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Publication 505 - Introductory MaterialIntroductionThe federal income tax is a pay-as-you-go tax. You must pay the tax as you earn or receive income during the year. There are two ways to pay as you go.
This publication explains both of these methods. 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 estimated tax payments, you may have to pay a penalty. Generally, the IRS can figure this penalty for you. Nonresident aliens. Before completing Form W-4, Employee's Withholding Certificate, nonresident alien employees should see Notice 1392, Supplemental Form W-4 Instructions for Nonresident Aliens (Rev. January 2020), which provides nonresident aliens who are not exempt from withholding instructions for completing Form W-4, and the Instructions for Form 8233, Exemption From Withholding on Compensation for Independent (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. Final regulations on income tax withholding. Final regulations on income tax withholding were published in the Federal Register on October 6, 2020 (at 85 FR 63019). The regulations implement changes made by the Tax Cuts and Jobs Act and reflect the redesigned withholding certificate (Form W-4). See the regulations for detailed information on income tax withholding. Comments and suggestions. We welcome your comments about this publication and suggestions for future editions. You can send us comments through IRS.gov/FormComments. Or, you can write to the Internal Revenue Service, Tax Forms and Publications, 1111 Constitution Ave. NW, IR-6526, Washington, DC 20224. Although we can’t respond individually to each comment received, we do appreciate your feedback and will consider your comments and suggestions as we revise our tax forms, instructions, and publications. Don’t send tax questions, tax returns, or payments to the above address. Getting answers to your tax questions. If you have a tax question not answered by this publication or the How To Get Tax Help section at the end of this publication, go to the IRS Interactive Tax Assistant page at IRS.gov/Help/ITA where you can find topics by using the search feature or viewing the categories listed. Getting tax forms, instructions, and publications. Go to IRS.gov/Forms to download current and prior-year forms, instructions, and publications. Ordering tax forms, instructions, and publications. Go to IRS.gov/OrderForms to order current forms, instructions, and publications; call 800-829-3676 to order prior-year forms and instructions. The IRS will process your order for forms and publications as soon as possible. Don’t resubmit requests you’ve already sent us. You can get forms and publications faster online. What's New for 2022Use your 2021 tax return as a guide in figuring your 2022 estimated tax, but be sure to consider the following. Redesigned Form W-4P and new Form W-4R. Form W-4P, Withholding Certificate for Periodic Pension or Annuity Payments (previously titled Withholding Certificate for Pension or Annuity Payments), has been redesigned for 2022. The new Form W-4P is now used only to request withholding on periodic pension or annuity payments. Previously, Form W-4P was also used to request additional withholding on nonperiodic payments and eligible rollover distributions. Starting in 2022, additional withholding on nonperiodic payments and eligible rollover distributions is requested on new Form W-4R, Withholding Certificate for Nonperiodic Payments and Eligible Rollover Distributions. Although the final redesigned Form W-4P and new Form W-4R are available for use in 2022, the IRS is postponing the requirement to begin using the forms until January 1, 2023. Therefore, the payer of your periodic pension or annuity payments or nonperiodic payments and eligible rollover distributions may send you a 2021 Form W-4P or Form W-4R this year. Standard deduction amount increased. For 2022, the standard deduction amount has been increased for all filers, and the amounts are as follows.
Retirement savings contribution credit income limits increased. In order to claim this credit for 2022, your MAGI must not be more than $34,000 ($68,000 if married filing jointly; $51,000 if head of household). Adoption credit or exclusion. The maximum adoption credit or exclusion for employer-provided adoption benefits has increased to $14,890. In order to claim either the credit or exclusion, your MAGI must be less than $263,410. RemindersFuture developments. The IRS has created a page on IRS.gov for information about Pub. 505 at IRS.gov/Pub505. Information about any future developments affecting Pub. 505 (such as legislation enacted after we release it) will be posted on that page. 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 $147,000 in 2022. 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 renew it. For more information, see the Instructions for Form W-7. Advance payments of the premium tax credit. If you buy health insurance through the Health Insurance Marketplace, you may be eligible to have advance payments of the premium tax credit paid on your behalf to the insurance 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 compensation, 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 separately. You may need to include this amount when figuring your estimated tax. You may also 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 married filing jointly or qualifying widow(er); $125,000 if married filing separately). NIIT may need to be included when figuring estimated tax. You may also request that your employer deduct and withhold an additional amount of income tax withholding from your wages on Form W-4. Access your online account (Individual taxpayers only). Go to IRS.gov/Account to securely access information about your federal tax account.
