% (0.32)		18,683.50
204,100	510,300		× 35% (0.35)		24,806.50
510,300	-----		× 37% (0.37)		35,012.50

If you are using Worksheet 2-5, for column (a) above, use the amount from line 1 or line 14 and enter the result (from column (e)) on line 37 or line 39, as appropriate.

If you are using Worksheet 2-6, for column (a) above, use the amount from line 2 or line 3 and enter the result (from column (e)) on line 4 or line 5, as appropriate.

b. Head of Household. Use this worksheet to figure the amount to enter on Worksheet 1-3, line 4, if you expect your filing status for 2019 to be Head of Household.

Expected Taxable		(a)	(b)	(c)	(d)	(e)
Income		Enter amount	Multiplication	Multiply	Subtraction	Subtract (d) from (c). Enter the result
If Worksheet 1-3,		from	amount	(a) by (b)	amount	here and on Worksheet 1-3, line 4*
		Worksheet 1-3,
line 3* is —
		line 3*
Over	But not

	over
$0	$13,850		× 10% (0.10)		$0
13,850	52,850		× 12% (0.12)		277.00
52,850	84,200		× 22% (0.22)		5,562.00
84,200	160,700		× 24% (0.24)		7,246.00
160,700	204,100		× 32% (0.32)		20,102.00
204,100	510,300		× 35% (0.35)		26,225.00
510,300	-----		× 37% (0.37)		36,431.00

If you are using Worksheet 2-5, for column (a) above, use the amount from line 1 or line 14 and enter the result (from column (e)) on line 37 or line 39, as appropriate.

If you are using Worksheet 2-6, for column (a) above, use the amount from line 2 or line 3 and enter the result (from column (e)) on line 4 or line 5, as appropriate.

Chapter 1Tax Withholding for 2019Page 17

Tax Computation Worksheet for 2019 (Continued)

c. Married Filing Jointly or Qualifying Widow(er). Use this worksheet to figure the amount to enter on Worksheet 1-3, line 4, if you expect your filing status for 2019 to be Married Filing Jointly or Qualifying Widow(er).

Expected Taxable		(a)	(b)	(c)	(d)	(e)
Income		Enter amount	Multiplication	Multiply	Subtraction	Subtract (d) from (c). Enter the result
If Worksheet 1-3,		from	amount	(a) by (b)	amount	here and on Worksheet 1-3, line 4*
		Worksheet 1-3,
line 3* is —
		line 3*
Over	But not

	over
$0	$19,400		× 10% (0.10)		$0
19,400	78,950		× 12% (0.12)		388.00
78,950	168,400		× 22% (0.22)		8,283.00
168,400	321,450		× 24% (0.24)		11,651.00
321,450	408,200		× 32% (0.32)		37,367.00
408,200	612,350		× 35% (0.35)		49,613.00
612,350	-----		× 37% (0.37)		61,860.00

If you are using Worksheet 2-5, for column (a) above, use the amount from line 1 or line 14 and enter the result (from column (e)) on line 37 or line 39, as appropriate.

If you are using Worksheet 2-6, for column (a) above, use the amount from line 2 or line 3 and enter the result (from column (e)) on line 4 or line 5, as appropriate.

d. Married Filing Separately. Use this worksheet to figure the amount to enter on Worksheet 1-3, line 4, if you expect your filing status for 2019 to be Married Filing Separately.

Expected Taxable		(a)	(b)	(c)	(d)	(e)
Income		Enter amount from	Multiplication amount	Multiply	Subtraction	Subtract (d) from (c). Enter the result
If Worksheet 1-3,		Worksheet 1-3,		(a) by (b)	amount	here and on Worksheet 1-3, line 4*
		line 3*
line 3* is —
Over	But not
	over
$0	$9,700		× 10% (0.10)		$0
9,700	39,475		× 12% (0.12)		194.00
39,475	84,200		× 22% (0.22)		4,141.50
84,200	160,725		× 24% (0.24)		5,825.50
160,725	204,100		× 32% (0.32)		18,683.50
204,100	306,175		× 35% (0.35)		24,806.50
306,175	-----		× 37% (0.37)		30,930.00

If you are using Worksheet 2-5, for column (a) above, use the amount from line 1 or line 14 and enter the result (from column (e)) on line 37 or line 39, as appropriate.

If you are using Worksheet 2-6, for column (a) above, use the amount from line 2 or line 3 and enter the result (from column (e)) on line 4 or line 5, as appropriate.

Page 18Chapter 1Tax Withholding for 2019

Worksheet 1-5. Projected Withholding for 2019Keep for Your Records

Use this worksheet to figure the amount of your projected withholding for 2019, compare it to your projected tax for 2019, and, if necessary, figure an additional amount to have withheld each payday.

Note. If married filing jointly, enter combined amounts.

1. Enter your projected tax for 2019 from Worksheet 1-3, line 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ._1.

2. Enter your total federal income tax withheld to date in 2019 from all sources of income. (For wages, you should be

3.	able to find the withholding-to-date on your last pay slip or statement.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2.
	Enter the federal tax withholding you expect for the rest of 2019.
	a. For each source of wages, multiply the amount of federal income tax now being withheld each payday by the	3a.
	number of paydays remaining in the year and enter the combined amount for all jobs . . . . . . . . . . . . . . . . . . . . .
	b. For all other sources of recurring taxable income, multiply the withholding amount by the remaining number of
	times the income is expected. For example, if you have federal income tax withheld from your monthly pension	3b.
	and you will receive nine more payments this year, multiply your monthly withholding amount by 9 . . . . . . . . . . .
4.	Add lines 2, 3a, and 3b. This is your projected withholding for 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4.
5.	Compare the amounts on lines 1 and 4.
	• If line 1 is more than line 4, subtract line 4 from line 1. Enter the result here and go to line 6 . . . . . . . . . . . . . . . .	5.

If line 4 is more than line 1, stop here and see How Do You Decrease Your Withholding, earlier.

5. Divide line 5 by the number of paydays (or other withholding events) remaining in 2019 and enter the result. This is the additional amount you should have withheld from each remaining payment. Enter this amount on Form

W-4, line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.

Chapter 1Tax Withholding for 2019Page 19

Worksheet 1-6. Converting Credits to Withholding Allowances	Keep for Your Records
for 2019 Form W-4

Use this worksheet to figure the amount to enter on line G of the Personal Allowances Worksheet. For more information on these credits, see Converting Credits to Withholding Allowances, earlier.

Caution. If you enter an amount on line 1, enter -0- on line E of the Form W-4 Personal Allowances Worksheet. If you enter an amount on line 2, enter -0- on line F of the Form W-4 Personal Allowances Worksheet.

For lines 1 through 11, enter the projected amount for each credit you expect to take.
1.	Child tax credit (including the additional child tax credit) (see Caution above) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1.
2.	Credit for other dependents (see Caution above) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		2.
3.	Credit for the elderly or the disabled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		3.
4.	Credit for child and dependent care expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		4.
5.	Education credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		5.
6.	Adoption credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		6.
7.	Foreign tax credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		7.
8.	Retirement savings contributions credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		8.
9.	Earned income credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		9.
10.	Premium tax credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		10.
11.	Other credits (see Table 1-2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		11.
12.
	Head of household adjustment. If you are filing as head of household and your adjusted gross income is:
	•	$32,200 or less, enter $185
	•	$32,201 to $71,200, enter $300	12.
13.	•	$71,201 or higher, enter $1,800 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
	Add lines 1 through 12. This is your total estimated tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		13.

14. Using the table below that matches your filing status, find the line in the table that matches your combined income from all sources. Then, enter on line 14 the multiplication factor shown next to your income.

	Married Filing Jointly				Head of Household
	or Qualifying Widow(er)

If your combined income from all			Multiply	If your combined income from all			Multiply
sources is:			credits by:	sources is:			credits
							by:
$0	–	$43,800	10.0	$0	–	$32,200	10.0
43,801	–	103,350	8.3	32,201	–	71,200	8.3
103,351	–	192,800	4.5	71,201	–	102,550	4.5
192,801	–	345,850	4.2	102,551	–	179,050	4.2
345,851	–	432,600	3.1	179,051	–	222,450	3.1
432,601	–	636,750	2.9	222,451	–	528,650	2.9
636,751	and over		2.7	528,651	and over		2.7

			Single		Married Filing Separately
	If your combined income from all			Multiply	If your combined income from all			Multiply
	sources is:			credits by:	sources is:			credits
								by:
	$0	–	$21,900	10.0	$0	–	$21,900	10.0
	21,901	–	51,675	8.3	21,901	–	51,675	8.3
	51,676	–	96,400	4.5	51,676	–	96,400	4.5
	96,401	–	172,925	4.2	96,401	–	172,925	4.2
	172,926	–	216,300	3.1	172,926	–	216,300	3.1
	216,301	–	522,500	2.9	216,301	–	318,375	2.9
	522,501 and over			2.7	318,376	and over		2.7	14.
15. Multiply line 13 by line 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .									15.

16. Divide line 15 by $4,200. Drop any fraction. Enter the result here and on line G of the Personal Allowances

Worksheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16.

Page 20Chapter 1Tax Withholding for 2019

Figure 2-A. Do You Have To Pay Estimated Tax?

Start Here

1. Will you owe $1,000 or more for 2019 after subtracting income tax withholding and refundable credits* from your total tax? (Don’t subtract any estimated tax payments.)

No

	2a. Will your income tax			2b. Will your income tax withholding
	withholding and refundable			and refundable credits* be at		No
Yes	credits* be at least 90%		No	least 100%** of the tax shown

	(662⁄3% for farmers and			on your 2018 tax return?
	shermen) of the tax shown on
	your 2019 tax return?			*Note:* Your 2018 return must
				have covered a 12-month
		Yes		period.

				Yes



You are NOT required to pay					You MUST make estimated
estimated tax.					tax payment(s) by the
					required due date(s).
					See When To Pay
					Estimated Tax.

Use the refundable credits shown on the 2019 Estimated Tax Worksheet, line 11b.

110% if less than two-thirds of your gross income for 2018 and 2019 is from farming or shing and your 2018 adjusted gross income was more than $150,000 ($75,000 if your ling status for 2019 is married ling a separate return).

2.

Estimated Tax for 2019

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.

You were a U.S. citizen or resident alien for the whole year.

Your 2018 tax year covered a 12-month period.

You had no tax liability for 2018 if your total tax (defined later under Total tax for 2018—line 12b) was zero or you didn’t have to file an income tax return.

Introduction

Estimated tax is the method used to pay tax on income that isn’t subject to withholding. This in-cludes income from self-employment, interest, dividends, rent, gains from the sale of assets, prizes, and awards. You also may have to pay estimated tax if the amount of income tax being withheld from your salary, pension, or other in-come isn’t enough.

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. If you don’t pay enough tax, either through with-holding or estimated tax, or a combination of both, you may have to pay a penalty. If you don’t pay enough by the due date of each pay-ment 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. For information on when the penalty applies, see chapter 4.

It would be helpful for you to have a TIP copy of your 2018 tax return and an es-timate of your 2019 income nearby while reading this chapter. Also keep in mind

the items under What’s New for 2019, earlier.

Useful Items

You may want to see:

Form (and Instructions) 1040-ES Estimated Tax for Individuals

See How To Get Tax Help at the end of this publication for information about how to get this publication and form.

Worksheets. You may need to use several of the blank worksheets included in this chapter. See Worksheets for Chapter 2 to locate what you need.

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. To do this, file a new Form W-4 with your employer. See chapter 1.

Estimated tax not required. You don’t have to pay estimated tax for 2019 if you meet all three of the following conditions.

You had no tax liability for 2018.

Who Must Pay

Estimated Tax

If you owed additional tax for 2018, you may have to pay estimated tax for 2019.

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.

General Rule

In most cases, you must pay estimated tax for 2019 if both of the following apply.

1. You expect to owe at least $1,000 in tax for 2019, after subtracting your withholding and refundable credits.

2. You expect your withholding and refunda-ble credits to be less than the smaller of:

a. 90% of the tax to be shown on your

2019 tax return, or

b. 100% of the tax shown on your 2018 tax return. Your 2018 tax return must cover all 12 months.

Note. The percentages in (2a) or (2b) just listed may be different if you are a farmer, fisherman,

Chapter 2Estimated Tax for 2019Page 21

or higher income taxpayer. See Special Rules, later.

If the result from using the general rule

above suggests that you won’t have CAUTION enough withholding, complete the 2019 Estimated Tax Worksheet for a more ac-curate calculation.

Figure 2-A takes you through the general rule. You may find this helpful in determining if you must pay estimated tax.

If all your income will be subject to in-TIP come tax withholding, you probably

don’t need to pay estimated tax.

Example 1. Jane Smart uses Figure 2-A and the following information to figure whether she should pay estimated tax for 2019. She files as head of household, takes the standard de-duction, and expects no refundable credits for 2019.

Expected adjusted gross income (AGI)

for 2019 . . . . . . . . . . . . . . . . . . . . . . . $74,550 AGI for 2018 . . . . . . . . . . . . . . . . . . . . . $57,150 Total tax on 2018 return (Form 1040

line 15) . . . . . . . . . . . . . . . . . . . . . . . . $ 7,127 Total 2019 estimated tax (line 11c of

the 2018 Estimated Tax

Worksheet) . . . . . . . . . . . . . . . . . . . . $11,015 Tax expected to be withheld in

2019 .......................... $10,000

Jane's answer to Figure 2-A, box 1, is YES; she expects to owe at least $1,000 for 2019 af-ter subtracting her withholding from her expec-ted total tax ($11,015 − $10,000 = $1,015). Her answer to box 2a is YES; she expects her in-come tax withholding ($10,000) to be at least 90% of the tax to be shown on her 2019 return ($11,015 × 90% (0.90) = $9,913.50). Jane does not need to pay estimated tax.

Example 2. The facts are the same as in Example 1, except that Jane expects only $7,000 tax to be withheld in 2019. Because that is less than $9,913.50, her answer to box 2a is NO.

Jane's answer to box 2b is also NO; she does not expect her income tax withholding ($7,000) to be at least 100% of the total tax shown on her 2018 return ($7,127). Jane must increase her withholding or pay estimated tax for 2019.

Example 3. The facts are the same as in Example 2, except that the total tax shown on Jane's 2018 return was $6,400. Because she expects to have more than $6,400 withheld in 2019 ($7,000), her answer to box 2b is YES. Jane does not need to pay estimated tax for 2019.

Married Taxpayers

If you qualify to make joint estimated tax pay-ments, apply the rules discussed here to your joint estimated income.

You and your spouse can make joint estima-ted tax payments even if you are not living to-gether.

However, you and your spouse can’t make			Tax on $40,100 based on separate				$4,767
joint estimated tax payments if:				return . . . . . . . . . . . . . . . . . . . . . . . . . .
•	You are legally separated under a decree		Tax on $8,400 based on separate				843
•	of divorce or separate maintenance,			return . . . . . . . . . . . . . . . . . . . . . . . . . .
	You and your spouse have different tax		Total		............................		$5,610
	years, or
•	Either spouse is a nonresident alien (un-		Joe's percentage of total ($4,767 ÷				85%
				$5,610) .........................
	less that spouse elected to be treated as a		Joe's share of tax on joint return				$4,626
	resident alien for tax purposes). See			($5,442×85%(0.85)) . . . . . . . . . . . . . .
	Choosing Resident Alien Status in Pub.

	519.		Special Rules
Note. Individuals of the same sex and op-
posite sex who are in registered domestic part-			There are special rules for farmers, fishermen,
nerships, civil unions, or other similar formal re-			and certain higher income taxpayers.
lationships that are not marriages under state
law can’t make joint estimated tax payments.			Farmers and Fishermen
These individuals can take credit only for the
estimated tax payments that he or she made.			If at least two-thirds of your gross income for
If you and your spouse can’t make joint esti-			2018 or 2019 is from farming or fishing, substi-
mated tax payments, apply these rules to your			tute 662/3% for 90% in (2a) under			General Rule		,
separate estimated income.			later.
Making joint or separate estimated tax pay-			Gross income. Your gross income is all in-
ments won’t affect your choice of filing a joint			come you receive in the form of money, goods,
tax return or separate returns for 2019.			property, and services that isn’t exempt from
2018 separate returns and 2019 joint re-			tax. To determine whether two-thirds of your
			gross income for 2018 was from farming or fish-
turn. If you plan to file a joint return with your			ing, use as your gross income the total of the in-
spouse for 2019, but you filed separate returns			come (not loss) amounts.
for 2018, your 2018 tax is the total of the tax			Joint returns. On a joint return, you must add
shown on your separate returns. You filed a
separate return if you filed as single, head of			your spouse's gross income to your gross in-
household, or married filing separately.			come to determine if at least two-thirds of your
2018 joint return and 2019 separate re-			total gross income is from farming or fishing.
			Gross income from farming. This is income
turns. If you plan to file a separate return for
2019, but you filed a joint return for 2018, your			from cultivating the soil or raising agricultural
2018 tax is your share of the tax on the joint re-			commodities. It includes the following amounts.
turn. You file a separate return if you file as sin-			•	Income from operating a stock, dairy, poul-
gle, head of household, or married filing sepa-				try, bee, fruit, or truck farm.
rately.			•	Income from a plantation, ranch, nursery,
To figure your share of the tax on a joint re-				range, orchard, or oyster bed.
turn, first figure the tax both you and your			•	Crop shares for the use of your land.
spouse would have paid had you filed separate				Gains from sales of draft, breeding, dairy,
returns for 2018 using the same filing status for			•	or sporting livestock.
2019. Then multiply the tax on the joint return				For 2018, gross income from farming is the
by the following fraction.
			total of the following amounts.
			•	Schedule F (Form 1040), Profit or Loss
		The tax you would have paid		From Farming, line 9.
		had you filed a separate	•	Form 4835, Farm Rental Income and Ex-
		return	•	penses, line 7.
				Your share of the gross farming income
		The total tax you and your
				from a partnership, S corporation, estate or
		spouse would have paid		trust, from Schedule K-1 (Form 1065),
		had you filed separate		Schedule K-1 (Form 1120S), or Sched-
		returns	•	ule K-1 (Form 1041).
*Example.* Joe and Heather filed a joint re-				Your gains from sales of draft, breeding,
				dairy, or sporting livestock shown on Form
turn	for 2018 showing taxable income of			4797, Sales of Business Property.
$48,500 and a tax of $5,442. Of the $48,500				Wages you receive as a farm employee and
taxable income, $40,100 was Joe's and the rest
			wages you receive from a farm corporation are
was Heather's. For 2019, they plan to file mar-
			not gross income from farming.
ried filing separately. Joe figures his share of

the tax on the 2018 joint return as follows.			Gross income from fishing. 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, sea-
			weeds, or other aquatic forms of animal and
			vegetable life.

Page 22Chapter 2Estimated Tax for 2019

Gross income from fishing includes the fol-lowing amounts.

Schedule C (Form 1040), Profit or Loss From Business, line 7.

Income for services as an officer or crew member of a vessel while the vessel is en-gaged in fishing.

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 Sched-ule K-1 (Form 1041).

Certain taxable interest and punitive dam-age awards received in connection with the Exxon Valdez litigation.

Income for services normally performed in connection with fishing.

Services normally performed in connection with fishing include:

Shore service as an officer or crew mem-ber of a vessel engaged in fishing; and

Services that are necessary for the imme-diate preservation of the catch, such as cleaning, icing, and packing the catch.

Higher Income Taxpayers

If your AGI for 2018 was more than $150,000 ($75,000 if your filing status for 2019 is married filing a separate return), substitute 110% for 100% in (2b) under General Rule, later.

For 2018, AGI is the amount shown on Form 1040, line 7.

Note. This rule does not apply to farmers and fishermen.

Aliens

Resident and nonresident aliens also may have to pay estimated tax. Resident aliens should fol-low the rules in this publication, unless noted otherwise. Nonresident aliens should get Form 1040-ES (NR), U.S. Estimated Tax for Nonresi-dent Alien Individuals.

You are an alien if you are not a citizen or national of the United States. You are a resident alien if you either have a green card or meet the substantial presence test.

For more information about withholding, the substantial presence test, and Form 1040-ES (NR), see Pub. 519.

Estates and Trusts

Estates and trusts also must pay estimated tax. However, estates (and certain grantor trusts that receive the residue of the decedent's es-tate under the decedent's will) are exempt from paying estimated tax for the first 2 years after the decedent's death.