Photographs of missing children. The IRS is a proud partner with the National Center for Missing & Exploited Children® (NCMEC). Photographs 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 800-THE-LOST (800-843-5678) if you recognize a child. 1. Tax Withholding for 2022IntroductionThis chapter discusses income tax withholding on:
This chapter explains in detail the rules for withholding tax from each of these types of income. The discussion of salaries and wages includes an explanation of how to complete Form W-4. This chapter also covers backup withholding on interest, dividends, and other payments. Useful ItemsYou may want to see: Form (and Instructions)
See How To Get Tax Help at the end of this publication for information about getting these publications and forms. Salaries and WagesIncome tax is withheld from the pay of most employees. Your pay includes your regular pay, bonuses, commissions, and vacation allowances. It also includes reimbursements and other expense allowances paid under a nonaccountable 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 under Exemption From Withholding, later. You can ask your employer to withhold income 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 withheld from your cash wages for work on a farm unless your employer both:
Differential wage payments. When employees are on leave from employment for military duty, some employers make up the difference between the military pay and civilian pay. Payments 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-4The amount of income tax your employer withholds from your regular pay depends on three things.
Form W-4 includes four steps that will give information to your employer to figure your withholding. Complete Steps 2 through 4 only if they apply to you. Step 1. Enter your personal information, including your anticipated filing status. Your anticipated filing status will determine the standard deduction and tax rates used to figure your withholding. Step 2. Complete this step if you (1) hold more than one job at a time, or (2) are married and plan to file a joint return and your spouse also works. .  Step 3. Complete this step if you have dependents and think you may be eligible to claim the child tax credit or credit for other dependents on your tax return. Also, complete this step if you want to include an estimate of your other tax credits (for example, an education credit or the foreign tax credit). Step 4. Complete this optional step to make other adjustments.
New JobWhen 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 example, you start working after the beginning of the year), too much tax may be withheld. You may be able to avoid overwithholding if your employer 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 begin a new job, you will need to file Form W-4 with your new employer. You should also consider furnishing a new Form W-4P. Changing Your WithholdingDuring 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 withholding. If a change in personal circumstances reduces the amount of withholding you are entitled to claim, you are required to give your employer a new Form W-4 within 10 days after the change occurs. The following rules apply in determining whether you are required to furnish a new Form W-4 to your employer. Change of status resulting in withholding less than your tax liability. If you have one of the changes in the following bullet list and you won't have enough tax withheld for the remainder of 2022 to cover your income tax liability for 2022, you are required to furnish a new Form W-4 to your employer within 10 days after the date of the change.
Change of status resulting in withholding that will cover your tax liability. If you have a change of status listed in the previous section, you don't have to furnish a new Form W-4 for 2022 if after the change you will have enough tax withheld for the remainder of 2022 to cover your income tax liability. However, if you will have enough tax withheld for 2022 to cover your income tax liability after a change or changes in status, but your filing status changes from Married Filing Jointly (or Qualifying Widow(er)) to Head of Household or to Single (or Married Filing Separately) or from Head of Household to Single (or Married Filing Separately) during 2022, you are required to furnish your employer a new Form W-4 for 2023 by December 1, 2022, or, if later, 10 days after the date of the change in filing status, to take effect in 2023. Otherwise, if you want to change your withholding for any other reason, you can generally do that whenever you wish. See Table 1-1 for examples of personal and financial changes you should consider. Table 1-1. Personal and Financial Changes
If you change the amount of your withholding, you can request that your employer withhold using the Cumulative Wage Method, later. Checking Your WithholdingAfter 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 withheld, 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 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 penalty. If too much tax is withheld, you will lose the use of that money until you get your refund. Always check your withholding if there are personal 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 payment 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 withholding, the easier it is to get the right amount of tax withheld. You should check your withholding when any of the following situations occur.
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 Tax Withholding Estimator at IRS.gov/W4App. If you use the worksheets and tables in this publication, follow these steps.
If you are not having the correct amount of tax withheld, line 6 of Worksheet 1-5 will show you how to adjust the amount 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. Detailed instructions for completing a new Form W-4 to adjust your withholding follow Worksheet 1-5. How Do You Increase Your Withholding?You can increase your withholding by entering an additional amount that you want withheld from each paycheck on Form W-4. Requesting an additional amount be withheld. You can request that an additional amount be withheld from each paycheck by entering the additional amount in Step 4(c) 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:
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, determine the extra amount that you want to apply to that job and divide that amount by the number of paydays remaining in 2022 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 withholding. 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 2022, they will also 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 Worksheet 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 in Step 4(c). 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 2022, you may be able to decrease your withholding by following the instructions in Worksheet 1-5. Tax CreditsTable 1-2 shows many of the tax credits you may be able to use to decrease your withholding. For a complete list of credits you may be able to claim, see the 2021 Instructions for Form 1040. Step 3 of Form W-4 provides instructions for determining the amount of the child tax credit and the credit for other dependents. You can also include other tax credits in Step 3 of Form W-4. To do so, complete Worksheet 1-6 and add the amount from line 11 of that worksheet to the amount you are entering for other dependents in Step 3 of Form W-4. Including these credits will increase your paycheck and reduce the amount of any refund you may receive when you file your tax return. When Will Your New Form W-4 Go Into Effect?If the change is for the current year, your employer 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. Form W-4PWhen 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 compensation plans, you completed Form W-4 instead of Form W-4P. You completed either form based on your projected income at that time. If 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 correct amount of withholding for your new amount of income. The 2022 Form W-4P was revised and now is only used for periodic pension or annuity payments. The new format more closely parallels the 2020 and later Forms W-4. During 2022, the payer of your pension or annuity can ask you to complete either the 2021 or the 2022 version of Form W-4P. If the payer of your pension or annuity asks you to complete a 2021 Form W-4P, follow the instructions that accompany that form. If you need additional information, see last year's (2021) Pub. 505. The following instructions are for the 2022 Form W-4P and are similar to the instructions for completing a 2022 Form W-4. Form W-4P includes four steps that will give information to the payer of your pension or annuity for how to figure your withholding. Complete Steps 2 through 4 only if they apply to you. Step 1. Enter your personal information, including your anticipated filing status. Your anticipated filing status will determine the standard deduction and tax rates used to figure your withholding. Step 2. Complete this step if you (1) have income from a job or more than one pension/annuity, and/or (2) are married filing jointly and your spouse receives income from a job or a pension/annuity. . Step 3. Complete this step if you have dependents and think you may be eligible to claim the child tax credit or credit for other dependents on your tax return. Also, complete this step if you want to include an estimate of your other tax credits (for example, an education credit or the foreign tax credit). Step 4. Complete this optional step to make other adjustments.
Note.If you don't give Form W-4P to your payer, you don't provide an SSN, or the IRS notifies the payer that you gave an incorrect SSN, then the payer will withhold tax from your payments as if your filing status is single with no adjustments in Steps 2 through 4. For payments that began before 2022, your current withholding election (or your default rate) remains in effect unless you submit a new Form W-4P. 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 withholding 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 be for personal or financial reasons. You may need more tax withheld, or you may need less. Table 1-2. Tax Credits for 2022
Getting the Right Amount of Tax WithheldIn 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.