Estates and trusts must use Form 1041-ES, Estimated Income Tax for Estates and Trusts, to figure and pay estimated tax.

How To Figure

Estimated Tax

To figure your estimated tax, you must figure your expected AGI, taxable income, taxes, de-ductions, and credits for the year.

When figuring your 2019 estimated tax, it may be helpful to use your income, deductions, and credits for 2018 as a starting point. Use your 2018 federal tax return as a guide. You can use Form 1040-ES to figure your estimated tax. Nonresident aliens use Form 1040-ES (NR) to figure estimated tax.

You must make adjustments both for changes in your own situation and for recent changes in the tax law. Some of these changes are discussed earlier under What's New for 2019. For information about these and other changes in the law, visit the IRS website at IRS.gov.

The instructions for Form 1040-ES include a worksheet to help you figure your estimated tax. Keep the worksheet for your records.

2019 Estimated Tax Worksheet

Use Worksheet 2-1 to help guide you through the information about completing the 2019 Esti-mated Tax Worksheet. You also can find a copy of the worksheet in the instructions for Form 1040-ES.

Expected AGI—Line 1

Your expected AGI for 2019 (line 1) is your ex-pected total income minus your expected ad-justments to income.

Total income. Include in your total income all the income you expect to receive during the year, even income that is subject to withholding. However, don’t include income that is tax ex-empt.

Total income includes all income and loss for 2019 that, if you had received it in 2018, would have been included on your 2018 tax re-turn in the total on line 6 of Form 1040.

Social security and railroad retire-ment benefits . If you expect to receive social security or tier 1 railroad retire-

ment benefits during 2019, use Worksheet 2-2 to figure the amount of expected taxable bene-fits you should include on line 1.

Adjustments to income. Be sure to subtract from your expected total income all of the ad-justments you expect to take on your 2019 tax return.

Self-employed. If you expect to have income from self-employment, use Worksheet 2-3 to figure your expected self-employment tax and your allowable deduc-tion for self-employment tax. Include the amount from Worksheet 2-3 in your expected adjustments to income. 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.

Expected Taxable Income— Line 2

Reduce your expected AGI for 2019 (line 1) by either your expected itemized deductions or your standard deduction.

Itemized deductions—line 2a. If you expect to claim itemized deductions on your 2019 tax return, enter the estimated amount on line 2a.

Itemized deductions are the deductions that can be claimed on Schedule A (Form 1040).

Standard deduction—line 2a. If you expect to claim the standard deduction on your 2019 tax return, enter the amount on line 2a. Use Worksheet 2-4 to figure your standard deduc-tion.

No standard deduction. The standard de-duction for some individuals is zero. 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 ac-counting period.

Expected Taxes and Credits— Lines 4–11c

After you have figured your expected taxable in-come (line 3), follow the steps next to figure your expected taxes, credits, and total tax for 2019. Most people will have entries for only a few of these steps. However, you should check every step to be sure you don’t overlook any-thing.

Step 1. Figure your expected income tax (line 4). Generally, you will use the 2019 Tax Rate Schedules to figure your expected income tax.

However, see below for situations where you must use a different method to figure your estimated tax.

Tax on child's investment income. You must use a special method to figure tax on the income of the following children who have more than $2,200 of investment income.

1. Children under age 18 at the end of 2019.

2. The following children if their earned in-come isn’t more than half their support.

a. Children age 18 at the end of 2019.

b. Children who are full-time students at least age 19 but under age 24 at the end of 2019.

See Pub. 929, Tax Rules for Children and De-pendents. Although the ages and dollar amounts in the publication may be different in the 2018 revision, this reference will give you basic information for figuring the tax.

Tax on net capital gain. The regular in-come tax rates for individuals don’t apply to a

Chapter 2Estimated Tax for 2019Page 23

net capital gain. Instead, your net capital gain is taxed at a lower maximum rate.

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.

Tax on capital gain and qualified dividends. If the amount on line 1 in-cludes a net capital gain or qualified

dividends, use Worksheet 2-5 to figure your tax.

Note. The tax rate on your capital gains and dividends will depend on your income.

Tax if excluding foreign earned in-come or excluding or deducting for-eign housing. 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 2-6 to figure your estimated tax.

Step 2. Total your expected taxes (line 6). In-clude on line 6 the sum of the following.

1. Your tax on line 6.

2. Your expected alternative minimum tax (AMT) from Form 6251.

3. Your expected additional taxes from Form 8814, Parents' Election To Report Child's Interest and Dividends, and Form 4972, Tax on Lump-Sum Distributions.

4. Any recapture of education credits.

Step 3. Subtract your expected credits (line 7). If you are using your 2018 return as a guide and filed Form 1040, your total credits for 2018 were shown on line 12.

If your credits on line 7 are more than your taxes on line 6, enter “-0-” on line 8 and go to Step 4.

Step 4. Add your expected self-employment tax (line 9). You already should have figured your self-employment tax (see Self-employed under Expected AGI—Line 1, earlier).

Step 5. Add your expected other taxes (line 10).

Other taxes include the following. The total of these taxes are entered on line 10.

1. Additional tax on early distributions from:

a. An IRA or other qualified retirement plan,

b. A tax-sheltered annuity, or

c. A modified endowment contract en-tered into after June 20, 1988.

2. Household employment taxes if:

d. You will have federal income tax with-held from wages, pensions, annuities, gambling winnings, or other income; or

e. You would be required to make esti-mated tax payments even if you didn’t include household employment taxes when figuring your estimated tax.

3. Amounts written on Form 1040 on the line for “other taxes” (Schedule 4 (Form 1040), line 62). But don’t include recapture of a

federal mortgage subsidy; tax on excess golden parachute payments; look-back in-terest due under section 167(g) or 460(b) of the Internal Revenue Code; excise tax on insider stock compensation from an ex-patriated corporation; or uncollected social security and Medicare tax or RRTA tax on tips or group-term life insurance.

4. Repayment of the first-time homebuyer credit. See Form 5405.

5. Additional Medicare Tax. A 0.9% Addi-tional Medicare Tax applies to your com-bined Medicare wages and self-employ-ment income and/or your RRTA compensation that exceeds the amount listed in the following chart, based on your filing status.

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. A self-em-ployment loss should not be considered for purposes of this tax. RRTA compensa-tion should be separately compared to the threshold. Your employer is responsible for withholding the 0.9% Additional Medi-care Tax on Medicare wages or RRTA compensation it pays to you in excess of $200,000 in 2019. You should consider this withholding, if applicable, in determin-ing whether you need to make an estima-ted payment.

6. Net Investment Income Tax (NIIT). The NIIT is 3.8% of the lesser of your net in-vestment income or the excess of your MAGI over the amount listed in the follow-ing chart, based on your filing status.

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

Step 6. Subtract your refundable credits (line 11c). These include the earned income credit, additional child tax credit, fuel tax credit, net premium tax credit, refundable American opportunity credit, and refundable amount from Form 8885.

To figure your expected fuel tax credit, don’t include fuel tax for the first 3 quarters of the year that you expect to have refunded to you.

The result of Steps 1 through 6 is your total estimated tax for 2019 (line 11c).

Required Annual Payment— Line 12c

On lines 12a through 12c, figure the total amount you must pay for 2019, through with-holding and estimated tax payments, to avoid paying a penalty.

General rule. The total amount you must pay is the smaller of:

1. 90% of your total expected tax for 2019, or

2. 100% of the total tax shown on your 2018 return. Your 2018 tax return must cover all 12 months.

Special rules. There are special rules for higher income taxpayers and for farmers and fishermen.

Higher income taxpayers. If your AGI for 2018 was more than $150,000 ($75,000 if your filing status for 2019 is married filing sepa-rately), substitute 110% for 100% in (2) above. This rule does not apply to farmers and fisher-men.

For 2018, AGI is the amount shown on Form 1040, line 7.

Example. Jeremy Martin's total tax on his 2018 return was $42,581, and his expected tax for 2019 is $71,253. His 2018 AGI was $180,000. Because Jeremy had more than $150,000 of AGI in 2018, he figures his required annual payment as follows. He determines that 90% of his expected tax for 2019 is $64,128 (90% (0.90) × $71,253). Next, he determines that 110% of the tax shown on his 2018 return is $46,839 (110% (1.10) x $42,581). Finally, he determines that his required annual payment is $46,839, the smaller of the two.

Farmers and fishermen. If at least two-thirds of your gross income for 2018 or 2019 is from farming or fishing, your required annual payment is the smaller of:

1. 662/3% (0.6667) of your total tax for 2019, or

2. 100% of the total tax shown on your 2018 return. (Your 2018 tax return must cover all 12 months.)

For definitions of “gross income from farm-ing” and “gross income from fishing,” see Farm-ers and Fishermen, earlier, under Special Rules.

Total tax for 2018—line 12b. Your 2018 total tax is the amount on line 15 reduced by the fol-lowing.

1. Unreported social security and Medicare tax or RRTA tax from Forms 4137 or 8919 Schedule 4 (Form 1040), line 58.

2. The following amounts from Form 5329 in-cluded on Schedule 4 (Form 1040),

line 59.

a. Any tax on excess contributions to an IRA, Archer MSA, Coverdell educa-tion savings account, health savings account, and ABLE account.

b. Any tax on excess accumulations in qualified retirement plans.

Page 24Chapter 2Estimated Tax for 2019

3. The following write-ins on Schedule 4 (Form 1040), line 62.

a. Excise tax on excess golden para-chute payments (identified as “EPP”).

b. Excise tax on insider stock compen-sation from an expatriated corporation (identified as “ISC”).

c. Look-back interest due under section 167(g) (identified as “From Form 8866”).

d. Look-back interest due under section 460(b) (identified as “From Form 8697”).

e. Recapture of federal mortgage sub-sidy (identified as “FMSR”).

f. Uncollected social security and Medi-care tax or RRTA tax on tips or group-term life insurance (identified as “UT”).

4. Any shared responsibility payment on Schedule 4 (Form 1040), line 61.

5. Any refundable credit amounts on Form 1040, line 17a, b, or c, and Schedule 5 (Form 1040), line 70 and 73, and credit from Form 8885 included on line 74.

Total Estimated Tax Payments Needed—Line 14a

Use lines 13 and 14a to figure the total estima-ted tax you may be required to pay for 2019. Subtract your expected withholding from your required annual payment (line 12c). You usually must pay this difference in four equal install-ments. See When To Pay Estimated Tax and How To Figure Each Payment, later.

You don’t have to pay estimated tax if:

Line 12c minus line 13 is zero or less, or

Line 11c minus line 13 is less than $1,000.

Withholding—line 13. Your expected with-holding for 2019 (line 13) includes the income tax you expect to be withheld from all sources (wages, pensions and annuities, etc.). It in-cludes excess social security and tier 1 railroad retirement tax you expect to be withheld from your wages and compensation. For this pur-pose, you will have excess social security or tier 1 railroad retirement tax withholding for 2019 only if your wages and compensation from two or more employers are more than $132,900.

It also includes Additional Medicare Tax you expect to be withheld from your wages or com-pensation. Your employer is responsible for withholding the 0.9% Additional Medicare Tax on Medicare wages or RRTA compensation it pays to you in excess of $200,000.

When To Pay Estimated Tax

For estimated tax purposes, the year is divided into four payment periods. Each period has a specific payment due date. If you don’t pay enough tax by the due date of each of the pay-ment periods, you may be charged a penalty

even if you are due a refund when you file your income tax return.

If a payment is mailed, the date of the U.S. postmark is considered the date of payment. The general payment periods and due dates for estimated tax payments are shown next. For exceptions to the dates listed, see Saturday, Sunday, holiday rule.

For the period:Due date:

Jan. 1¹ – March 31 . . . . . . . . April 15 April 1 – May 31 . . . . . . . . . . June 17 June 1 – Aug. 31 . . . . . . . . . Sept. 16

Sept. 1 – Dec. 31 . . . . . . . . . Jan. 15, next year²

If your tax year does not begin on January 1, see Fiscal year taxpayers below.

2 See January payment below.

Saturday, Sunday, holiday rule. If the due date for an estimated tax payment falls on a Saturday, Sunday, or legal holiday, the pay-ment will be on time if you make it on the next day that isn’t a Saturday, Sunday, or a holiday. See Pub. 509 for a list of all legal holidays.

January payment. If you file your 2019 Form 1040 by January 31, 2020, and pay the rest of the tax you owe, you don’t need to make the payment due on January 15, 2020.

Example. Janet Adams does not pay any estimated tax for 2019. She files her 2019 in-come tax return and pays the balance due shown on her return on January 26, 2020.

Janet's estimated tax for the fourth payment period is considered to have been paid on time. However, she may owe a penalty for not mak-ing the first three estimated tax payments, if re-quired. Any penalty for not making those pay-ments will be figured up to January 26, 2020.

Fiscal year taxpayers. If your tax year does not start on January 1, your payment due dates are:

1. The 15th day of the 4th month of your fis-cal year,

2. The 15th day of the 6th month of your fis-cal year,

3. The 15th day of the 9th month of your fis-cal year, and

4. The 15th day of the 1st month after the end of your fiscal year.

You don’t have to make the last payment lis-ted 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.

When To Start

You don’t have to make estimated tax pay-ments until you have income on which you will owe income tax. 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.

You have several options when paying esti-mated taxes. 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.

If you choose to pay in installments, make your first payment by the due date for the first payment period. Make your remaining install-ment payments by the due dates for the later periods.

To avoid any estimated tax penalties, all in-stallments must be paid by their due date and for the required amount.

No income subject to estimated tax during first period. If you don’t have income subject to estimated tax until a later payment period, you must make your first payment by the due date for that period. You can pay your entire es-timated 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 remain-ing periods. Table 2-1 shows the general due dates for making installment payments when the due date does not fall on a Saturday, Sun-day, or holiday.

Table 2-1. General Due Dates for
Estimated Tax
Installment Payments
If you first have	Make a	Make later
income on which
you must pay	payment	installments
estimated tax:	by:*	by:*
Before April 1	April 15	June 15
		Sept. 15
		Jan. 15 next year
April 1–May 31	June 15	Sept. 15
		Jan. 15 next year
June 1–Aug. 31	Sept. 15	Jan. 15 next year
After Aug. 31	Jan. 15	(None)
	next year

*See January payment and Saturday, Sunday, holiday rule, earlier.

How much to pay to avoid penalty. To de-termine how much you should pay by each pay-ment due date, see How To Figure Each Pay-ment, later.

Farmers and Fishermen

If at least two-thirds of your gross income for 2018 or 2019 is from farming or fishing, you have only one payment due date for your 2019 estimated tax, January 15, 2020. The due dates for the first three payment periods, discussed under When To Pay Estimated Tax, earlier, don’t apply to you.

If you file your 2019 Form 1040 by March 2, 2020, and pay all the tax you owe at that time, you don’t need to make an estimated tax pay-ment.

Chapter 2Estimated Tax for 2019Page 25

Fiscal year farmers and fishermen. 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.

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. You should pay enough by each due date to avoid a penalty for that period. If you don’t 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. The penalty is discussed in chap-ter 4.

Regular Installment Method

If your first estimated tax payment is due April 15, 2019, you can figure your required payment

for each period by dividing your annual estima-ted tax due (line 14a of the 2019 Estimated Tax Worksheet (Worksheet 2-1)) by 4. Enter this amount on line 15. However, use this method only if your income is basically the same throughout the year.

Change in estimated tax. After you make an estimated tax payment, changes in your in-come, adjustments, deductions, or credits may make it necessary for you to refigure your esti-mated tax. 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.

If you don’t receive your income evenly throughout the year, your required estimated tax payments may not be the same for each pe-riod. See Annualized Income Installment Method, later.

Amended estimated tax. If you refig-ure your estimated tax during the year, or if your first estimated tax payment is

due after April 15, 2019, figure your required payment for each remaining payment period us-ing Worksheet 2-10.

Example. Early in 2019, Mira Roberts fig-ures that her estimated tax due is $1,800. She makes estimated tax payments on April 15 and June 17 of $450 each ($1,800 ÷ 4).

On July 10, she sells investment property at a gain. Her refigured estimated tax is $4,100. Her required estimated tax payment for the third payment period is $2,175, as shown in her fil-led-in Worksheet 2-10.

If Mira's estimated tax does not change again, her required estimated tax payment for the fourth payment period will be $1,025.

Underpayment penalty. The penalty is fig-ured separately for each payment period. If you figure your payments using the regular install-ment method and later refigure your payments because of an increase in income, you may be charged a penalty for underpayment of estima-ted tax for the period(s) before you changed your payments. To see how you may be able to avoid or reduce this penalty, see Annualized In-come Installment Method (Schedule AI) in chapter 4.

Page 26Chapter 2Estimated Tax for 2019

Worksheet 2-10. Amended Estimated Tax Worksheet—Illustrated				Keep for Your Records

1.	Amended total estimated tax due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	..............		....._1.	$4,100
2.	Multiply line 1 by:
	50% (0.50) if next payment is due June 17, 2019
	75% (0.75) if next payment is due September 16,
	2019
	100% (1.00) if next payment is due January 15,	2.		3,075
	2020 ....................................................
3.	Estimated tax payments for all previous periods . . . . . . . . . . . . . . . . . . . . . . .	3.		900
4.	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	4.		$2,175
	payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
	Note. If the payment on line 4 is due January 15, 2020, stop here. Otherwise,

	go to line 5.
5.	Add lines 3 and 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	..............		....._5.	3,075
6.	Subtract line 5 from line 1 and enter the result (but not less than zero) . . . . . . . . . . .	. . .	...........	....._6.	1,025
7.	Each following required payment: If the payment on line 4 is due June 17, 2019, enter one-half of the
	amount on line 6 here and on the payment vouchers for your payments due September 16, 2019, and January
	15, 2020. If the amount on line 4 is due September 16, 2019, enter the amount from line 6 here and on the				$1,025
	payment voucher for your payment due January 15, 2020 . . . . . . . . . . . . . . . . . . . .	. . .	...........	.....7.


Worksheet 2-10. Amended Estimated Tax Worksheet—Blank				Keep for Your Records

1.	Amended total estimated tax due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	..............		....._1.
2.	Multiply line 1 by:
	50% (0.50) if next payment is due June 17, 2019
	75% (0.75) if next payment is due September 16,
	2019
	100% (1.00) if next payment is due January 15,	2.
	2020 ....................................................
3.	Estimated tax payments for all previous periods . . . . . . . . . . . . . . . . . . . . . . .	3.
4.	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	4.
	payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
	Note. If the payment on line 4 is due January 15, 2020, stop here. Otherwise,

	go to line 5.
5.	Add lines 3 and 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	..............		....._5.
6.	Subtract line 5 from line 1 and enter the result (but not less than zero) . . . . . . . . .		.	....._6.
	. .	. . .	..........
7.	Each following required payment: If the payment on line 4 is due June 17, 2019, enter one-half of the
	amount on line 6 here and on the payment vouchers for your payments due September 16, 2019, and January
	15, 2020. If the amount on line 4 is due September 16, 2019, enter the amount from line 6 here and on the
	payment voucher for your payment due January 15, 2020 . . . . . . . . . . . . . . . . . . . .	. . .	...........	.....7.

Chapter 2Estimated Tax for 2019Page 27

Annualized Income

Installment Method

If you don’t receive your income evenly through-out 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 fig-ured using the regular installment method.

The annualized income installment method annualizes your tax at the end of each period based on a reasonable estimate of your in-come, deductions, and other items relating to events that occurred from the beginning of the tax year through the end of the period. To see whether you can pay less for any period, com-plete the 2019 Annualized Estimated Tax Work-sheet (Worksheet 2-7).

You first must complete the 2019 Esti-

mated Tax Worksheet (Worksheet 2-1) CAUTION through line 14b.

Use the result you figure on line 32 of Work-sheet 2-7 to make your estimated tax payments and complete your payment vouchers.

Note. If you use the annualized income in-stallment method to figure your estimated tax payments, you must file Form 2210 with your 2019 tax return. See Annualized Income Install-ment Method (Schedule AI) in chapter 4 for more information.

nualized Estimated Tax Worksheet (Worksheet 2-7)).

Line 7. If you won’t itemize your deductions, use Worksheet 2-4 to figure your standard de-duction.

Line 12. Generally, you will use the Tax Rate Schedules to figure the tax on your annualized income. However, see below for situations where you must use a different method to figure your estimated tax.

Tax on child's investment income. You must use a special method to figure tax on the income of the following children who have more than $2,100 of investment income.

1. Children under age 18 at the end of 2019.

2. The following children if their earned in-come isn’t more than half their support.

a. Children age 18 at the end of 2019.

b. Children who are full-time students at least age 19 but under age 24 at the end of 2019.

See Pub. 929.

Tax on net capital gain. The regular in-come tax rates for individuals don’t apply to a net capital gain. Instead, your net capital gain is taxed at a lower maximum rate.

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.

Line 15. Include all the nonrefundable credits you expect to claim because of events that will occur during the period.

Note. When figuring your credits for each period, annualize any item of income or deduc-tion to figure each credit. For example, if you need to use your AGI to figure a credit, use line 3 of Worksheet 2-7 to figure the credit for each column.

Line 18. Add your expected other taxes.

Other taxes include the following.

1. Additional tax on early distributions from:

a. An IRA or other qualified retirement

plan,

b. A tax-sheltered annuity, or

c. A modified endowment contract en-

tered into after June 20, 1988.

2. Household employment taxes if:

a. You will have federal income tax with-

held from wages, pensions, annuities,

gambling winnings, or other income;

or

b. You would be required to make esti-

mated tax payments even if you didn’t

include household employment taxes

when figuring your estimated tax.

3. Amounts on Form 1040 written on the line

for “other taxes” (Schedule 4 (Form 1040),

line 62). But don’t include recapture of a

federal mortgage subsidy; tax on excess

Instructions for the 2019 Annualized Estimated Tax Worksheet (Worksheet 2-7)

Use Worksheet 2-7 to help you follow TIP these instructions.

The purpose of this worksheet is to determine your estimated tax liability as your income accu-mulates throughout the year, rather than divid-ing your entire year's estimated tax liability by four as if your income was earned equally throughout the year. The top of the worksheet shows the dates for each payment period. The periods build; that is, each period includes all previous periods. After the end of each pay-ment period, complete the corresponding work-sheet column to figure the payment due for that period.

Line 1. Enter your AGI for the period. 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. See Expected AGI—Line 1, earlier.

Self-employment income. If you had self-employment income, first complete Sec-tion B of this worksheet. Use the amounts on line 41 when figuring your expected AGI to en-ter in each column of Section A, line 1.

Line 4. Be sure to consider deduction limits fig-ured on Schedule A (Form 1040), such as re-ducing your medical expenses by 10% or the $10,000 limit on state and local taxes. Figure your deduction limits using your expected AGI in the corresponding column of line 1 (2019 An-

Tax on qualified dividends and capital gains. For 2019, your capital gain and divi-dends rate will depend on your income.

Tax on capital gain or qualified divi-dends. If the amount on line 1 includes a net capital gain or qualified divi-

dends, use Worksheet 2-8 to figure the amount to enter on line 10.

Tax if excluding foreign earned in-come or excluding or deducting for-eign housing. 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 2-9 to figure the amount to enter on line 10.

Line 13. Add the tax from Forms 8814, 4972, and 6251 for the period. Also include any re-capture of an education credit for each period. You may owe this tax if you claimed an educa-tion credit in an earlier year and you received ei-ther tax-free educational assistance or a refund of qualifying expenses for the same student af-ter filing your 2018 return.

Use the 2018 forms or worksheets to see if you will owe any of the taxes just discussed. Figure the tax based on your income and de-ductions during the period shown in the column headings. Multiply this amount by the annuali-zation amounts shown for each column on line 2 of the 2019 Annualized Estimated Tax Worksheet (Worksheet 2-7). Enter the result on line 13 of this worksheet.

golden parachute payments; look-back in-terest due under section 167(g) or 460(b) of the Internal Revenue Code; excise tax on insider stock compensation from an ex-patriated corporation; and uncollected so-cial security, Medicare, or RRTA tax on tips or group-term life insurance.

4. Repayment of the first-time homebuyer

credit if the home will cease to be your

main home in 2019. See Form 5405 for

exceptions.

5.Additional Medicare Tax. A 0.9% Addi-tional Medicare Tax applies to your com-bined Medicare wages and self-employ-ment income and/or your RRTA compensation that exceeds the amount listed in the following chart, based on your filing status.

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. A self-em-ployment loss should not be considered for purposes of this tax. RRTA compensa-tion should be separately compared to the threshold.

Your employer is responsible for with-holding the 0.9% Additional Medicare Tax

Page 28Chapter 2Estimated Tax for 2019

on Medicare wages or RRTA compensa-tion it pays you in excess of $200,000 in 2019. You should consider this withhold-ing, if applicable, in determining whether you need to make an estimated payment.

6. Net Investment Income Tax (NIIT). The NIIT is 3.8% of the lesser of your net in-vestment income or the excess of your MAGI over a specified threshold amount. 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

Line 20. Include all the refundable credits (other than withholding credits) you can claim because of events that occurred during the pe-riod. These include the earned income credit, additional child tax credit, fuel tax credit, net premium tax credit, any refundable credit from Form 8885, and refundable American opportu-

3. On line 21, increase your entry by the amount determined by multiplying your in-come for the period that isn’t effectively connected with a U.S. trade or business by the following.

a. 72% (0.72) for column (b).

b. 45% (0.45) for column (c).

c. 30% (0.30) for column (d).

However, if you can use a treaty rate lower than 30%, use the percentages de-termined by multiplying your treaty rate by 2.4, 1.5, and 1, respectively.

4. On line 26, enter one-half of the amount from line 14c of the Form 1040-ES (NR) 2019 Estimated Tax Worksheet in column (b), and one-fourth in columns (c) and (d) of Worksheet 2-7.

5. On lines 24 and 27, skip column (b).

6. On line 31, if you don’t use the actual with-holding method, include one-half of your total expected withholding in column (b) and one-fourth in columns (c) and (d).

See Pub. 519 for more information.

amount credited as paid by you on January 15, 2020.

If you choose to have an overpayment of tax credited to your estimated tax, you can’t have any of that amount refunded to you until you file your tax return for the following year. You also can’t use that overpayment in any other way.

Example. When Kathleen finished filling out her 2018 tax return, she saw that she had overpaid her taxes by $750. Kathleen knew she would owe additional tax in 2019. She credited $600 of the overpayment to her 2019 estimated tax and had the remaining $150 refunded to her.

In September, she amended her 2018 return by filing Form 1040X, Amended U.S. Individual Income Tax Return. It turned out that she owed $250 more in tax than she had thought. This re-duced her 2018 overpayment from $750 to $500. Because the $750 had already been ap-plied to her 2019 estimated tax or refunded to her, the IRS billed her for the additional $250 she owed, plus penalties and interest. Kathleen could not use any of the $600 she had credited to her 2019 estimated tax to pay this bill.

nity credit.

Note. When figuring your refundable credits for each period, annualize any item of income or deduction used to figure each credit.

Line 29. If line 28 is smaller than line 25 and you are not certain of the estimate of your 2019 tax, you can avoid a penalty by entering the amount from line 25 on line 29.

Line 31. For each period, include estimated tax payments made and any excess social se-curity and railroad retirement tax.

Also include estimated federal income tax withholding. One-fourth of your estimated with-holding is considered withheld on the due date of each payment period. To figure the amount to include on line 31 for each period, multiply your total expected withholding for 2019 by:

25% (0.25) for the first period,

50% (0.50) for the second period,

75% (0.75) for the third period, and

100% (1.00) for the fourth period.

However, you may choose to include your withholding according to the actual dates on which the amounts will be withheld. For each period, include withholding made from the be-ginning of the period up to and including the payment due date. You can make this choice separately for the taxes withheld from your wa-ges and all other withholding. For an explana-tion of what to include in withholding, see Total Estimated Tax Payments Needed—Line 14a, earlier.

Nonresident aliens. If you will file Form 1040NR and you don’t receive wages as an employee subject to U.S. income tax withhold-ing, the instructions for the worksheet are modi-fied as follows.

1. Skip column (a).

2. On line 1, enter your income for the period that is effectively connected with a U.S. trade or business.

Estimated Tax Payments Not Required

You don’t have to pay estimated tax if your with-holding in each payment period is at least as much as:

One-fourth of your required annual pay-ment, or

Your required annualized income install-ment for that period.

You also don’t 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.

How To Pay

Estimated Tax

There are several ways to pay estimated tax.

Credit an overpayment on your 2018 return to your 2019 estimated tax.

Pay by direct transfer from your bank ac-count, or pay by debit or credit card using a pay-by-phone system or the Internet.

Send in your payment (check or money or-der) with a payment voucher from Form 1040-ES.

Credit an Overpayment

If you show an overpayment of tax after com-pleting your Form 1040 for 2018, you can apply part or all of it to your estimated tax for 2019. On Form 1040, enter the amount you want credited to your estimated tax rather than refun-ded. Take the amount you have credited into account when figuring your estimated tax pay-ments. If you timely file your 2018 return, treat the credit as a payment made on April 15, 2019.

If you are a beneficiary of an estate or trust, and the trustee elects to credit 2019 trust pay-ments of estimated tax to you, you can treat the

Pay Online

IRS offers an electronic payment option that is right for you. Paying online is convenient and secure and helps make sure we get your pay-ments on time. To pay your taxes online or for more information, go to IRS.gov/Payments. You can pay using any of the following methods.

IRS Direct Pay. For online transfers di-rectly from your checking or savings ac-count at no cost to you, go to IRS.gov/ Payments.

Pay by Card. To pay by debit or credit card, go to IRS.gov/Payments. There is a convenience fee charged by these service providers.

Electronic Funds Withdrawal (EFW) is an integrated e-file/e-pay option offered when filing your federal taxes electronically using tax preparation software, through a tax professional, or the IRS at IRS.gov/ Payments.

Online Payment Agreement. If you can’t pay in full by the due date of your tax re-turn, you can apply for an online monthly installment agreement at IRS.gov/OPA. Once you complete the online process, you will receive immediate notification of whether your agreement has been ap-proved. A user fee is charged.

IRS2Go is the mobile application of the IRS; you can access Direct Pay or Pay by Card by downloading the application.

Pay by Phone

Paying by phone is another safe and secure method of paying electronically. Use one of the following methods: (1) call one of the debit or credit card service providers, or (2) use the Electronic Federal Tax Payment System (EFTPS).

Debit or credit card. Call one of our service providers. Each charges a fee that varies by provider, card type, and payment amount.

Chapter 2Estimated Tax for 2019Page 29

WorldPay US, Inc.

1-844-PAY-TAX-8TM (1-844-729-8298)

www.payUSAtax.com

Official Payments Corporation

1-888-UPAY-TAXTM (1-888-872-9829)

www.officialpayments.com

Link2GOV Corporation

1-888-PAY-1040TM (1-888-729-1040)

www.PAY1040.com

EFTPS. To use EFTPS, you must be enrolled either online or have an enrollment form mailed to you. To make a payment using EFTPS, call 800-555-4477 (English) or 800-244-4829 (Es-pañol). People who are deaf, hard of hearing, or have a speech disability and who have access to TTY/TDD equipment can call 800-733-4829. For more information about EFTPS, go to IRS.gov/Payments or EFTPS.gov.

Pay by Mobile Device

To pay through your mobile device, download the IRS2Go application.

Pay by Cash

Cash is an in-person payment option for individ-uals provided through retail partners with a

maximum of $1,000 per day per transaction. To make a cash payment, you must first be regis-tered online at www.officialpayments.com/fed, our Official Payment provider.

Pay by Check or Money Order Using the Estimated Tax Payment Voucher

Before submitting a payment through the mail, please consider alternative methods. One of our safe, quick, and easy electronic payment options might be right for you. Each payment of estimated tax by check or money order must be accompanied by a payment voucher from Form 1040-ES. 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.

Don’t use the address shown in the

Form 1040 instructions.

CAUTION

If you didn’t pay estimated tax last year, get a copy of Form 1040-ES from the IRS (see How To Get Tax Help, later). Follow the instructions to make sure you use the vouchers correctly.

No checks of $100 million or more accep-ted. The IRS can’t accept a single check (in-

cluding a cashier's check) for amounts of $100,000,000 ($100 million) or more. If you are sending $100 million or more by check, you'll need to spread the payment over two or more checks with each check made out for an amount less than $100 million. This limit doesn't apply to other methods of payment (such as electronic payments). Please consider a method of payment other than check if the amount of the payment is over $100 million.

Joint estimated tax payments. 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.

Change of address. You must notify the IRS if you are making estimated tax payments and you changed your address during the year. Complete Form 8822, Change of Address, and mail it to the address shown in the instructions for that form.

Page 30Chapter 2Estimated Tax for 2019

Worksheets for Chapter 2

Use the following worksheets and tables to figure your correct estimated tax.

IF you need...		THEN use...
2019 Tax Rate Schedules		2019 Tax Rate Schedules

the 2019 Estimated Tax Worksheet		Worksheet 2-1

to estimate your taxable social security and railroad retirement benefits—line 1 of ES Worksheet (or		Worksheet 2-2
Annualized ES Worksheet (Worksheet 2-7))

to estimate your self-employment (SE) tax and your deduction for SE tax—lines 1 and 11 of ES Worksheet		Worksheet 2-3
(lines 1 and 17 of Annualized ES Worksheet (Worksheet 2-7))

to estimate your standard deduction—line 2 of ES Worksheet (line 7 of Annualized ES Worksheet		Worksheet 2-4
(Worksheet 2-7))

to estimate your income tax if line 1 of your ES Worksheet includes a net capital gain or qualified		Worksheet 2-5
dividends—line 4 of ES Worksheet

to estimate your income tax if you expect to claim a foreign earned income exclusion or foreign housing		Worksheet 2-6
exclusion or deduction on Form 2555 or Form 2555-EZ—line 4 of ES Worksheet

the 2019 Annualized Estimated Tax Worksheet (Annualized ES Worksheet)		Worksheet 2-7

to estimate your income tax if line 1 of your Annualized ES Worksheet includes a net capital gain or		Worksheet 2-8
qualified dividends—line 10 of Annualized ES Worksheet

to estimate your income tax if you expect to claim a foreign earned income exclusion or foreign housing		Worksheet 2-9
exclusion or deduction on Form 2555 or Form 2555-EZ—line 10 of Annualized ES Worksheet

to refigure (amend) your estimated tax during the year		Worksheet 2-10

Chapter 2Estimated Tax for 2019Page 31

				2019 Tax Rate Schedules
!	Don’t use these Tax Rate Schedules to figure your 2018 taxes. Use them only to figure your 2019 estimated
CAUTION

taxes.

Schedule X—Use if your 2019 filing status is						Schedule Z— Use if your 2019 filing status is
Single						Head of household
If line 3 is:				The tax is:	of the	If line 3 is:			The tax is:	of the
	But not						But not
Over—					amount	Over—				amount
	over—				over—		over—			over—
$0	$9,700	$970.00 +		10%	$0	$0	$13,850		10%	$0
9,700	39,475			12%	9,700	13,850	52,850	$1,385.00 + 12%		13,850
39,475	84,200	4,543.00	+	22%	39,475	52,850	84,200	6,065.00	+ 22%	52,850
84,200	160,725	14,382.50	+	24%	84,200	84,200	160,700	12,962.00	+ 24%	84,200
160,725	204,100	32,748.50	+	32%	160,725	160,700	204,100	31,322.00	+ 32%	160,700
204,100	510,300	46,628.50	+	35%	204,100	204,100	510,300	45,210.00	+ 35%	204,100
510,300	------	153,798.50	+	37%	510,300	510,300	------	152,380.00	+ 37%	510,300
Schedule Y-1— Use if your 2019 filing status is						Schedule Y-2— Use if your 2019 filing status is
Married filing jointly or Qualifying widow(er)						Married filing separately
If line 3 is:				The tax is:	of the	If line 3 is:			The tax is:	of the
	But not						But not
Over—					amount	Over—				amount
	over—				over—		over—			over—
$0	$19,400			10%	$0	$0	$9,700		10%	$0
19,400	78,950	$1,940.00 + 12%			19,400	9,700	39,475	$970.00 + 12%		9,700
78,950	168,400	9,086.00	+	22%	78,950	39,475	84,200	4,543.00	+ 22%	39,475
168,400	321,450	28,765.00	+ 24%		168,400	84,200	160,725	14,382.50	+ 24%	84,200
321,450	408,200	65,497.00	+ 32%		321,450	160,725	204,100	32,748.50	+ 32%	160,725
408,200	612,350	93,257.00	+ 35%		408,200	204,100	306,175	46,628.50	+ 35%	204,100
612,350	------	164,709.50	+ 37%		612,350	306,175	------	82,354.75	+ 37%	306,175

Page 32Chapter 2Estimated Tax for 2019

Worksheet 2-1. 2019 Estimated Tax WorksheetKeep for Your Records

!

CAUTIONWhen this worksheet refers you to instructions, you can find those instructions in the 2019 Form 1040-ES.

1. Adjusted gross income you expect in 2019 (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2a. Deductions

•If you plan to itemize deductions, enter the estimated total of your itemized deductions. These include qualifying home mortgage interest, charitable contributions, state and local taxes (up to $10,000), and medical expenses in excess of 10% of your income.

• If you don’t plan to itemize deductions, enter your standard deduction . . . . . . . . . . . . .. . . . . . . . . . . . .

b. If you can take the qualified business income deduction, enter the estimated amount of the deduction . . . . .

c. Add lines 2a and 2b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

4. Tax. Figure your tax on the amount on line 3 by using the 2019 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 2-5 and 2-6 to figure the tax . . . . . . . . . . . . . . . . . . . . . . . . . .

5. Alternative minimum tax from Form 6251 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6. Add lines 4 and 5. Add to this amount any other taxes you expect to include in the total on Form 1040,

line 12a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7. Credits (see instructions). Don’t include any income tax withholding on this line . . . . . . . . . . . . . . . . . . . . .

8. Subtract line 7 from line 6. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9. Self-employment tax (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10. Other taxes including, if applicable, Additional Medicare Tax and/or NIIT (see instructions) . . . . . . . . . . . . .

11a. Add lines 8 through 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

b. Earned income credit, additional child tax credit, fuel tax credit, net premium tax credit, refundable American
	opportunity credit, and refundable credit from Form 8885 . . . . . . . . . . . . . .	.....	..............	.	_▶...
c. Total 2019 estimated tax. Subtract line 11b from line 11a. If zero or less, enter -0- . . . . . . . . . . . .
12a.	Multiply line 11c by 90% (0.90) (662/3% (0.6667) for farmers and	12a.
	fishermen) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
b. Required annual payment based on prior year's tax (see		12b.
	instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
c. Required annual payment to avoid a penalty. Enter the smaller of line 12a or 12b . . . . . . . . . .					▶
	Caution: Generally, if you don’t prepay (through income tax withholding and estimated tax payments) at least
	the amount on line 12c, you may owe a penalty for not paying enough estimated tax. To avoid a penalty,
	make sure your estimate on line 11c is as accurate as possible. Even if you pay the required annual payment,
	you may still owe tax when you file your return. If you prefer, you can pay the amount shown on line 11c.
13.	Income tax withheld and estimated to be withheld during 2019 (including income tax withholding on
	pensions, annuities, certain deferred income, etc.) . . . . . . . . . . . . . . . . . . .	.....	..............	.	. . .
14a.	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Subtractline13fromline12c	14a.
	Is the result zero or less?
	Yes. Stop here. You are not required to make estimated tax payments.
	No. Go to line 14b.	14b.
b. Subtract line 13 from line 11c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
	Is the result less than $1,000?
	Yes. Stop here. You are not required to make estimated tax payments.
	No. Go to line 15 to figure your required payment.

15. If the first payment you are required to make is due April 15, 2019, enter ¼ of line 14a (minus any 2018 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.

2a.

2b.

2c.

3.

4.

5.

6.

7.

8.

9.

10.

11a.

11b.

11c.

12c.

13.

15.

Chapter 2Estimated Tax for 2019Page 33

Worksheet 2-2. 2019 Estimated Tax Worksheet—Line 1
Estimated Taxable Social Security and Railroad Retirement	Keep for Your Records
Benefits

Note. If you are using this worksheet to estimate your taxable social security or railroad retirement benefits for Worksheet 2-7, 2019 Annualized Estimated Tax Worksheet, multiply the expected amount of benefits for each period by the annualization amount shown on Worksheet 2-7, line 2, for the same period before entering it on line 1 below.