But because the worksheets and withholding methods don’t account for all possible situations, you may not be getting the right amount withheld. This is most likely to happen in the following situations.
If any of these situations apply to you, you can use the Tax Withholding Estimator 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 worksheets in this publication to determine if you should pay estimated tax. Part-Year MethodIf you work only part of the year and your employer 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 requirements.
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.
Cumulative Wage MethodIf you change your withholding during the year, too much or too little tax may have been withheld for the period before 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 employer 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
Tax Withholding Estimator. If you are concerned that you may be having too much or too little income tax withheld from your pay, the IRS provides a withholding estimator on its website. Go to IRS.gov/W4App. It can help you determine the correct amount to be withheld any time during the year. Rules Your Employer Must FollowIt 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 employer 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 Form W-4, your employer should treat you as though you checked the box for Single or Married filing separately in Step 1(c) and made no entries in Step 2, Step 3, or Step 4 of the 2022 Form W-4. However, if you were working for the same employer in 2020, were paid wages in 2020, and failed to furnish a Form W-4, your employer should continue to treat you as single and claiming zero allowances on a 2019 Form W-4. Repaying withheld tax. If you find you are having too much tax withheld because you didn’t account for all your dependents or deductions 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 return. However, if your employer has withheld more than the correct amount of tax for the 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 incorrectly. 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. Your withholding or any claim for a complete exemption from withholding 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 supplying false information on Form W-4. See Penalties, later. If the IRS determines that you have overstated your withholding or can’t claim a complete exemption from withholding, the IRS will issue a notice that specifies the withholding arrangement permitted for the employee (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 that the IRS determination was otherwise incorrect, you must submit a new Form W-4 and a written statement to support your claims made on Form W-4 that would decrease federal income tax withholding 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 adequate, your employer will be required to withhold based on the original lock-in letter. After the lock-in letter takes effect, your employer must withhold tax on the basis of the withholding rate (marital status) and maximum withholding specified in that letter. If you later believe that you are entitled to claim exemption from withholding or otherwise adjust your withholding, you can complete a new Form W-4 and a written statement 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 previously determined by the IRS until the IRS advises your employer otherwise. At any time, either before or after the lock-in letter becomes effective, you may give your employer a new Form W-4 that does not claim complete exemption from withholding and results 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 WithholdingIf 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 2022 only if both of the following situations apply.
Use Figure 1-A to help you decide whether you can claim exemption from withholding. Don’t use Figure 1-A if you:
These situations are discussed later. Students. If you are a student, you are not automatically exempt. If you work only part time or during the summer, you may qualify for exemption 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 during 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 2021 return. Using Figure 1-A, you find that you can claim exemption from withholding.
Figure 1-A: Exemption From Withholding on Form W-4 Figure 1-A. Exemption From Withholding on Form W-4 Figure 1-A. Exemption From Withholding on Form W-4 Summary: This is a flowchart used to determine if the taxpayer is allowed to claim exemption from withholding on his Form W-4. Start This is the start of the flowchart. Decision (1) For 2021, did you have a right to a refund of ALL federal income tax withheld because you had NO tax liability?
Process (a) You CAN’T claim exemption from withholding. Continue To End Decision (2) For 2022, will someone (such as your parent) be able to claim you as a dependent?
Decision (3) Will your 2022 total income be more than the amount shown below for your filing status?
Process (b) You CAN claim exemption from withholding. Continue To End Decision (4) Will your 2022 income be more than $1,150?
Decision (5) Will your 2022 income include more than $400 of unearned income (interest, dividends, etcetera)?
Decision (6) Will your 2022 total income be $12,950 or less?