1.	Enter your expected social security and railroad retirement benefits . . . . . . . . . . . . . . . .		1.
2.	Enter one-half of line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		2.
3.	Enter your expected total income. Don’t include any social security and railroad
	retirement benefits, nontaxable interest income, nontaxable IRA distributions, or		3.
	nontaxable pension distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.	Enter your expected nontaxable interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		4.
5.	Enter (as a positive amount) the total of any expected exclusions or deductions for:
	•	U.S. 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	5.
	•	Rico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.	Add lines 2, 3, 4, and 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		6.
7.	Enter your expected adjustments to income. Don’t include any student loan		7.
	interest deduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.	Subtract line 7 from line 6. If zero or less, stop here.
	Note. Don’t include any social security or railroad retirement benefits in the amount on
	line 1 of your 2019 Estimated Tax Worksheet (Worksheet 2-1) (or Annualized Estimated		8.
	Tax Worksheet (Worksheet 2-7)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.	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		9.
	year) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.	Subtract line 9 from line 8. If zero or less, stop here.
	Note. Don’t 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		10.
	2-7)) .................................................................
11.	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		11.
	year) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12.	Subtract line 11 from line 10. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . .		12.
13.	Enter the smaller of line 10 or line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		13.
14.	Enter one-half of line 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		14.
15.	Enter the smaller of line 2 or line 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		15.
16.	Multiply line 12 by 85% (0.85). If line 12 is zero, enter -0- . . . . . . . . . . . . . . . . . . . . . . . .		16.
17.	Add lines 15 and 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		17.
18.	Multiply line 1 by 85% (0.85) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		18.
19.	Enter the smaller of line 17 or line 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		19.
20.	Expected taxable social security and railroad retirement benefits for the period.
	Divide line 19 by the annualization amount shown on worWorksheet 2-7, line 2, for the
	same period and enter here. Include this amount in the total on line 1 of your 2019
	Estimated Tax Worksheet (Worksheet 2-1) (or Annualized Estimated Tax Worksheet		20.
	(Worksheet 2-7)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page 34Chapter 2Estimated Tax for 2019

Worksheet 2-3. 2019 Estimated Tax Worksheet—Lines 1 and 9		Keep for Your Records
Estimated Self-Employment Tax and Deduction Worksheet
1 a. Enter your expected income and profits subject to self-employment	1a.		.
tax* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

b. If you will have farm income and also receive social security retirement or disability benefits, enter your expected Conservation Reserve Program payments that will be included on Schedule F (Form 1040) or listed on

	Schedule K-1 (Form 1065) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1b.
2.	Subtract line 1b from line 1a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2.
3.	Multiply line 2 by 92.35% (0.9235). If less than $400, don’t complete this
	worksheet; you won’t owe self-employment tax on your expected net	3.
	earnings from self-employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.	Multiply line 3 by 2.9% (0.029) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	....................
5.	Maximum income subject to social security tax . . . . . . . . . . . . . . . . . . . .	5.	$132,900
6.	Enter your expected wages (if subject to social security tax or the	6.
	6.2% portion of tier 1 railroad retirement tax) . . . . . . . . . . . . . . . . . . . . . .
7.	Subtract line 6 from line 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7.
	Note. If line 7 is zero or less, enter -0- on line 9 and skip to line 10.
8.	Enter the smaller of line 3 or line 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8.
9.	. .Multiplyline8by12.4%(0.124)................................	....................
10.	Add line 4 and line 9. Enter the result here and on line 9 of your 2019 Estimated Tax Worksheet
	(Worksheet 2-1) (or line 15 of the Annualized Estimated Tax Worksheet (Worksheet 2-7)) . . . . . . . .
11.	Multiply line 10 by 50% (0.50). This is your expected deduction for
	self-employment tax on Schedule 1 (Form 1040), line 27. Subtract this
	amount when figuring your expected AGI on line 1 of your 2019
	Estimated Tax Worksheet (Worksheet 2-1) (or Annualized Estimated Tax	11.
	Worksheet (Worksheet 2-7)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.

9.

10.

*Net profit from self-employment is found on Schedule C, Schedule F, and Schedule K-1 (Form 1065).

Chapter 2Estimated Tax for 2019Page 35

Worksheet 2-4. 2019 Estimated Tax Worksheet—Line 2	Keep for Your Records
Standard Deduction Worksheet

Caution. Don’t complete this worksheet if you expect your spouse to itemize on a separate return or you expect to be a dual-status alien. In either case, your standard deduction will be zero.

1. Enter the amount shown below for your filing status.

Single or married filing separately—$12,200

Married filing jointly or Qualifying widow(er)—$24,400

• Head of household—$18,350 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ._1.

2. Can you (or your spouse if filing jointly) be claimed as a dependent on someone else's return?

No.Skip line 3; enter the amount from line 1 on line 4.

Yes. Go to line 3.

3. Is your earned income* more than $750?

Yes. Add $350 to your earned income. Enter the total.

No.Enter $1,100. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.

4.	Enter the smaller of line 1 or line 3 . .			....................	.......	...............................
5.	Were you (or your spouse if filing jointly) born before January 2, 1955, or blind?
	No.	Go to line 6.
	Yes.	Check if:
		a. You were	Born before January 2, 1955		Blind
		b. Your spouse was		Born before January 2, 1955		Blind

c. Total boxes checked in 5a and 5b

▶ Multiply $1,300 ($1,650 if single or head of household) by the number in the box on line 5c . . . . . . . .

6. Standard deduction. Add lines 4 and 5. Enter the result here and on line 2 of your 2019 Estimated Tax Worksheet (Worksheet 2-1) (or line 7 of your 2019 Annualized Estimated Tax Worksheet (Worksheet 2-7)) ....................................................................................

4.

5.

6.

Earned income includes wages, salaries, tips, professional fees, and other compensation received for personal services you performed. It also includes taxable scholarships and fellowship grants. Reduce your earned income by your allowed deduction for self-employment tax (Worksheet 2-3, line 11).

Page 36Chapter 2Estimated Tax for 2019

Worksheet 2-5. 2019 Estimated Tax Worksheet—Line 4

Qualified Dividends and Capital Gain Tax Worksheet

Keep for Your Records

1.	Enter the amount from the appropriate worksheet.
	•	Line 3 of your 2019 Estimated Tax Worksheet.
		Line 3 of Worksheet 2-6 (use if you will exclude or deduct foreign earned
	•	income or housing) . . . . . . . . . . . . . . . . . . . . . . .	....	...........
2.	Enter your qualified dividends expected for
	20191 ..................................		2.
3.	. . . . . .Enteryournetcapitalgainexpectedfor20191		3.
4.	. . . . . . . . . . . . . . . . . . . . . . . . . . . .Addlines2and3		..............
5.	Enter your 28% rate gain or loss expected for
	20192 ..................................		5.
6.	Enter your unrecaptured section 1250 gain expected for
	2019	..................................	6.
7.	. . . . . . . . . . . . . . . . . . . . . . . . . .Addlines5and6		7.
8.	. . . . . . . . . . . . . . .Enterthesmallerofline3orline7		..............
9.	Subtract line 8 from line 4 . . . . . . . . . . . . . . . . . . . . . .		..............
10.	Subtract line 9 from line 1. If zero or less, enter -0- . . . . .		..............
11.	Enter the smaller of line 1 or $78,750 ($39,375 if single
	or married filing separately, or $52,750 if head of
	household) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		11.
12.	. . . . . . . . . . .Enterthesmallerofline10orline11		12.
13.	a. Subtract line 4 from line 1. If zero or less,
	enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		13a.
	b. Enter the smaller of line 1 or:
	•	$160,725 if single or married filing separately;
		$160,700 if head of household; or
	•	$321,450 if married filing jointly or qualifying
	•	widow(er) . . . . . . . . . . . . . . . . . . . . . . . . . . . .	b.
	. . . . . . . . .c.Enterthesmallerofline10orline13b		c.

1.

4.

8.

9.

10.

14.	Enter the larger of line 13a or 13c . . . . . . . . . . . . . . . .		...............................
	Note. If line 11 and line 12 are the same, skip line 15 and go to line 16.
15.	Subtract line 12 from line 11. This is the amount taxed at 0% . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
	Note. If lines 1 and 11 are the same, skip lines 16 through 36 and go to line 37.
16.	Enter the smaller of line 1 or line 9 . . . . . . . . . . . . . . .		..............		16.
17.	Enter the amount from line 15. If line 15 is blank, enter -0-		..............		17.
18.	Subtract line 17 from line 16. If zero or less, enter -0- . . .		..............		18.
19.	Enter:
	•	$434,550 if single,
	•	$244,425 if married filing separately,
	•	$488,850 if married filing jointly or qualifying widow(er), or			19.
	•	$461,700 if head of household . . . . . . . . . . . . . . . .	. . .	...........
20.	Enter the smaller of line 1 or line 19 . . . . . . . . . . . . . . .		..............		20.
21.	Add lines 14 and 15 . . . . . . . . . . . . . . . . . . . . . . . .		21.
22.	Subtract line 21 from line 20. If zero or less,
	enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		22.
23.	. . . . . . . . . . . . . .Enterthesmallerofline18orline22		...............................

14.

15.

23.

24.	Multiply line 23 by 15% (0.15) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	..._24............................
25.	Add line 17 and line 23. If line 1 equals the sum of lines 21 and 23, skip lines 26
	through 36 and go to line 37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	25.
26.	. .Subtractline25fromline16...................................	..._26............

27.	Multiply line 26 by 20% (0.20) . . . . . . . . . . . . . . . . . . .	....................	...........................
28.	Enter the smaller of line 3 or line 6 . . . . . . . . . . . . . . .	...._28...........
29.	. .Addlines4and14.......................	29.
30.	. .Entertheamountfromline1above...........	30.
31.	. . .Subtractline30fromline29.Ifzeroorless,enter-0-	.............._31.
32.	. . .Subtractline31fromline28.Ifzeroorless,enter-0-	...._32............................
33.	Multiply line 32 by 25% (0.25) . . . . . . . . . . . . . . . . . . .	....................	...........................
	Note. If line 5 is zero or blank, skip lines 34 through 36 and go to line 37 .
34.	Add lines 14, 15, 23, 26, and 32 . . . . . . . . . . . . . . . . .	...._34............................
35.	Subtract line 34 from line 1 . . . . . . . . . . . . . . . . . . . . .	...._35............................

27.

33.

Chapter 2Estimated Tax for 2019Page 37

Worksheet 2-5. 2019 Estimated Tax Worksheet—Line 4		Keep for Your Records
Qualified Dividends and Capital Gain Tax Worksheet (Continued)
36.	Multiply line 35 by 28% (0.28) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	......._36.
37.	. .Figurethetaxontheamountonline14fromthe2019TaxRateSchedules.........................	......._37.
38.	. .Addlines24,27,33,36,and37......................................................	.......38.
39.	Figure the tax on the amount on line 1 from the 2019 Tax Rate Schedules	......._39.
	............................
40.	Tax on all taxable income (including capital gains and qualified dividends). Enter the smaller of line 38	.......40.
	or line 39 here and on line 4 of the 2019 Estimated Tax Worksheet (Worksheet 2-1) (or line 4 of Worksheet 2-6) .


1 If you expect to deduct investment interest expense, don’t include on this line any qualified dividends or net capital gain that you will elect to treat as
investment income.
2 This includes a section 1202 exclusion from eligible gain on qualified small business stock and gain or loss from the sale or exchange of collectibles. See the
Instructions for Schedule D (Form 1040) for more information.

Worksheet 2-6. 2019 Estimated Tax Worksheet—Line 4		Keep for Your Records
	Foreign Earned Income Tax Worksheet

Before you begin:If line 3 of your 2019 Estimated Tax Worksheet (Worksheet 2-1) is zero, don’t complete this worksheet.

1. Enter the amount from line 3 of your 2019 Estimated Tax Worksheet (Worksheet 2-1) . . . . . . . . . . . . . . . . .

1.

2. Enter the total foreign earned income and housing amount you (and your spouse if filing jointly) expect to

exclude or deduct in 2019 on Form 2555 or Form 2555-EZ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2.
3. Add lines 1 and 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3.

4. Tax on the amount on line 3. Use the 2019 Tax Rate Schedules or Worksheet 2-5,*

as appropriate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4.
5. Tax on the amount on line 2. Use the 2019 Tax Rate Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5.

6. Subtract line 5 from line 4. Enter the result here and on line 4 of your 2019 Estimated Tax Worksheet

(Worksheet 2-1). If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.

*If using Worksheet 2-5 (Qualified Dividends and Capital Gain Tax Worksheet), enter the amount from line 3 above on line 1 of Worksheet 2-5. Complete Worksheet 2-5 through line 9. Next, determine if you have a capital gain excess.

Figuring capital gain excess. To find out if you have a capital gain excess, subtract line 3 of your 2019 Estimated Tax Worksheet (Worksheet 2-1) from line 9 of Worksheet 2-5. If the result is more than zero, that amount is your capital gain excess.

Make these modifications only for purposes of filling out Worksheet 2-6.

a. Reduce (but not below zero) the amount you otherwise would enter on line 3 of Worksheet 2-5 by your capital gain excess.

b. Reduce (but not below zero) the amount you otherwise would enter on line 2 of Worksheet 2-5 by any of your capital gain excess not used in (a) above.

c. Reduce (but not below zero) the amount you otherwise would enter on line 5 of Worksheet 2-5 by your capital gain excess.

d. Reduce (but not below zero) the amount you otherwise would enter on line 6 of Worksheet 2-5 by your capital gain excess.

Page 38Chapter 2Estimated Tax for 2019

Worksheet 2-7. 2019 Annualized Estimated Tax Worksheet				Keep for Your Records
Note. For instructions, see Annualized Income Installment Method, earlier.

*Before you begin: Complete the 2019 Estimated Tax Worksheet—Worksheet 2-1.*
Section A (For Figuring Your Annualized Estimated Tax Payments —Complete each column after end of period shown.
Estates and trusts: See Form 1041-ES and Form 2210 for more information			(a)	(b)	(c)	(d)
			1/1/19–3/31/19	1/1/19–5/31/19	1/1/19–8/31/19	1/1/19–
						12/31/19
1.	Adjusted gross income (AGI) for each period (see instructions). Complete	1.
	Section B first . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.	Annualization amounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2.	4	2.4	1.5	1
3.	. . . . . . . . . . . . . . . . . . . . . . .Annualizedincome.Multiplyline1byline2	3.
4.	If you itemize, enter itemized deductions for period shown in the column
	headings (see instructions). If you take the deduction for qualified business
	income, add it to your itemized deductions. All others, enter -0- and skip to	4.
	line 7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Annualizationamounts...	5.	4	2.4	1.5	1
6.	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Multiplyline4byline5..	6.
7.	. . . . . . . . . . . . . . . . . . . . . . . . .StandarddeductionfromWorksheet2-4	7.
8.	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Enterthelargerofline6orline7	8.
9.	. . . . . . . . . . . . . . . . . . . . . . . . .Deductionforqualifiedbusinessincome	9.
10.	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Addlines8and9.......	10.
11.	. . . . . . . . . . . . . . . . .Subtractline10fromline3.Ifzeroorless,enter-0-	11.
12.	. . . . . . . . . . . .Figureyourtaxontheamountonline11(seeinstructions)	12.
13.	For each period, enter any tax from Forms 8814, 4972, and 6251. Also	13.
	include any recapture of education credits (see instructions) . . . . . . . . . . .
14.	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Addlines12and13.....	14.
15.	. . . . . . . . . .Enternonrefundablecreditsforeachperiod(seeinstructions)	15.
16.	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Subtractline15fromline14	16.
17.	. . . . . . . . . . . . . . . . . . . . .Self-employmenttaxfromline41ofSectionB	17.
18.	Enter other taxes for each period, including, if applicable, Additional Medicare	18.
	Tax and/or NIIT (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19.	. . . . . . . . . . . . . . . . . . . . . . . . . . . . .Totaltax.Addlines16,17,and18	19.
20.	Enter refundable credits for each period (see instructions for type of credits	20.
	allowed). Don’t include any income tax withholding on this line . . . . . . . . .
21.	. . . . . . . . . . . . . . . .Subtractline20fromline19.Ifzeroorless,enter-0-	21.
22.	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Applicablepercentage...	22.	22.5%	45%	67.5%	90%
23.	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Multiplyline21byline22.	23.
	*Complete lines 24 through 29 of one column before going to line 24 of*
	*the next column.*
24.	Enter the total of the amounts in all previous columns of line 29 . . . . . . . . .	24.
25.	Annualized income installment. Subtract line 24 from line 23. If zero or less,	25.
	enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26.	Enter 25% (0.25) of line 12c of your 2019 Estimated Tax Worksheet	26.
	(Worksheet 2-1) in each column . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27.	. . . . . . .Subtractline29ofthepreviouscolumnfromline28ofthatcolumn	27.
28.	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Addlines26and27.....	28.
29.	. . . . . . . . . . . . . .Enterthesmallerofline25orline28(seeinstructions)	29.
30.	. . . . . . . . . . .Totalrequiredpaymentsfortheperiod.Addlines24and29	30.
31.	Estimated tax payments made (line 32 of all previous columns) plus tax	31.
	withholding through the due date for the period (see instructions) . . . . . . . .
32.	Estimated tax payment required by the next due date. Subtract line 31 from
	line 30 and enter the result (but not less than zero) here and on your payment	32.
	voucher . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 2Estimated Tax for 2019Page 39

Worksheet 2-7. 2019 Annualized Estimated Tax Worksheet (Continued)					Keep for Your Records
Section B (For Figuring Your Annualized Estimated Self-Employment Tax)—Complete each column after end of period shown.
	(Form 1040 filers only)		(a)	(b)	(c)	(d)
			1/1/19–3/31/19	1/1/19–5/31/19	1/1/19–8/31/19	1/1/19–12/31/19

33.	Net earnings from self-employment for the period . . . . . . . . . .	33.
34.	Prorated social security tax limit . . . . . . . . . . . . . . . . . . . . . . .	34.	$33,225	$55,375	$88,600	$132,900
35.	Enter actual wages for the period subject to social security tax or
	the 6.2% portion of the tier 1 railroad retirement tax.
	Exception: If you file Form 4137 or Form 8919, see	35.
	instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
36.	Subtract line 35 from line 34. If zero or less, enter -0- . . . . . . . .	36.
37.	Annualization amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	37.	0.496	0.2976	0.186	0.124
38.	Multiply line 37 by the smaller of line 33 or line 36 . . . . . . . . . .	38.
39.	Annualization amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	39.	0.116	0.0696	0.0435	0.029
40.	Multiply line 33 by line 39 . . . . . . . . . . . . . . . . . . . . . . . . . . .	40.
41.	Add lines 38 and 40. Enter the result here and on line 17 of	41.
	Section A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
42.	Annualization amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	42.	8	4.8	3	2
43.	Deduction for self-employment tax. Divide line 41 by line 42.
	Enter the result here. Use this result to figure your AGI on	43.
	line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page 40Chapter 2Estimated Tax for 2019

Worksheet 2-8. 2019 Annualized Estimated Tax Worksheet—Line 10	Keep for Your Records
Qualified Dividends and Capital Gain Tax Worksheet

Note. To figure the annualized entries for lines 2, 3, 5, and 6 below, multiply the expected amount for the period by the annualization amount on line 2 of Worksheet 2-7 for the same period.

1. Enter the amount from the appropriate worksheet.
•	Line 11 of your 2019 Annualized Estimated Tax Worksheet
	(Worksheet 2-7).
•	Line 3 of Worksheet 2-9 (use if you will exclude or deduct foreign earned	1.
	income or housing) . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . .

2.	Enter your annualized qualified dividends expected for
	20191 ..................................		2.
3.	Enter your annualized net capital gain expected
	for 20191 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		3.
4.	. . . . . . . . . . . . . . . . . . . . . . . . . . .Addlines2and3		...._4............
5.	Enter your annualized 28% rate gain or loss expected
	for 20192 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		5.
6.	Enter your annualized unrecaptured section 1250 gain
	expected for 2019 . . . . . . . . . . . . . . . . . . . . . . . . .		6.
7.	. . . . . . . . . . . . . . . . . . . . . . . . . .Addlines5and6		7.
8.	. . . . . . . . . . . . . .Enterthesmallerofline3orline7		...._8............
9.	Subtract line 8 from line 4 . . . . . . . . . . . . . . . . . . . . .		...._9............
10.	Subtract line 9 from line 1. If zero or less, enter -0- . . . .		...._10............
11.	Enter the smaller of line 1 or $78,750 ($39,375 if single
	or married filing separately, or $52,750 if head of
	household) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		11.
12.	. . . . . . . . . . . .Enterthesmallerofline10orline11		12.
13.	a. Subtract line 4 from line 1. If zero or less,
	enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		13a.
	b. Enter the smaller of line 1 or:
	•	$160,725 if single or married filing separately;
		$160,700 if head of household; or
	•	$321,450 if married filing jointly or qualifying
	•	widow(er) . . . . . . . . . . . . . .. . . . . . . . . . . . . .	b.

	c. Enter the smaller of line 10 or line 13b . . . . . . . . .		c.
14.	. . . . . . . . . . . . . . . .Enterthelargerofline13aor13c		. . .	............	................ _14.
	Note. If line 11 and line 12 are the same, skip line 15 and go to line 16 .
15.	Subtract line 12 from line 11. This is the amount taxed at 0% . . . . . . . . . . . . .				....._15............
	Note. If lines 1 and 11 are the same, skip lines 16 through 36 and go to line 37.
16.	Enter the smaller of line 1 or line 9 . . . . . . . . . . . . . . .		. . .	...........	16.
17.	Enter the amount from line 15. If line 15 is blank, enter -0-		. . .	...........	17.
18.	. . .Subtractline17fromline16.Ifzeroorless,enter-0-		. . .	...........	18.
19.	Enter:
	•	$434,550 if single,
	•	$244,425 if married filing separately,
	•	$488,850 if married filing jointly or qualifying widow(er), or
	•	$461,700 if head of household . . . . . . . . . . . . . . ..	. . .	...........	19.

20.	Enter the smaller of line 1 or line 19 . . . . . . . . . . . . . . .		. . .	...........	20.
21.	. . . . . . . . . . . . . . . . . . . . . . . .Addlines14and15		21.
22.	Subtract line 21 from line 20. If zero or less,
	enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		22.
23.	. . . . . . . . . . . . . .Enterthesmallerofline18orline22		. . .	............	................ _23.
24.	Multiply line 23 by 15% (0.15) . . . . . . . . . . . . . . . . . . .		. . .	............	.................	...............
25.	Add line 17 and line 23. If line 1 equals the sum of lines 21 and 23, skip lines
	26 through 36 and go to line 37 . . . . . . . . . . . . . . . . . .		. . .	...........	25.
26.	. . . . . . . . . . . . . . . . . . . .Subtractline25fromline16		. . .	............	....._26............
27.	Multiply line 26 by 20% (0.20) . . . . . . . . . . . . . . . . . . .		. . .	............	.................	...............
28.	Enter the smaller of line 3 or line 6 . . . . . . . . . . . . . . .		. . .	...........	28.
29.	. . . . . . . . . . . . . . . . . . . . . . . . .Addlines4and14		29.
30.	. . . . . . . . . . . . .Entertheamountfromline1above		30.
31.	. . .Subtractline30fromline29.Ifzeroorless,enter-0-		. . .	...........	31.
32.	. . .Subtractline31fromline28.Ifzeroorless,enter-0-		. . .	............	....._32............
33.	Multiply line 32 by 25% (0.25) . . . . . . . . . . . . . . . . . . .		. . .	............	.................	...............
	Note. If line 5 is zero or blank, skip lines 34 through 36 and go to line 37.
34.	Add lines 14, 15, 23, 26, and 32 . . . . . . . . . . . . . . . . .		. . .	............	....._34............
35.	Subtract line 34 from line 1 . . . . . . . . . . . . . . . . . . . . .		. . .	............	....._35............

24.

27.

33.

Chapter 2Estimated Tax for 2019Page 41

Worksheet 2-8. 2019 Annualized Estimated Tax Worksheet—Line 10
	Qualified Dividends and Capital Gain Tax Worksheet	Keep for Your Records
	(Continued)
36.	Multiply line 35 by 28% (0.28) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	..._36.
37.	.Figurethetaxontheamountonline14fromthe2019TaxRateSchedules..........................	..._37.
38.	.Addlines24,27,33,36,and37.......................................................	...38.
39.	Figure the tax on the amount on line 1 from the 2019 Tax Rate Schedules	..._39.
	............................
40.	Tax on all taxable income (including capital gains and qualified dividends). Enter the smaller of line 38 or
	line 39 here and on line 12 of the appropriate column of the 2019 Annualized Estimated Tax Worksheet (or line 4 of
	Worksheet 2-9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	...40.


1 If you expect to deduct investment interest expense, don’t include on this line any qualified dividends or net capital gain that you will elect to treat as
investment income.
2 This includes a section 1202 exclusion from eligible gain on qualified small business stock and gain or loss from the sale or exchange of collectibles. See the
Instructions for Schedule D (Form 1040) for more information.

Worksheet 2-9. 2019 Annualized Estimated Tax Worksheet—Line 10		Keep for Your Records
	Foreign Earned Income Tax Worksheet

Before you begin:If line 11 of Worksheet 2-7 (2019 Annualized Estimated Tax Worksheet) is zero for the period, don’t complete this worksheet.

1. Enter the amount from line 11 of your 2019 Annualized Estimated Tax Worksheet for the period . . . . . .

1.

2. Enter the annualized amount* of foreign earned income and housing amount you (and your spouse if

filing jointly) expect to exclude or deduct for the period on Form 2555 or Form 2555-EZ . . . . . . . . . . . .	2.
3. Add lines 1 and 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3.

4. Tax on the amount on line 3. Use the 2019 Tax Rate Schedules or Worksheet 2-8,**

as appropriate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4.
5. Tax on the amount on line 2. Use the 2019 Tax Rate Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5.

6. Subtract line 5 from line 4. Enter the result here and on line 12 of your 2019 Annualized Estimated Tax

Worksheet (Worksheet 2-7). If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.

To figure the annualized amount for line 2, multiply the expected exclusion for the period by the annualization amount on line 2 of Worksheet 2-7 for the same period.

If using Worksheet 2-8 (Qualified Dividends and Capital Gain Tax Worksheet), enter the amount from line 3 above on line 1 of Worksheet 2-8. Complete Worksheet 2-8 through line 9. Next, determine if you have a capital gain excess.

Figuring capital gain excess. To find out if you have a capital gain excess for the appropriate period, subtract line 11 of Worksheet 2-7 from line 9 of Worksheet 2-8. If the result is more than zero, that amount is your capital gain excess.

No capital gain excess. If you don’t have a capital gain excess, complete the rest of Worksheet 2-8 according to its instructions. Then complete lines 5 and 6 above.

Capital gain excess. If you have a capital gain excess, complete a second Worksheet 2-8 as instructed above but in its entirety and with the following additional modifications. Then complete lines 5 and 6 above.

Make these modifications only for purposes of filling out Worksheet 2-9.

a. Reduce (but not below zero) the amount you otherwise would enter on line 3 of Worksheet 2-8 by your capital gain excess.

b. Reduce (but not below zero) the amount you otherwise would enter on line 2 of Worksheet 2-8 by any of your capital gain excess not used in (a) above.

c. Reduce (but not below zero) the amount you otherwise would enter on line 5 of Worksheet 2-8 by your capital gain excess.

d. Reduce (but not below zero) the amount you otherwise would enter on line 6 of Worksheet 2-8 by your capital gain excess.

Page 42Chapter 2Estimated Tax for 2019

3.

Credit for Withholding and Estimated Tax for 2018

Introduction

When you file your 2018 income tax return, take credit for all the income tax and excess social security or railroad retirement tax withheld from your salary, wages, pensions, etc. Also take credit for the estimated tax you paid for 2018. These credits are subtracted from your total tax. Because these credits are refundable, you should file a return and claim these credits, even if you don’t owe tax.

If the total of your withholding and your esti-mated tax payments for any payment period is less than the amount you needed to pay by the due date for that period, you may be charged a penalty, even if the total of these credits is more than your tax for the year.

Topics

This chapter discusses:

How to take credit for withholding;

How to take credit for estimated taxes you paid; and

How to take credit for excess social security, Medicare, or railroad retirement tax withholding.

written request or within 30 days after your final wage payment, whichever is later.

If you haven’t received your Form W-2 by January 31, contact your employer or payer to request a copy. If you still don’t get the form by the end of February, use Tax Topic 154 to find out what to do.

Form W-2 shows your total pay and other compensation and the income tax, social secur-ity tax, and Medicare tax that was withheld dur-ing the year. Total the federal income tax with-held (shown in box 2 of all Forms W-2 received) and enter that amount on the appropriate line of your tax return.

In addition, Form W-2 is used to report any taxable sick pay you received and any income tax withheld from your sick pay. Your sick pay may be combined with other wages in one Form W-2 or you may receive a separate Form W-2 for sick pay.

If you file a paper tax return, attach Copy B of Form W-2 to your return.

Form W-2G

If you had gambling winnings in 2018, the payer may have withheld income tax. If tax was with-held, the payer will give you a Form W-2G showing the amount you won and the amount of tax withheld.

Report the amounts you won on Schedule 1 (Form 1040), line 21. Take credit for the tax withheld on line 16 of Form 1040.

Gambling losses can be deducted on Schedule A (Form 1040) as a miscellaneous itemized deduction. However, you can’t deduct more than the gambling winnings you report on Form 1040.

File Form W-2G with your income tax return only if it shows any federal income tax withheld in box 4.

Form 1099-R, Distributions From Pen-sions, Annuities, Retirement or Profit-Shar-ing Plans, IRAs, Insurance Contracts, etc.;

Form SSA-1099, Social Security Benefit Statement; and

Form RRB-1099, Payments by the Rail-road Retirement Board.

Reporting your withholding. Report on your tax return all federal income tax withholding shown on your Form 1099, Form SSA-1099, and/or Form RRB-1099. Include the amount withheld in the total on line 16 of Form 1040.

Form 1099-R. Attach Form 1099-R to your paper return if federal income tax withholding is shown in box 4. Don’t attach any other Form 1099.

Form Not Correct

If you receive a form with incorrect information, you should ask the payer for a corrected form. Call the telephone number or write to the ad-dress given for the payer on the form. The cor-rected Form W-2G or Form 1099 you receive will have an “X” in the “CORRECTED” box at the top of the form. A special form, Form W-2c, Corrected Wage and Tax Statement, is used to correct a Form W-2.

In certain situations, you will receive two forms in place of the original incorrect form. This will happen when your taxpayer identifica-tion number is wrong or missing, your name and address are wrong, or you received the wrong type of form (for example, a Form 1099-DIV instead of a Form 1099-INT). One new form you receive will be the same incorrect form or have the same incorrect information, but all money amounts will be zero. This form will have an “X” in the “CORRECTED” box at the top of the form. The second new form should have all the correct information, prepared as though it is the original (the “CORRECTED” box won’t be checked).

Withholding

If you had income tax withheld during 2018, you generally should be sent a statement by Janu-ary 31, 2019, showing your income and the tax withheld. Depending on the source of your in-come, you will receive:

Form W-2, Wage and Tax Statement;

Form W-2G, Certain Gambling Winnings; or

A form in the 1099 series.

Form W-2

Your employer is required to provide or send Form W-2 to you no later than January 31, 2019. You should receive a separate Form W-2 from each employer you worked for.

If you stopped working before the end of 2018, your employer could have given you your Form W-2 at any time after you stopped work-ing. However, your employer must provide or send it to you by January 31, 2019.

If you ask for the form, your employer must send it to you within 30 days after receiving your

The 1099 Series

Most forms in the 1099 series are not filed with your return. In general, these forms should be furnished to you by January 31, 2019. Unless instructed to file any of these forms with your re-turn, keep them for your records.

There are several different forms in this ser-ies, including:

Form 1099-B, Proceeds From Broker and Barter Exchange Transactions;

Form 1099-C, Cancellation of Debt;

Form 1099-DIV, Dividends and Distribu-tions;

Form 1099-G, Certain Government Pay-ments;

Form 1099-INT, Interest Income;

Form 1099-K, Payment Card and Third-Party Network Transactions;

Form 1099-MISC, Miscellaneous Income;

Form 1099-OID, Original Issue Discount;

Form 1099-PATR, Taxable Distributions Received From Cooperatives;

Form 1099-Q, Payments From Qualified Education Programs (Under Sections 529 and 530);

Form Received After Filing

If you file your return and you later receive a form for income that you didn’t include on your return, report the income and take credit for any income tax withheld by filing Form 1040X, Amended U.S. Individual Income Tax Return.

Separate Returns

If you are married but file a separate return, you can take credit only for the tax withheld from your own income. Don’t include any amount withheld from your spouse's income. However, different rules may apply if you live in a com-munity property state.

Community property states. Community property states include the following.

Arizona.

California.

Idaho.

Louisiana.

Nevada.

New Mexico.

Texas.

Chapter 3Credit for Withholding and Estimated Tax for 2018Page 43

Table 3-1. Example for Fiscal Year Ending June 30, 2018—Miles Hanson

Form W-2

Miles' records

Tax return for FY ending

Tax return for FY ending

6/30/20171

6/30/2018

Date

Wages

With-

Wages

With-

Wages

With-

Wages

With-

holding

holding

holding

holding

CY 20172

$31,200

$3,328

1/1/2017–

$15,000

$1,601

$15,000

6/30/2017

7/1/2017–

$16,200

$1,727

$16,200

$3,328

12/31/2017

CY 2018

$37,700

$4,3163

1/1/2018–

$18,850

$2,158

$18,850

6/30/2018

7/1/2018–

$18,8504

$2,158

12/31/2018

1 Miles' tax return for FY ending 6/30/2017 also included his wages for 7/1–12/31/2016 and the withholding shown on his 2016 Form W-2.

2 Calendar year (January 1–December 31).

3 Withholding shown on 2018 Form W-2 ($4,316) will be included in Miles' tax return for FY ending 6/30/2019, the fiscal year in which calendar year 2018 ends.

4 Wages for 7/1–12/31/2018 ($18,850) will be included in Miles' tax return for FY ending 6/30/2019, the fiscal year in which the wages were received.

Washington.

Wisconsin.

Generally, if you live in a community property state and file a separate return, you and your spouse each must report half of all community income in addition to your own separate in-come. If you are required to report half of all community income, you are entitled to take credit for half of all taxes withheld on the com-munity income. If you were divorced during the year, each of you generally must report half the community income and can take credit for half the withholding on that community income for the period before the divorce.

For more information on these rules, and some exceptions, see Pub. 555, Community Property.

Fiscal Years (FYs)

If you file your tax return on the basis of a fiscal year (a 12-month period ending on the last day of any month except December), you must fol-low special rules, described next, to determine your credit for federal income tax withholding.

Fiscal year withholding. You can claim credit on your tax return only for the tax withheld dur-ing the calendar year (CY) ending within your fiscal year. You can’t claim credit for any of the tax withheld during the calendar year beginning in your fiscal year. You will be able to claim credit for that withholding on your return for your next fiscal year.

The Form W-2 or 1099 you receive for the calendar year that ends during your fiscal year will show the tax withheld and the income you received during that calendar year.

Although you take credit for all the withheld tax shown on the form, report only the part of the income shown on the form that you received during your fiscal year. Add to that the income you received during the rest of your fiscal year.

Example. Miles Hanson files his return for a fiscal year ending June 30, 2018. In January 2018, he received a Form W-2 that showed that his wages for 2017 were $31,200 and that his income tax withheld was $3,328. His records

show that he had received $15,000 of the wa-ges by June 30, 2017, and $16,200 from July 1 through December 31, 2017. See Table 3-1.

On his return for the fiscal year ending June 30, 2018, Miles will report the $16,200 he was paid in July through December of 2017, plus the $18,850 he was paid during the rest of the fiscal year, January 1, 2018, through June 30, 2018. However, he takes credit for all $3,328 that was withheld during 2017.

On his return for the fiscal year ending June 30, 2017, he reported the $15,000 he was paid in January through June 2017, but took no credit for the tax withheld during that time. On his return for the fiscal year ending June 30, 2019, he will take the credit for any tax withheld during 2018 but not for any tax withheld during 2019.

Backup withholding. If income tax has been withheld under the backup withholding rule, take credit for it on your tax return for the fiscal year in which you received the income.

Example. Emily Smith's records show that she received income in November 2018 and February 2019 from which there was backup withholding ($100 and $50, respectively). Emily takes credit for the entire $150 of backup with-holding on her tax return for the fiscal year end-ing September 30, 2019.

Estimated Tax

Take credit for all your estimated tax payments for 2018 on Schedule 5 (Form 1040), line 66. In-clude any overpayment from 2017 that you had credited to your 2018 estimated tax.

If you were a beneficiary of an estate or trust, you should receive a Schedule K-1 (Form 1041), Beneficiary's Share of Income, Deduc-tions, Credits, etc., from the fiduciary. If you have estimated taxes credited to you from the estate or trust (from Schedule K-1 (Form 1041)), you must report the estimated taxes on Schedule E (Form 1040). On the dotted line next to the entry space for line 37 of Schedule E (Form 1040), enter “ES payment claimed” and the amount. However, don’t include this amount

in the total on line 37. Instead, enter the amount on Schedule 5 (Form 1040), line 66. This esti-mated tax payment for 2018 is treated as being made by you on January 15, 2019.

Name changed. If you changed your name, and you made estimated tax payments using your former name, attach a statement to the front of your paper tax return indicating:

When you made the payments,

The amount of each payment,

Your name when you made the payments, and

The social security number under which you made the payments.

The statement should cover payments you made jointly with your spouse as well as any you made separately.

Be sure to report the change to your local Social Security Administration office before fil-ing your 2019 tax return. This prevents delays in processing your return and issuing refunds. It also safeguards your future social security ben-efits. For more information, call the Social Se-curity Administration at 800-772-1213.

Separate Returns

If you and your spouse made separate estima-ted tax payments for 2018 and you file separate returns, you can take credit only for your own payments.

If you made joint estimated tax payments, you must decide how to divide the payments between your returns. One of you can claim all of the estimated tax paid and the other none, or you can divide it in any other way you agree on. If you can’t agree, you must divide the pay-ments in proportion to each spouse's individual tax as shown on your separate returns for 2018.

Example. James and Evelyn Brown made joint estimated tax payments for 2018 totaling $3,000. They file separate 2018 Forms 1040. James' tax is $4,000 and Evelyn's is $1,000. If they don’t agree on how to divide the $3,000, they must divide it proportionately between their returns. Because James' tax ($4,000) is 80% of the total tax ($5,000), his share of the estimated

Page 44Chapter 3Credit for Withholding and Estimated Tax for 2018

tax is $2,400 (80% of $3,000). The balance, $600 (20% of $3,000), is Evelyn's share.

Divorced Taxpayers

If you made joint estimated tax payments for 2018 and you were divorced during the year, ei-ther you or your former spouse can claim all of the joint payments, or you each can claim part of them. If you can’t agree on how to divide the payments, you must divide them in proportion to each spouse's individual tax as shown on your separate returns for 2018. See Example under Separate Returns, earlier.

If you claim any of the joint payments on your tax return, enter your former spouse's so-cial security number (SSN) in the space provi-ded at the top of page 1 of Form 1040. If you di-vorced and remarried in 2018, enter your present spouse's SSN in that space. Enter your former spouse's SSN, followed by “DIV,” under Payments to the left of Schedule 5 (Form 1040), line 66.

Excess Social Security or Railroad Retirement Tax Withholding

Most employers must withhold social security tax from your wages. In some cases, however, the federal government and state and local gov-ernments don’t have to withhold social security tax from their employees' wages. If you work for a railroad employer, that employer must with-hold tier 1 railroad retirement (RRTA) tax and tier 2 RRTA tax.

Two or more employers. If you worked for two or more employers in 2018, too much social

security tax or tier 1 RRTA tax may have been withheld from your pay. You may be able to claim the excess as a credit against your in-come tax when you file your return. Table 3-2 shows the maximum amount that should have been withheld for any of these taxes for 2018. Figure the excess withholding on the appropri-ate worksheet.

Table 3-2. Maximum Social

Security and RRTA Withholding for 2018

	Maximum		Maximum
	wages	Tax
Type of tax	subject		tax to be
	to tax	rate	withheld
Social	$128,400	6.2%	$7,960.80
security . . . . .
Tier 1	$128,400	6.2%	$7,960.80
RRTA .....
Tier 2	$95,400	4.9%	$4,674.60
RRTA .....

Joint returns. If you are filing a joint return, you and your spouse must figure any excess social security or tier 1 RRTA separately.

Note. All wages are subject to Medicare tax withholding.

Employer's error. If you had only one em-ployer and he or she withheld too much social security, Medicare, or tier 1 RRTA tax, ask the employer to refund the excess amount to you. If the employer refuses to refund the overcollec-tion, ask for a statement indicating the amount of the overcollection to support your claim. File a claim for refund using Form 843.

Worksheet for Nonrailroad Employees

If you didn’t work for a railroad during 2018, fig-ure the excess social security withholding on Worksheet 3-1.

Note. If you worked for both a railroad em-ployer and a nonrailroad employer, use Work-sheet 3-2 to figure excess social security and tier 1 RRTA tax.

Where to claim credit for excess social se-curity withholding. Enter the excess on Schedule 5 (Form 1040), line 72.

Write “Excess SST” and show the amount of the credit in the space to the left of the line.

Worksheets for Railroad Employees

If you worked for a railroad during 2018, figure your excess withholding on Worksheet 3-2 and Worksheet 3-3, as appropriate.

Where to claim credit for excess tier 1 RRTA withholding. Enter the excess on Schedule 5 (Form 1040), line 72.

Write “Excess SST” and show the amount of the credit in the space to the left of the line.

How to claim refund of excess tier 2 RRTA. To claim a refund of tier 2 tax, use Form 843. Be sure to attach a copy of all of your Forms W-2.

See Worksheet 3-3 and the Instructions for Form 843, for more details.

Worksheet 3-1. Excess Social Security—Nonrailroad Employees		Keep for Your Records

1.	Add all social security tax withheld (but not more than
	$7,960.80 for each employer). This tax should be shown	1.
	in box 4 of your Forms W-2. Enter the total here . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.	Enter any uncollected social security tax on tips or group-term life insurance on Schedule 4 (Form	2.
	1040), line 62, identified by “UT” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.	.Addlines1and2.If$7,960.80orless,stophere.Youcan’tclaimthecredit................	3.
4.	Social security limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4.	$7,960.80
5.	.Excess.Subtractline4fromline3.................................................	5.

Chapter 3Credit for Withholding and Estimated Tax for 2018Page 45

Worksheet 3-2. Excess Social Security and Tier 1 RRTA—Railroad

Employees

Keep for Your Records

1.Add all social security and tier 1 RRTA tax withheld (but not more than $7,960.80 for each employer). Social security tax should be shown in box 4 and tier 1 RRTA tax should be shown

in box 14 of your Forms W-2. Enter the total here. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.Enter any uncollected social security and tier 1 RRTA tax on tips or group-term life insurance on Schedule 4 (Form 1040), line 62, identified by “UT” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3. Add lines 1 and 2. If $7,960.80 or less, stop here. You can’t claim the credit . . . . . . . . . . . . . . . . .

4. Social security and tier 1 RRTA tax limit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5. Excess. Subtract line 4 from line 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.

2.

3.

4. $7,960.80

5.

Worksheet 3-3. Excess Tier 2 RRTA—Railroad Employees

Keep for Your Records

1.Add all tier 2 RRTA tax withheld (but not more than $4,674.60 for each employer). Box 14 of your Forms W-2 should show tier 2 RRTA tax. Enter the total here . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2. Enter any uncollected tier 2 RRTA tax on tips or group-term life insurance on Schedule 4 (Form

1040), line 62, identified by “UT”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3. Add lines 1 and 2. If $4,674.60 or less, stop here. You can’t claim the credit . . . . . . . . . . . . . . . . .

4. Tier 2 RRTA tax limit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5. Excess. Subtract line 4 from line 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.

2.

3.

4. $4,674.60

5.

Page 46Chapter 3Credit for Withholding and Estimated Tax for 2018

4.

Underpayment Penalty for 2018

Introduction

If you didn’t pay enough tax, either through withholding or by making timely estimated tax payments, you will have underpaid your estima-ted tax and may have to pay a penalty.

You may be eligible to waive the under-TIP payment penalty if, due to tax reform, you were unable to accurately calcu-late your required estimated tax payments for

2018. See Waiver of Penalty, for more informa-tion.

You may understand this chapter bet-TIP ter if you can refer to a copy of your lat-

est federal income tax return.

No penalty. Generally, you won’t have to pay a penalty for 2018 if any of the following apply.

The total of your withholding and timely es-timated tax payments was at least as much as your 2017 tax. (See Special rules for certain individuals, later, for higher income taxpayers and farmers and fishermen.)

The tax balance due on your 2018 return is no more than 10% of your total 2018 tax, and you paid all required estimated tax payments on time.

Your total tax for 2018 minus your with-holding is less than $1,000.

You didn’t have a tax liability for 2017.

You didn’t have any withholding taxes and your current year tax (less any household employment taxes) is less than $1,000.

IRS can figure the penalty for you. If you think you owe the penalty, but you don’t want to figure it yourself when you file your tax return, you may not have to. Generally, the IRS will fig-ure the penalty for you and send you a bill.

You only need to figure your penalty in the following three situations.

You are requesting a waiver of part, but not all, of the penalty.

You are using the annualized income in-stallment method to figure the penalty.

You are treating the federal income tax withheld from your income as paid on the dates actually withheld.

However, if these situations don’t apply to you, and you think you can lower or eliminate your penalty, complete Form 2210 or Form 2210-F and attach it to your return. See Form 2210, later.

Topics

This chapter discusses:

The general rule for the underpayment penalty,

Special rules for certain individuals,

Exceptions to the underpayment penalty,

How to figure your underpayment and the amount of your penalty on Form 2210, and

How to ask the IRS to waive the penalty.

Useful Items

You may want to see:

Form (and Instructions)

2210 Underpayment of Estimated Tax by Individuals, Estates, and Trusts

2210-F Underpayment of Estimated Tax

by Farmers and Fishermen

See chapter 5 for information about getting these forms.

General Rule

In general, you may owe a penalty for 2018 if the total of your withholding and timely estima-ted tax payments didn’t equal at least the smaller of:

1. 90% of your 2018 tax, or

2. 100% of your 2017 tax. (Your 2017 tax re-turn must cover a 12-month period.)

Your 2018 tax, for this purpose, is defined un-der Total tax for 2018, later.

Special rules for certain individuals. There are special rules for farmers and fishermen and certain higher income taxpayers.

Farmers and fishermen. If at least two-thirds of your gross income for 2017 or 2018 is from farming or fishing, substitute 662/3% for 90% in (1) above.

See Farmers and Fishermen, later.

Higher income taxpayers. If your AGI for 2017 was more than $150,000 ($75,000 if your 2018 filing status is married filing a separate re-turn), substitute 110% for 100% in (2) under General Rule, earlier. This rule does not apply to farmers or fishermen.

For 2017, AGI is the amount shown on Form 1040, line 37; Form 1040A, line 21; and Form 1040EZ, line 4.

Penalty figured separately for each period. Because the penalty is figured separately for each payment period, you may owe a penalty for an earlier payment period even if you later paid enough to make up the underpayment. This is true even if you are due a refund when you file your income tax return.

Example. You didn’t make estimated tax payments for 2018 because you thought you had enough tax withheld from your wages. Early in January 2019, you made an estimate of your total 2018 tax. Then you realized that your withholding was $2,000 less than the amount needed to avoid a penalty for underpayment of estimated tax.

Chapter 4

On January 10, you made an estimated tax payment of $3,000, which is the difference be-tween your withholding and your estimate of your total tax. Your final return shows your total tax to be $50 less than your estimate, so you are due a refund.

You don’t owe a penalty for your payment due January 15, 2019. However, you may owe a penalty through January 10, 2019, the day you made the $3,000 payment, for your under-payments for the earlier payment periods.

Minimum required each period. You will owe a penalty for any 2018 payment period for which your estimated tax payment plus your withholding for the period and overpayments applied from previous periods was less than the smaller of:

1. 22.5% of your 2018 tax, or

2. 25% of your 2017 tax. (Your 2017 tax re-turn must cover a 12-month period.)

Minimum required for higher income taxpayers. If you are subject to the rule for higher income taxpayers, discussed above, substitute 27.5% for 25% in (2) under General Rule, earlier.

When penalty is charged. If you miss a pay-ment or you paid less than the minimum re-quired in a period, you may be charged an un-derpayment penalty from the date the amount was due to the date the payment is made. If a payment is mailed, the date of the U.S. post-mark is considered the date of payment.

If a payment is made electronically, the date the payment is shown on your payment account (checking, savings, etc.) is considered to be the date of payment.

Estate or trust payments of estimated tax. If you have estimated taxes credited to you from an estate or trust (Schedule K-1 (Form 1041)), treat the payment as made by you on January 15, 2019.

Amended returns. If you file an amended re-turn by the due date of your original return, use the tax shown on your amended return to figure your required estimated tax payments. If you file an amended return after the due date of the original return, use the tax shown on the original return.

However, if you and your spouse file a joint return after the due date to replace separate re-turns you originally filed by the due date, use the tax shown on the joint return to figure your required estimated tax payments. This rule ap-plies only if both original separate returns were filed on time.

2017 separate returns and 2018 joint re-turn. If you file a joint return with your spouse for 2018, but you filed separate returns for 2017, your 2017 tax is the total of the tax shown on your separate returns. You filed a separate return if you filed as single, head of household, or married filing separately.

2017 joint return and 2018 separate re-turns. If you file a separate return for 2018, but you filed a joint return with your spouse for 2017, your 2017 tax is your share of the tax on the joint return. You are filing a separate return

Underpayment Penalty for 2018Page 47

if you file as single, head of household, or mar-ried filing separately.

To figure your share of the taxes on a joint return, first figure the tax both you and your spouse would have paid had you filed separate returns for 2017 using the same filing status as for 2018. Then multiply the tax on the joint re-turn by the following fraction.

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. Lisa and Paul filed a joint return for 2017 showing taxable income of $49,000 and a tax of $6,421. Of the $49,000 taxable in-come, $41,000 was Lisa's and the rest was Paul's. For 2018, they file married filing sepa-rately. Lisa figures her share of the tax on the 2017 joint return as follows.

2017 tax on $41,000 based on a	$ 5,995
separate return . . . . . . . . . . . . . . . . .
2017 tax on $8,000 based on a	803
separate return . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . .Total	$ 6,798
Lisa's percentage of total tax	88.2%
($5,995÷$6,798) ...............
Lisa's part of tax on joint return	$ 5,663
($6,421 × 88.2% (0.882)) . . . . . . . . .

Form 2210. In most cases, you don’t need to file Form 2210. The IRS will figure the penalty for you and send you a bill. If you want us to fig-ure the penalty for you, leave the penalty line on your return blank. Don’t file Form 2210.

To determine if you should file Form 2210, see Part II of Form 2210. If you decide to figure your penalty, complete Part I, Part II, and either Part III or Part IV of the form and the Penalty Worksheet in the Instructions for Form 2210.

On Form 1040, enter the amount of your penalty on line 23. If you owe tax on line 22, add the penalty to your tax due and show your total payment on line 22. If you are due a refund, subtract the penalty from the overpayment and enter the result on line 19.

Lowering or eliminating the penalty. You may be able to lower or eliminate your penalty if you file Form 2210. You must file Form 2210 with your return if any of the following applies.

You request a waiver. See Waiver of Pen-alty, later.

You use the annualized income installment method. See the explanation of this method under Annualized Income Install-ment Method (Schedule AI), later.

You use your actual withholding for each payment period for estimated tax purpo-ses. See Actual withholding method under Figuring Your Underpayment (Part IV, Sec-tion A), later.

You base any of your required installments on the tax shown on your 2017 return and you filed or are filing a joint return for either 2017 or 2018, but not for both years.

Exceptions

Generally, you don’t have to pay an underpay-ment penalty if either:

Your total tax is less than $1,000, or

You had no tax liability last year.

Less Than $1,000 Due

You don’t owe a penalty if the total tax shown on your return minus the amount you paid through withholding (including excess social se-curity and tier 1 railroad retirement (RRTA) tax withholding) is less than $1,000.

Total tax for 2018. For 2018, your total tax on Form 1040 is the amount on line 15 reduced by the following.

1. Unreported social security and Medicare tax or RRTA tax from Forms 4137 or 8919 on Schedule 4 (Form 1040), line 58.

2. Any tax included on Schedule 4 (Form 1040), line 59, for excess contributions to an IRA, Archer MSA, Coverdell education savings account, health savings account, and ABLE account; or any tax on excess accumulations in qualified retirement plans.

3. The following write-ins on Schedule 4 (Form 1040), line 62.

a. Uncollected social security and Medi-care tax or RRTA tax on tips or group-term life insurance.

b. Tax on excess golden parachute pay-ments.

c. Excise tax on insider stock compen-sation from an expatriated corpora-tion.

d. Look-back interest due under section 167(g).

e. Look-back interest due under section 460(b).

f. Recapture of federal mortgage sub-sidy.

4. Any shared responsibility payment on Schedule 4 (Form 1040), line 61.

5. Any refundable credit amounts on Form 1040, line 17a, b, or c, and Schedule 5 (Form 1040), lines 70 and 73, and credit from Form 8885 included on line 74.

Note. When figuring the amount on Sched-ule 4 (Form 1040), line 62, include household employment taxes only if you had federal in-come tax withheld from your income or you would owe the penalty even if you didn’t include those taxes.

Paid through withholding. For 2018, the amount you paid through withholding on Form 1040 is the amount on line 16 plus any excess social security or tier 1 RRTA tax withholding on Schedule 5 (Form 1040), line 72. Add to that any write-in amount on line 18, identified as “Form 8689.”

No Tax Liability Last Year

You don’t owe a penalty if you had no tax liabil-ity last year and you were a U.S. citizen or resi-dent for the whole year. For this rule to apply, your tax year must have included all 12 months of the year.

You had no tax liability for 2017 if your total tax was zero or you were not required to file an income tax return.

Example. Ray, who is single and 22 years old, was unemployed for a few months during 2017. He earned $6,700 in wages before he was laid off, and he received $1,400 in unem-ployment compensation afterwards. He had no other income. Even though he had gross in-come of $8,100, he didn’t have to pay income tax because his gross income was less than the filing requirement for a single person under age 65 ($10,400 for 2017). He filed a return only to have his withheld income tax refunded to him.

In 2018, Ray began regular work as an inde-pendent contractor. Ray made no estimated tax payments in 2018. Even though he did owe tax at the end of the year, Ray does not owe the un-derpayment penalty for 2018 because he had no tax liability in 2017.

Total tax for 2017. For 2017, your total tax on Form 1040 is the amount on line 63 reduced by the following.

1. Unreported social security and Medicare tax or RRTA tax from Forms 4137 or 8919 (line 58).

2. Any tax included on line 59 for excess contributions to IRAs, Archer MSAs, Cov-erdell education savings accounts, and health savings accounts, or any tax on ex-cess accumulations in qualified retirement plans.

3. The following write-ins on line 62.

a. Uncollected social security and Medi-care tax or RRTA tax on tips or group-term life insurance.

b. Tax on excess golden parachute pay-ments.

c. Excise tax on insider stock compen-sation from an expatriated corpora-tion.

d. Look-back interest due under section 167(g).

e. Look-back interest due under section 460(b).

f. Recapture of federal mortgage sub-sidy.

4. Any shared responsibility payment on line 61.

5. Any refundable credit amounts listed on lines 66a, 67, 68, 69, and 72.

If you filed Form 1040A, your 2017 total tax is the amount on line 39 reduced by any refund-able credits on lines 42a, 43, 44, and 45.

If you filed Form 1040EZ, your 2017 total tax is the amount on line 12 reduced by the amount on lines 8a and 11.

Page 48Chapter 4Underpayment Penalty for 2018

Figuring Your Required Annual Payment (Part I)

Figure your required annual payment in Part I of Form 2210, following the line-by-line instruc-tions. If you rounded the entries on your tax re-turn to whole dollars, you can round on Form 2210.

Example. The tax on Lori Lane's 2017 re-turn was $12,400. Her AGI was not more than $150,000 for either 2017 or 2018. The tax on her 2018 return (Form 1040, line 11) is $13,044. Schedule 4 (Form 1040), line 57 (self-employ-ment tax), is $8,902. Her 2018 total tax is $21,946.

For 2018, Lori had $1,600 income tax with-held and made four equal estimated tax pay-ments ($1,000 each). 90% of her 2018 tax is $19,751. Because she paid less than her 2017 tax ($12,400) and less than 90% of her 2018 tax ($19,751), and does not meet an exception, Lori knows that she owes a penalty for under-payment of estimated tax. The IRS will figure the penalty for Lori, but she decides to figure it herself on Form 2210 and pay it with her taxes when she files her tax return.

Lori's required annual payment is $12,400 (100% of 2017 tax) because that is smaller than 90% of her 2018 tax.

Different 2017 filing status. If you file a sepa-rate return for 2018, but you filed a joint return with your spouse for 2017, see 2017 joint return and 2018 separate returns, earlier, to figure the amount to enter as your 2017 tax on line 8 of Form 2210.

Short Method for Figuring the Penalty (Part III)

You may be able to use the short method in Part III of Form 2210 to figure your penalty for underpayment of estimated tax. If you qualify to use this method, it will result in the same pen-alty amount as the regular method. However, either the annualized income installment method or the actual withholding method, ex-plained later, may result in a smaller penalty.

You can use the short method only if you meet one of the following requirements.

You made no estimated tax payments for 2018 (it does not matter whether you had income tax withholding).

You paid the same amount of estimated tax on each of the four payment due dates.

If you don’t meet either requirement, figure your penalty using the regular method in Part IV of Form 2210 and the Penalty Worksheet in the instructions.

Note. If any payment was made before the due date, you can use the short method, but the penalty may be less if you use the regular method. However, if the payment was only a

few days early, the difference is likely to be small.

You can’t use the short method if any of the following apply.

You made any estimated tax payments late.

You checked box C or D in Part II of Form 2210.

You are filing Form 1040NR or 1040NR-EZ and you didn’t receive wages as an em-ployee subject to U.S. income tax with-holding.

If you use the short method, you can’t

use the annualized income installment CAUTION method to figure your underpayment for each payment period. Also, you can’t use your actual withholding during each period to figure your payments for each period. These methods, which may give you a smaller penalty amount, are explained under Figuring Your Un-derpayment (Part IV, Section A), later.

Complete Part III of Form 2210 following the line-by-line instructions in the Instructions for Form 2210.

Regular Method for Figuring the Penalty (Part IV)

You can use the regular method in Part IV of Form 2210 to figure your penalty for underpay-ment of estimated tax if you paid one or more estimated tax payments earlier than the due date.

You must use the regular method in Part IV of Form 2210 to figure your penalty for under-payment of estimated tax if any of the following apply to you.

You paid one or more estimated tax pay-ments on a date after the due date.

You paid at least one, but less than four, installments of estimated tax.

You paid estimated tax payments in un-equal amounts.

You use the annualized income installment method to figure your underpayment for each payment period.

You use your actual withholding during each payment period to figure your pay-ments.

Under the regular method, figure your un-derpayment for each payment period in Sec-tion A, then figure your penalty using the Pen-alty Worksheet in the Instructions for Form 2210. Enter the results on line 27 of Section B.

Figuring Your Underpayment (Part IV, Section A)

Figure your underpayment of estimated tax for each payment period in Section A following the line-by-line instructions in the Instructions for Form 2210. Complete lines 20 through 26 of the first column before going to line 20 of the next column.

Required installments—line 18. Your re-quired payment for each payment period

Chapter 4

(line 18) is usually one-fourth of your required annual payment (Part I, line 9). This method—the regular method—is the one to use if you received your income evenly throughout the year.

However, if you didn’t receive your income evenly throughout the year, you may be able to lower or eliminate your penalty by figuring your underpayment using the annualized income in-stallment method. First complete Schedule AI (Form 2210), then enter the amounts from line 27 of that schedule on line 18 of Form 2210, Part IV. See Annualized Income Install-ment Method (Schedule AI), later.

Payments made—line 19. Enter in each col-umn the total of:

Your estimated tax paid after the due date for the previous column and by the due date shown at the top of the column, and

One-fourth of your withholding.

For special rules for figuring your payments, see the Form 2210 instructions for line 19.

Your withholding is the amount on line 16, plus any excess social security or tier 1 RRTA tax withholding on Schedule 5 (Form 1040), line 72.

Actual withholding method. Instead of using one-fourth of your withholding for each quarter, you can choose to use the amounts ac-tually withheld by each due date. You can make this choice separately for the tax withheld from your wages and for all other withholding. This includes any excess social security and tier 1 RRTA tax withheld.

Using your actual withholding may result in a smaller penalty if most of your withholding oc-curred early in the year.

If you use your actual withholding, you must check box D in Form 2210, Part II. Then com-plete Form 2210 using the regular method (Part IV) and file it with your return.

Worksheet for Form 2210, Part IV, Section B—Figuring the Penalty

Figure the amount of your penalty for Section B using the Penalty Worksheet in the Instructions for Form 2210. The penalty is imposed on each underpayment amount shown on Form 2210, Section A, line 25, for the number of days that it remained unpaid.

For 2018, a 5% rate applies for the following periods: April 16 through June 30, July 1 through September 30, and October 1 through December 31. A 6% rate applies for the period January 1, 2019, through April 15, 2019.

Payments. Before completing the Penalty Worksheet, it may be helpful to make a list of the payments you made and income tax with-held after the due date (or the last day pay-ments could be made on time) for the earliest payment period an underpayment occurred. For example, if you had an underpayment for the first payment period, list your payments after April 15, 2018. You can use the table in the In-structions for Form 2210 to make your list. Fol-low those instructions for listing income tax withheld and payments made with your return.

Underpayment Penalty for 2018Page 49

Use the list to determine when each underpay-ment was paid.

If you mail your estimated tax payments, use the date of the U.S. postmark as the date of payment.

Line 1b. Apply the payments listed to the un-derpayment balance in the first column until it is fully paid. Apply payments in the order made.

Figuring the penalty. If an underpayment was paid in two or more payments on different dates, you must figure the penalty separately

for each payment. On line 3 of the Penalty Worksheet, enter the number of days between the due date (line 2) and the date of each pay-ment on line 1b. On line 4, figure the penalty for the amount of each payment applied on line 1b or the amount remaining unpaid. If no payments are applied, figure the penalty on the amount on line 1a.

Aid for counting days. Table 4-1 provides a simple method for counting the number of days between a due date and a payment date.

1. Find the number for the date the payment was due by going across to the column of the month the payment was due and mov-ing down the column to the due date.

2. In the same manner, find the number for the date the payment was made.

3. Subtract the due date “number” from the payment date “number.”

For example, if a payment was due on June

15 (61), but was not paid until September 1

(139), the payment was 78 days late(139 – 61).

Page 50Chapter 4Underpayment Penalty for 2018

Table 4-1. Calendar To Determine the Number of Days a Payment Is Late

Instructions. Use this table with Form 2210 if you are completing Part IV, Section B. First, find the number for the payment due date by going across to the column of the month the payment was due and moving down the column to the due date. Then, in the same manner, find the number for the date the payment was made. Finally, subtract the due date number from the payment date number. The result is the number of days the payment is late.

Example. The payment due date is June 15 (61). The payment was made on November 4 (203). The payment is 142 days late (203 – 61).

						Tax Year 2018
Day of	2018	2018	2018	2018	2018	2018	2018	2018	2018	2019	2019	2019	2019
Month	April	May	June	July	Aug.	Sept.	Oct.	Nov.	Dec.	Jan.	Feb.	Mar.	Apr.
1		16	47	77	108	139	169	200	230	261	292	320	351
2		17	48	78	109	140	170	201	231	262	293	321	352
3		18	49	79	110	141	171	202	232	263	294	322	353
4		19	50	80	111	142	172	203	233	264	295	323	354
5		20	51	81	112	143	173	204	234	265	296	324	355
6		21	52	82	113	144	174	205	235	266	297	325	356
7		22	53	83	114	145	175	206	236	267	298	326	357
8		23	54	84	115	146	176	207	237	268	299	327	358
9		24	55	85	116	147	177	208	238	269	300	328	359
10		25	56	86	117	148	178	209	239	270	301	329	360
11		26	57	87	118	149	179	210	240	271	302	330	361
12		27	58	88	119	150	180	211	241	272	303	331	362
13		28	59	89	120	151	181	212	242	273	304	332	363
14	0	29	60	90	121	152	182	213	243	274	305	333	364
15		30	61	91	122	153	183	214	244	275	306	334	365
16	1	31	62	92	123	154	184	215	245	276	307	335
17	2	32	63	93	124	155	185	216	246	277	308	336
18	3	33	64	94	125	156	186	217	247	278	309	337
19	4	34	65	95	126	157	187	218	248	279	310	338
20	5	35	66	96	127	158	188	219	249	280	311	339
21	6	36	67	97	128	159	189	220	250	281	312	340
22	7	37	68	98	129	160	190	221	251	282	313	341
23	8	38	69	99	130	161	191	222	252	283	314	342
24	9	39	70	100	131	162	192	223	253	284	315	343
25	10	40	71	101	132	163	193	224	254	285	316	344
26	11	41	72	102	133	164	194	225	255	286	317	345
27	12	42	73	103	134	165	195	226	256	287	318	346
28	13	43	74	104	135	166	196	227	257	288	319	347
29	14	44	75	105	136	167	197	228	258	289		348
30	15	45	76	106	137	168	198	229	259	290		349
31		46		107	138		199		260	291		350

Chapter 4Underpayment Penalty for 2018Page 51

Annualized Income

Installment Method

(Schedule AI)

If you didn’t receive your income evenly throughout the year (for example, your income from a shop you operated at a marina was much larger in the summer than it was during the rest of the year), you may be able to lower or eliminate your penalty by figuring your under-payment using the annualized income install-ment method. Under this method, your required installment (Part IV, line 18) for one or more payment periods may be less than one-fourth of your required annual payment.

To figure your underpayment using this method, complete Form 2210, Schedule AI. Schedule AI annualizes your tax at the end of each payment period based on your income, deductions, and other items relating to events that occurred from the beginning of the tax year through the end of the period.

If you use the annualized income installment method, you must check box C in Part II of Form 2210. Also, you must attach Form 2210 and Schedule AI to your return.

If you use Schedule AI for any payment

due date, you must use it for all pay-CAUTION ment due dates.

Completing Schedule AI. Follow the Instruc-tions for Form 2210 to complete Schedule AI. For each period shown on Schedule AI, figure your income and deductions based on your method of accounting. If you use the cash method of accounting (used by most people), include all income actually or constructively re-ceived during the period and all deductions ac-tually paid during the period.

Note. Each period includes amounts from the previous period(s).

Period (a) includes items for January 1 through March 31.

Period (b) includes items for January 1 through May 31.

Period (c) includes items for January 1 through August 31.

Period (d) includes items for the entire year.

Farmers and Fishermen

If you are a farmer or fisherman, the following special rules for underpayment of estimated tax apply to you.

1. The penalty for underpaying your 2018 es-timated tax won’t apply if you file your re-turn and pay all the tax due by March 1, 2019. If you are a fiscal year taxpayer, the penalty won’t apply if you file your return and pay the tax due by the first day of the third month after the end of your tax year.

2. Any penalty you owe for underpaying your 2018 estimated tax will be figured from one payment due date, January 15, 2019.

3. The underpayment penalty for 2018 is fig-ured on the difference between the amount of 2018 withholding plus estima-ted tax paid by the due date and the smaller of:

a. 662/3% (rather than 90%) of your 2018 tax, or

b. 100% of the tax shown on your 2017 return.

Even if these special rules apply to you, you won’t owe the penalty if you meet either of the two conditions discussed under Exceptions, earlier.

See Who Must Pay Estimated Tax inchap-ter 2 for the definition of a farmer or fisherman who is eligible for these special rules.

Form 2210-F. Use Form 2210-F to figure any underpayment penalty. Don’t attach it to your return unless you check a box in Part I. How-ever, if none of the boxes apply to you and you owe a penalty, you don’t need to attach Form 2210-F. Enter the amount from line 16 on Form 1040, line 23, and add the penalty to any bal-ance due on your return or subtract it from your refund. Keep your filled-in Form 2210-F for your records.

If none of the boxes on Form 2210-F TIP apply to you and you owe a penalty, the IRS can figure your penalty and

send you a bill.

Waiver of Penalty

The IRS can waive the penalty for underpay-ment if any of the following applies.

1. You didn’t make a payment because of a casualty, disaster, or other unusual cir-cumstance and it would be inequitable to impose the penalty.

2. You retired (after reaching age 62) or be-came disabled in 2017 or 2018 and both the following requirements are met.

a. You had a reasonable cause for not making the payment.

b. Your underpayment was not due to willful neglect.

3. The underpayment was due to an inability to accurately calculate your estimated in-come tax payment due to changes enac-ted by tax reform. See the "85% Exception Worksheet" in the Instructions for Form 2210.

How to request a waiver. To request a waiver, see the Instructions for Form 2210.

Farmers and fishermen. To request a waiver, see the Instructions for Form 2210-F.

Federally declared disaster. Certain estima-ted tax payment deadlines for taxpayers who reside or have a business in a federally de-clared disaster area are postponed for a period during and after the disaster. During the pro-cessing of your tax return, the IRS automatically identifies taxpayers located in a covered disas-ter area (by county or parish) and applies the appropriate penalty relief. Don’t file Form 2210 or 2210-F if your underpayment was due to a federally declared disaster. If you still owe a penalty after the automatic waiver is applied, we will send you a bill.

Individuals, estates, and trusts not in a cov-ered disaster area but whose books, records, or tax professionals' offices are in a covered area are also entitled to relief. Also eligible are relief workers affiliated with a recognized government or charitable organization assisting in the relief activities in a covered disaster area. If you meet either of these eligibility requirements, you must call the IRS disaster hotline at 866-562-5227 and identify yourself as eligible for this relief.

Details on the applicable disaster postpone-ment period can be found at IRS.gov. Go to Tax Relief in Disaster Situations. Select the federally declared disaster that affected you.

Page 52Chapter 4Underpayment Penalty for 2018

Worksheet 4-1. 2018 Form 2210, Schedule AI—Line 14	Keep for Your Records
Qualified Dividends and Capital Gain Tax Worksheet

Note. To figure the annualized entries for lines 2, 3, and 5 below, multiply the expected amount for the period by the annualization amount on line 2 of Schedule AI for the same period.

1.	Enter line 13 of your Schedule AI, or line 3 from Worksheet 4-2 . . . . . . . . .		1.
2.	Enter your annualized qualified dividends for the	2.
	period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3. Are you filing Schedule D?

Yes. Enter the smaller of your annualized
amount from line 15 or line 16 of
Schedule D. If either line 15 or line 16 is	3.
blank or a loss, enter -0-.

No. Enter your annualized capital gain

distributions from Schedule 1 (Form 1040),

line 13.

4. Add lines 2 and 3 . . . . . . . . . . . . . . . . . . . . .

5. If you are claiming investment interest expense on Form 4952, enter your annualized amount from line 4g of that form. Otherwise, enter -0- . . . . . . . . . . . . . . . . . . .

4.

5.

6.	Subtract line 5 from line 4. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . .		6.
7.	. . . . . . . . . . . . . . . . . . . .Subtractline6fromline1.Ifzeroorless,enter-0-		7.
8.	Enter:
	•	$38,600 if single or married filing separately,	8.
	•	$77,200 if married filing jointly or qualifying widow(er),
		or

	• $51,700 if head of household.
9.	Enter the smaller of line 1 or line 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		9.
10.	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Enterthesmallerofline7orline9		10.
11.	. . . . . . . . . . . . . . . .Subtractline10fromline9.Thisamountistaxedat0%		11.
12.	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Enterthesmallerofline1orline6		12.
13.	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Entertheamountfromline11		13.
14.	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Subtractline13fromline12		14.
15.	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Multiplyline14by15%(0.15)		....15..............

16. Figure the tax on the amount on line 7. If the amount on line 7 is less than $100,000, use the Tax Table in the 2018 Instructions for Form 1040 to figure this tax. If the amount on line 7 is $100,000 or

more, use the Tax Computation Worksheet in the 2018 Instructions for Form 1040 . . . . . . . . . . . . . .	16.
17. Add lines 15 and 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17.

18. Figure the tax on the amount on line 1. If the amount on line 1 is less than $100,000, use the Tax Table in the 2018 Instructions for Form 1040 to figure this tax. If the amount on line 1 is $100,000 or

more, use the Tax Computation Worksheet in the 2018 Instructions for Form 1040 . . . . . . . . . . . . . .

18.

19. Tax on all taxable income. Enter the smaller of line 17 or line 18. Also enter this amount on

line 14 of Schedule AI in the appropriate column. However, if you are using this worksheet to figure the tax on the amount on line 3 of Worksheet 4-2, enter the amount from line 19 on Worksheet 4-2,

line 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19.

Chapter 4Underpayment Penalty for 2018Page 53

Worksheet 4-2. 2018 Form 2210, Schedule AI—Line 14		Keep for Your Records
	Foreign Earned Income Tax Worksheet
*Before you begin:* If Schedule AI, line 13, is zero for the period, don’t complete this worksheet.
1.	Enter the amount from line 13 of Schedule AI for the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	.........	1.
2.	Enter the annualized amount* of foreign earned income and housing amount excluded or deducted (from
	Form 2555, lines 45 and 50, or Form 2555-EZ, line 18) in figuring the amount entered for the period on line 1
	of Schedule AI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	.........	2.
3.	Add lines 1 and 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	.........	3.
4.	Tax on the amount on line 3. Use the Tax Table, Tax Computation Worksheet, Form 8615,** Qualified
	Dividends and Capital Gain Tax Worksheet,* or Schedule D Tax Worksheet,* whichever applies. See the
	2018 instructions for Form 1040, line 11a, to find out which tax computation method to use. (Note. You don’t
	have to use the same method for each period on Schedule AI.) . . . . . . . . . . . . . . . . . . . . . . . . . . . .	.........	4.
5.	Tax on the amount on line 2. If the amount on line 2 is less than $100,000, use the Tax Table in the 2018
	Instructions for Form 1040 to figure this tax. If the amount on line 7 is $100,000 or more, use the Tax
	Computation Worksheet in the 2018 Instructions for Form 1040 . . . . . . . . . . . . . . . . . . . . . . . . . . . .	.........	5.
6.	Subtract line 5 from line 4. Enter the result here and on line 14 of Schedule AI. If zero or less,
	enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	.........	6.

To figure the annualized amount for line 2, multiply the exclusion or deduction for the period by the annualization amount on line 2 of Schedule AI for the same period.

If you use Form 8615 to figure the tax on line 4 above, enter the amount from line 3 above on line 4 of Form 8615. If the child's parent files Form 2555 or 2555-EZ, enter the amounts from lines 3 and 4 of the parent's Foreign Earned Income Tax Worksheet on lines 6 and 10, respectively, of Form 8615. Complete the rest of Form 8615 according to its instructions. Then complete lines 5 and 6 above.

Enter the amount from line 3 above on line 1 of the Qualified Dividends and Capital Gain Tax Worksheet (or Worksheet 4-1 in this chapter) or the Schedule D Tax Worksheet, whichever worksheet you use to figure the tax on line 4 above. Complete that worksheet through line 6 (line 10 if you use the Schedule D Tax Worksheet). Next, determine if you have a capital gain excess.

Figuring capital gain excess. To find out if you have a capital gain excess for the appropriate period, subtract line 13 of Schedule AI from line 6 of Worksheet 4-1 or your Qualified Dividends and Capital Gain Tax Worksheet (line 10 of your Schedule D Tax Worksheet). If the result is more than zero, that amount is your capital gain excess.

No capital gain excess. If you don’t have a capital gain excess, complete the rest of Worksheet 4-1, Qualified Dividends and Capital Gain Tax Worksheet, or the Schedule D Tax Worksheet according to the worksheet's instructions. Then complete lines 5 and 6 above.

Capital gain excess. If you have a capital gain excess, complete a second Worksheet 4-1, Qualified Dividends and Capital Gain Tax Worksheet, or Schedule D Tax Worksheet (whichever applies) as instructed above but in its entirety and with the following additional modifications. Then complete lines 5 and 6 above.

Make the modifications below only for purposes of filling out Worksheet 4-2 above.

a. Reduce (but not below zero) the amount you otherwise would enter on line 3 of your Worksheet 4-1, line 3, of your Qualified Dividends and Capital Gain Tax Worksheet, or line 9 of your Schedule D Tax Worksheet by your capital gain excess.

b. Reduce (but not below zero) the amount you otherwise would enter on line 2 of your Worksheet 4-1, line 2, of your Qualified Dividends and Capital Gain Tax Worksheet, or line 6 of your Schedule D Tax Worksheet by any of your capital gain excess not used in (a) above.

c. Reduce (but not below zero) the amount on your Schedule D (Form 1040), line 18, by your capital gain excess.

d. Include your capital gain excess as a loss on line 16 of your Unrecaptured Section 1250 Gain Worksheet in the 2018 Instructions for Schedule D (Form 1040).

Page 54Publication 505 (2019)

How To Get Tax Help

If you have questions about a tax issue, need help preparing your tax return, or want to down-load free publications, forms, or instructions, go to IRS.gov and find resources that can help you right away.

Tax reform. Major tax reform legislation im-pacting individuals, businesses, and tax-ex-empt entities was enacted in the Tax Cuts and Jobs Act on December 22, 2017. Go to IRS.gov/TaxReform for information and up-dates on how this legislation affects your taxes.

Preparing and filing your tax return. Find free options to prepare and file your return on IRS.gov or in your local community if you qual-ify.

The Volunteer Income Tax Assistance (VITA) program offers free tax help to people who generally make $55,000 or less, persons with disabilities, and limited-English-speaking taxpayers who need help preparing their own tax returns. The Tax Counseling for the Elderly (TCE) program offers free tax help for all tax-payers, particularly those who are 60 years of age and older. TCE volunteers specialize in an-swering questions about pensions and retire-ment-related issues unique to seniors.

You can go to IRS.gov to see your options for preparing and filing your return which in-clude the following.

Free File. Go to IRS.gov/FreeFile to see if you qualify to use brand-name software to prepare and e-file your federal tax return for free.

VITA. Go to IRS.gov/VITA, download the free IRS2Go app, or call 800-906-9887 to find the nearest VITA location for free tax return preparation.

TCE. Go to IRS.gov/TCE, download the free IRS2Go app, or call 888-227-7669 to find the nearest TCE location for free tax return preparation.

Getting answers to your tax ques-tions. On IRS.gov, get answers to your tax questions anytime, anywhere.

Go to IRS.gov/Help for a variety of tools that will help you get answers to some of the most common tax questions.

Go to IRS.gov/ITA for the Interactive Tax Assistant, a tool that will ask you questions on a number of tax law topics and provide answers. You can print the entire interview and the final response for your records.

Go to IRS.gov/Pub17 to get Pub. 17, Your Federal Income Tax for Individuals, which features details on tax-saving opportuni-ties, 2018 tax changes, and thousands of interactive links to help you find answers to your questions. View it online in HTML, as a PDF, or download it to your mobile de-vice as an eBook.

You may also be able to access tax law in-formation in your electronic filing software.

Getting tax forms and publications. Go to IRS.gov/Forms to view, download, or print all of the forms and publications you may need. You

Publication 505 (2019)

can also download and view popular tax publi-cations and instructions (including the 1040 in-structions) on mobile devices as an eBook at no charge. Or you can go to IRS.gov/OrderForms to place an order and have forms mailed to you within 10 business days.

Access your online account (individual tax-payers only). Go to IRS.gov/Account to se-curely access information about your federal tax account.

View the amount you owe, pay online, or set up an online payment agreement.

Access your tax records online.

Review the past 24 months of your pay-ment history.

Go to IRS.gov/SecureAccess to review the required identity authentication process.

Using direct deposit. The fastest way to re-ceive a tax refund is to combine direct deposit and IRS e-file. Direct deposit securely and elec-tronically transfers your refund directly into your financial account. Eight in 10 taxpayers use di-rect deposit to receive their refund. The IRS is-sues more than 90% of refunds in less than 21 days.

Refund timing for returns claiming certain credits. The IRS can’t issue refunds before mid-February 2019 for returns that claimed the earned income credit (EIC) or the additional child tax credit (ACTC). This applies to the en-tire refund, not just the portion associated with these credits.

Getting a transcript or copy of a return. The quickest way to get a copy of your tax transcript is to go to IRS.gov/Transcripts. Click on either "Get Transcript Online" or "Get Transcript by Mail" to order a copy of your transcript. If you prefer, you can:

Order your transcript by calling 800-908-9946, or

Mail Form 4506-T or Form 4506T-EZ (both available on IRS.gov).

Using online tools to help prepare your re-turn. Go to IRS.gov/Tools for the following.

The Earned Income Tax Credit Assistant (IRS.gov/EITCAssistant) determines if you’re eligible for the EIC.

The Online EIN Application (IRS.gov/EIN) helps you get an employer identification number.

The IRS Withholding Calculator (IRS.gov/ W4App) estimates the amount you should have withheld from your paycheck for fed-eral income tax purposes and can help you perform a “paycheck checkup.”

The First Time Homebuyer Credit Account Look-up (IRS.gov/HomeBuyer) tool pro-vides information on your repayments and account balance.

The Sales Tax Deduction Calculator

(IRS.gov/SalesTax) figures the amount you can claim if you itemize deductions on Schedule A (Form 1040), choose not to claim state and local income taxes, and you didn’t save your receipts showing the sales tax you paid.

Resolving tax-related identity theft issues.

The IRS doesn’t initiate contact with tax-payers by email or telephone to request personal or financial information. This in-cludes any type of electronic communica-tion, such as text messages and social me-dia channels.

Go to IRS.gov/IDProtection for information.

If your SSN has been lost or stolen or you suspect you’re a victim of tax-related iden-tity theft, visit IRS.gov/IdentityTheft to learn what steps you should take.

Checking on the status of your refund.

Go to IRS.gov/Refunds.

The IRS can’t issue refunds before mid-February 2019 for returns that claimed the EIC or the ACTC. This applies to the entire refund, not just the portion associ-ated with these credits.

Download the official IRS2Go app to your mobile device to check your refund status.

Call the automated refund hotline at 800-829-1954.

Making a tax payment. The IRS uses the lat-est encryption technology to ensure your elec-tronic payments are safe and secure. You can make electronic payments online, by phone, and from a mobile device using the IRS2Go app. Paying electronically is quick, easy, and faster than mailing in a check or money order. Go to IRS.gov/Payments to make a payment using any of the following options.

IRS Direct Pay: Pay your individual tax bill or estimated tax payment directly from your checking or savings account at no cost to you.

Debit or credit card: Choose an ap-proved payment processor to pay online, by phone, and by mobile device.

Electronic Funds Withdrawal: Offered only when filing your federal taxes using tax return preparation software or through a tax professional.

Electronic Federal Tax Payment Sys-tem: Best option for businesses. Enroll-ment is required.

Check or money order: Mail your pay-ment to the address listed on the notice or instructions.

Cash: You may be able to pay your taxes with cash at a participating retail store.

What if I can’t pay now? Go to IRS.gov/ Payments for more information about your op-tions.

Apply for an online payment agreement

(IRS.gov/OPA) to meet your tax obligation in monthly installments if you can’t pay your taxes in full today. Once you complete the online process, you will receive imme-diate notification of whether your agree-ment has been approved.

Use the Offer in Compromise Pre-Qualifier (IRS.gov/OIC) to see if you can settle your tax debt for less than the full amount you owe.

Checking the status of an amended return. Go to IRS.gov/WMAR to track the status of Form 1040X amended returns. Please note that it can take up to 3 weeks from the date you mailed your amended return for it to show up in

Page 55

our system and processing it can take up to 16 weeks.

Understanding an IRS notice or letter. Go to IRS.gov/Notices to find additional information about responding to an IRS notice or letter.

Contacting your local IRS office. Keep in mind, many questions can be answered on IRS.gov without visiting an IRS Tax Assistance Center (TAC). Go to IRS.gov/LetUsHelp for the topics people ask about most. If you still need help, IRS TACs provide tax help when a tax is-sue can’t be handled online or by phone. All TACs now provide service by appointment so you’ll know in advance that you can get the service you need without long wait times. Be-fore you visit, go to IRS.gov/TACLocator to find the nearest TAC, check hours, available serv-ices, and appointment options. Or, on the IRS2Go app, under the Stay Connected tab, choose the Contact Us option and click on “Lo-cal Offices.”

Watching IRS videos. The IRS Video portal (IRSVideos.gov) contains video and audio pre-sentations for individuals, small businesses, and tax professionals.

Getting tax information in other languages. For taxpayers whose native language isn’t Eng-lish, we have the following resources available. Taxpayers can find information on IRS.gov in the following languages.

Spanish (IRS.gov/Spanish).

Chinese (IRS.gov/Chinese).

Vietnamese (IRS.gov/Vietnamese).

Korean (IRS.gov/Korean).

Russian (IRS.gov/Russian).

The IRS TACs provide over-the-phone inter-preter service in over 170 languages, and the service is available free to taxpayers.

The Taxpayer Advocate Service (TAS) Is Here To Help You

What is TAS?

TAS is an independent organization within the IRS that helps taxpayers and protects taxpayer rights. Their job is to ensure that every taxpayer is treated fairly and that you know and under-stand your rights under the Taxpayer Bill of Rights.

How Can You Learn About Your Taxpayer Rights?

The Taxpayer Bill of Rights describes 10 basic rights that all taxpayers have when dealing with the IRS. Go to TaxpayerAdvocate.IRS.gov to help you understand what these rights mean to you and how they apply. These are your rights. Know them. Use them.

What Can TAS Do For You?

TAS can help you resolve problems that you can’t resolve with the IRS. And their service is free. If you qualify for their assistance, you will be assigned to one advocate who will work with you throughout the process and will do everything possible to resolve your issue. TAS can help you if:

Your problem is causing financial difficulty for you, your family, or your business;

You face (or your business is facing) an immediate threat of adverse action; or

You’ve tried repeatedly to contact the IRS but no one has responded, or the IRS hasn’t responded by the date promised.

How Can You Reach TAS?

TAS has offices in every state, the District of Columbia, and Puerto Rico. Your local advo-cate’s number is in your local directory and at TaxpayerAdvocate.IRS.gov/Contact-Us. You can also call them at 877-777-4778.

How Else Does TAS Help Taxpayers?

TAS works to resolve large-scale problems that affect many taxpayers. If you know of one of these broad issues, please report it to them at IRS.gov/SAMS.

TAS also has a website, Tax Reform Changes, which shows you how the new tax law may change your future tax filings and helps you plan for these changes. The information is categorized by tax topic in the order of the IRS Form 1040. Go to TaxChanges.us for more in-formation.

Low Income Taxpayer Clinics (LITCs)

LITCs are independent from the IRS. LITCs represent individuals whose income is below a certain level and need to resolve tax problems with the IRS, such as audits, appeals, and tax collection disputes. In addition, clinics can pro-vide information about taxpayer rights and re-sponsibilities in different languages for individu-als who speak English as a second language. Services are offered for free or a small fee. To

find a clinic near you, visit TaxpayerAdvocate.IRS.gov/LITCmap or see IRS Pub. 4134, Low Income Taxpayer Clinic List.

	To help us develop a more useful index, please let us know if you have ideas for index entries.

Index
	See “Comments and Suggestions” in the “Introduction” for the ways you can reach us.

A

Additional Medicare Tax 24, 28 Address change 30 Adjustments to income:

Estimated tax 23

Withholding allowances 7

Worksheet instructions 7, 8

AGI:

Expected AGI 23

Alaska Native Corporations 13

Aliens:

Nonresident aliens 23 Amended returns 43, 47

Annualized estimated tax worksheets 39, 40 Annualized - Capital gains 41 Annualized - Foreign Earned

Income 42 Annualized - Qualified

dividends 41

Annualized income installment method 28

Capital gains worksheet, underpayment penalty 53

Form 2210, Schedule AI 52 Page 56

Qualified dividends worksheet, underpayment penalty 53

Underpayment penalty, (Schedule AI) 52

Annuities 12 Assistance (See Tax help)

B

Backup withholding 13 , 14 Credit against income tax 44

C

Capital gains and losses:

Annualized estimated tax 28

Estimated tax on net capital

gain 23

Qualified dividends 28

Casualty and theft losses 7 Waiver of penalty 52

Change of address 30

Change of name 44

Charitable contributions 7

Child tax credit:

Crop insurance payments

13

Personal Allowances Worksheet

Cumulative wage method of

(Form W-4) 7

withholding

8

Commodity credit

corporation

loans 13

D

Community

property states 43

Compensation 3

Deductions:

Independent

contractors, backup

Home mortgage interest

7

withholding 13

9

Worksheet instructions

7

Disaster:

Supplemental wages

Tips 11

Waiver of penalty 52

Wages

and salaries

3

Dividends:

Crediting of overpayment

29

Backup withholding

13

Credits:

Underreported 14

2018 withholding and estimated

Divorced taxpayers:

45

taxes 43

Estimated tax credit

Estimated

Form W-4 6

tax against income

tax 44

Domestic help

3

Excess

withholding on social

Definition 3

security or railroad retirement

Withholding

3

taxes 45

Expected

taxes and credits 23

E

Withholding tax, credit for 43

Criminal penalties:

Earned income credit (EIC)

2

Willfully false or fraudulent Form

Eligible rollover distributions

12

W-4 10

Publication 505 (2019)

Employee business expenses: Accountable plans 9 Nonaccountable plans 10 Reimbursements 9

Employer Identification Numbers

(EINs) 14

Employers:

Excess withholding on social security and railroad retirement taxes 45

Repaying withheld tax 8

Tips 11

Withholding rules 8

Estate beneficiaries:

Underpayment penalty 47

Estates:

Estimated tax 23

Estimated tax:

Adjustments to income 23

Aliens 23, 29

Amended tax 26

Annualized income installment

method 28

Change in amount 26

Change of address 30

Change of name 44

Credit against income tax 44

Crediting of overpayment 29

Divorced taxpayers 45

Estates and trusts 23

Expected AGI 23

Expected taxable income 23

Expected taxes and credits 23

Farmers and fishermen 22, 24,

25

Fiscal year taxpayers 25

Higher income individuals 24

How to figure 23, 26

How to pay 29

Instructions for Worksheet 2-7, annualized estimated tax 28

Itemized deductions 23 Married taxpayers 22 Net capital gain 23, 28 Nonresident aliens 29 No standard deduction 23 Overpayment 29 Payments not required 29 Payment vouchers 30 Regular installment method 26 Required annual payment 24 Self-employment income 28 Separate returns 44 Sick pay 11

Standard deduction 23, 28 Total estimated tax

payments 25

Types of taxes included 21

Underpayment penalty 26, 47

When to pay 25

When to start payments 25

Who does not have to pay 21

Who must pay 21

Estimated tax worksheets 31, 33, 34

2019 annualized estimated tax worksheet 39

Amended estimated tax, illustrated (Worksheet 2-10) 27

Capital gains 37 Capital gains, tax on 23 Foreign earned income 38 Form 1040-ES 33

Publication 505 (2019)

Qualified dividends 37

Railroad retirement benefits 34

Self-employment tax 35

Social security benefits 34

Standard deduction 36

Excess social security or railroad retirement tax withholding 45 Nonrailroad employees

worksheet 45 Railroad employees worksheets 45

Exemption from withholding 9 Claiming 9

Good for only one year 9 Itemized deductions 9 Students 9

Exemptions:

Personal Allowances

Worksheet 6

Self 6

Withholding allowances 6

Expenses:

Allowances 9

F

Farmers:

Estimated tax 22, 24, 25

Fiscal years 26

Gross income 22

Joint returns 22

Required annual payment 24

Underpayment penalty 47, 52

Waiver of underpayment

penalty 52

Withholding for farmworkers 3

Figures:

Tables and figures (See Tables and figures)

Fiscal years:

Estimated tax 25

Farmers and fishermen 26

Withholding tax credit 44

Fishermen:

Estimated tax 22, 24, 25

Fiscal years 26

Gross income 22

Joint returns 22

Required annual payment 24

Underpayment penalty 47, 52

Waiver of underpayment

penalty 52

Foreign earned income or housing 54

Form 1040-ES 21, 29

Form 1040-ES (NR) 23

Form 1040X 43

Form 1041-ES 23

Form 1099 series 13, 43

Form 2210 48, 49

Form 2210-F 52

Form W-2 43 Form W-2c 43 Form W-2G 13, 43

Form W-4, Employee's Allowance Withholding Certificate 3

Form W-4P 12

Form W-4S 11

Form W-4V 13

Form W-4 worksheets 6 Completing of 6 Deductions, adjustments, and

additional income

worksheet 7

IRS withholding calculator 8 Number of allowances

claimed 7

Two-Earners/Multiple Jobs

Worksheet 8 Withholding allowances 6

Form W-7 14

Form W-9 14

Fraud:

Form W-4 statements 10 Fringe benefits 11

G

Gambling:

Form W-2G 43

Losses 43

Winnings 43

Gross income 22

Farming 22

Fishing 22

H

Higher income individuals:

Required annual payment 24

Underpayment penalty 47

Household workers 3

I

Identity theft 55

Individual retirement arrangements (IRAs) 12

(See also Pensions)

(See also Retirement plans)

Interest income:

Backup withholding 13 Underreported 14

IRS withholding calculator 8

Itemized deductions:

Deductions, Adjustments, and

Additional Income

Worksheet 7

Estimated tax, expected taxable income 23

Exemption from withholding 9 Gambling losses 43

J

Joint returns:

Excess withholding on social security and railroad retirement taxes 45 Farmers and fishermen 22 Underpayment penalty 47

M

Marital status:

Form W-4 worksheet 6 Withholding rate 6

Married taxpayers 45 (See also Joint returns) Estimated tax 22

Marital status 6

Withholding allowances 6

Medical and dental expenses 7 Military retirement pay 3, 12

Missing children, photographs of 2

Multiple jobs:

Excess social security and railroad retirement withholding 45

Withholding allowances 6

N

Name change 44

Net investment income tax 24, 29

NIIT 24, 29

Noncitizens:

Estimated tax 23

Withholding 6

Nonqualified deferred compensation 12

Nonresident aliens:

Estimated tax 23, 29

Individual taxpayer identification

numbers (ITINs) 14

O

Overpayment:

Crediting to estimated tax 29

P

Part-year method of withholding 8

Patronage dividends:

Backup withholding 13

Payment vouchers 30

Penalties:

Backup withholding 14 Underpayment of estimated

tax 47

Waiver of underpayment penalty 52

Willfully false or fraudulent Form W-4 10

Withholding allowances 10 Pensions 12

New job 3

Rollovers 12

Wages and salaries withholding rules compared 12

Personal Allowances

Worksheet 6, 7 Publications (See Tax help)

R

Railroad retirement benefits:

Choosing to withhold 13

Railroad retirement tax:

Excess withholding 45

Refund claims (tier 2) 45

Regular installment method, estimated tax 26

Reimbursements 9 Excess 9

Reporting:

Fringe benefits 11

Gambling winnings 13

Tips to employer 11

Required annual payment 24

Retirement plans: Pension plans 12 Pensions 12 Rollovers 12

Rollovers 12

Page 57

Royalties:

Backup withholding 13

S

Salaries 3

Saturday, Sunday, holiday rule 25

Self-employment tax 28

Separate returns:

Estimated tax credit 44

Underpayment penalty 47

Withholding tax credit 43

Sick pay 11

Single marital status 6

Social security benefits:

Choosing to withhold 13

Social security taxes:

Excess withholding 45

Worksheet 3-1 45 Taxpayer identification numbers

(TINs) 14

Withholding obligation 2

Spouse 6

(See also Married taxpayers)

Marital status 6

Standard deduction 23, 28

State and local income taxes and property taxes 7

Students 9

Supplemental wages 9, 10

T

Tables and figures:

Calendar to determine number of days payment is late (Table 4-1) 51

Do you have to pay estimated tax? (Figure 2-A) 21

Due dates, estimated tax (Table 2-1) 25

Exemption from withholding on Form W-4 (Figure 1-A) 10 Railroad retirement, maximum withholding (Table 3-2) 45

Social security, maximum withholding (Table 3-2) 45

Worksheets, where to find 31 Tax help 55

Taxpayer identification numbers (TINs) 14

Tax Rate Schedules 32

Tips 11

Total income 23

Trust beneficiaries:

Underpayment penalty 47

Two-Earners/Multiple Jobs Worksheet 8

U

Underpayment penalty 47, 49

Actual withholding method 49

Amended estimated tax 26

Amended returns 47

Annualized income installment

method 52

Beneficiaries of estates and

trusts 47

Capital gains (Worksheet

4-1) 53

Exceptions 48

Farmers and fishermen 47, 52 Figuring 47, 49

Higher income individuals 47 Joint returns 47

Lowering or eliminating 48 Minimum required each

period 47

No penalty 47

No tax liability last year exception 48

Paid through withholding 48, 49 Penalty figured for each

period 47

Penalty thresholds 47

Qualified dividends (Worksheet

4-1) 53

Required annual payment 49 Schedule AI 52 Separate returns 47

Waiver 52

When charged 47

Unemployment compensation 13

W

Wages and salaries 3 Waiver of penalty 52 Withholding:

Allowances 6, 7

Personal Allowances

Worksheet 6

Amended returns 43

Amount of tax withheld, Form

Unemployment

W-4 3

compensation 13

Annuities

12

Worksheet for Form

2210, Part

Backup

13

IV, Section B-Figure the

withholding

Changing

3

Penalty:

Checking

3

Penalty Worksheet

49

amount of

Choosing not to withhold

12

Worksheets (blank):

Community property states

43

Annualized - Capital gains

Credit against income tax

43

(Worksheet 2-8) 41

Cumulative wage method

Annualized estimated

8

tax

Deductions, Adjustments,

(Worksheet 2-7) 39, 40

and

Additional Income

Annualized - Foreign

Earned

Worksheet 7

6

Income (Worksheet 2-9) 42

Divorced taxpayers

Annualized - Qualified dividends

Domestic help 3

(Worksheet 2-8) 41

Employers' rules

8

Capital gains tax worksheet:

Estimated tax 25

Worksheet 2-5

37

Excess social

Worksheet 4-1

security and

53

railroad retirement taxes 45

Dependents (age 65 or older or

Exemption from 9

blind) exemption from

Farmworkers

3

withholding (Worksheet

Fiscal years

1-2) 15

44

Form received

after filing

43

Estimated

tax worksheets

Form W-2

43

(Worksheet 2-1) 33

Form W-2c

Excess social security

43

and tier 1

Form W-2G

13

, 43

railroad retirement tax

Form W-4

3

(Worksheet 3-2) 46

Excess social security

Fringe benefits 11

tax,

12, 13, 43

nonrailroad employees

Gambling winnings

Getting right amount

(Worksheet 3-1) 45

of

tax

withheld

8

Excess tier 2 railroad

retirement

Household

workers

3

tax (Worksheet 3-3) 46

Marital status 6

Foreign earned income

6

(Worksheet 2-6) 38

Married taxpayers

Multiple jobs

6

or

Foreign earned income

Noncitizens

housing tax worksheet:

6

Nonperiodic

payments 12

Worksheet 4-2

Part-year method

8

(annualized)

54

Penalties

10

Qualified dividends:

Pensions

12

Worksheet 2-5

37

Periodic

12

Worksheet 4-1

payments

53

Railroad retirement

benefits 13

Railroad retirement

benefits

Repaying withheld tax 8

(Worksheet 2-2) 34

Rollovers

12

Self-employment tax

and

wages

3

deduction (Worksheet

Salaries and

Separate returns

43

2-3) 35

Sick pay 11

Social security benefits

6

(Worksheet 2-2) 34

Single taxpayers

2, 13

Standard deduction

Social security (FICA) tax

(Worksheet

Tips 11

2-4) 36

Types

of

income

2, 3

Worksheets

(illustrated):

Amended estimated tax

Underpayment penalty 48, 49

(Worksheet 2-10) 27

Page 58Publication 505 (2019)

IRS Releases Publication 505 (2019), Tax Withholding and Estimated Tax