End This is the end of the flowchart. Please click here for the text description of the image. 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 income during the year. Using Figure 1-A, you find that you can’t claim exemption from withholding because your unearned income will be more than $400 and your total income will be more than $1,150. . . Itemizing deductions or claiming credits. If you had no tax liability for 2021, and you will:
use Worksheet 2-1 (also, see chapter 2) to figure your 2022 expected tax liability. You can claim exemption from withholding only if your total expected tax liability (line 11c of the worksheet) is zero. Claiming exemption from withholding. To claim exemption, you must give your employer a Form W-4. Write “Exempt” on the form in the space below Step 4(c) and complete Steps 1(a), 1(b), and 5. Don’t complete any other steps. If you claim exemption, but later your situation changes so that you will have to pay income tax after all, you must file a new Form W-4 within 10 days after the change. If you claim exemption in 2022 but you expect to owe income tax for 2023, you must file a new Form W-4 by December 1, 2022. Your claim of exempt status may be reviewed by the IRS. See IRS review of your withholding, 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 exemption. Supplemental WagesSupplemental wages include bonuses, commissions, overtime pay, vacation allowances, certain 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 supplemental wages can withhold income tax from these wages at a 22% flat rate under certain circumstances as explained in the section on supplemental wages in Pub. 15. Expense allowances. Reimbursements or other expense allowances paid by your employer 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 business expenses to your employer or does not require you to return your employer's payments that are more than your proven expenses. Reimbursements or other expense allowances 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 allowance arrangement must include all three of the following rules.
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 list will be treated as taking place within a reasonable period of time.
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 Expenses. PenaltiesYou may have to pay a penalty of $500 if both of the following apply.
There is also a criminal penalty for willfully supplying false or fraudulent information on your Form W-4 or for willfully failing to supply information that would increase the amount withheld. 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 attempt to reduce or eliminate the proper withholding of taxes. A simple error or an honest mistake won’t result in one of these penalties. TipsThe tips you receive while working on your job are considered part of your pay. You must include your tips on your tax return on the same line as your regular pay. However, tax isn’t withheld directly from tip income, as it is from your regular pay. Nevertheless, your employer will take into account the tips you report when figuring how much to withhold from your regular pay. Reporting tips to your employer. If you receive tips of $20 or more in a month while working for any one employer, you must report to your employer the total amount of tips you receive 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 separate report to each employer. Report only the tips you received while working for that employer, 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 counted as part of your income for the month you report them. Your employer can figure your withholding in either of two ways.
Not enough pay to cover taxes. If your regular pay isn’t enough for your employer to withhold 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 withholds 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 may also 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 report 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 income and on tip allocation, see Pub. 531, Reporting Tip Income. Taxable Fringe BenefitsThe value of certain noncash fringe benefits you receive from your employer is considered part of your pay. Your employer must generally withhold income tax on these benefits from your regular pay. Although the value of your personal use of an employer-provided car, truck, or other highway 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 considered paid at least once a year. Your employer 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 December 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, 2020, through October 31, 2021, as paid to you in 2021. To determine the total value of benefits paid to you in 2022, your employer will add the value of any benefits paid in November and December of 2021 to the value of any benefits paid in January through October of 2022. Exceptions. Your employer can’t choose when to withhold tax on the transfer of either real property or personal property of a kind normally 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 withholding on the total or withhold a flat 22% of the benefit's value. If the benefit's actual value can’t be determined 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 employer must pay the IRS any additional withholding 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 total of the taxable fringe benefits paid or treated as paid to you during the year and the tax withheld 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 employer 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 separately 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 Nontaxable Income. Sick PaySick 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 employer, 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 are usually not taxable. Union agreements. If you receive sick pay under a collective bargaining agreement between your union and your employer, the agreement may determine the amount of income tax withholding. 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 withheld. They also explain restrictions that may apply. 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 estimated tax or withholding, or a combination of both, you may have to pay a penalty. See chapter 2. Pensions and AnnuitiesIncome tax will usually be withheld from your pension or annuity distributions unless you choose not to have it withheld. This rule applies to distributions from:
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 rollover distribution (ERD). Income tax withholding from an ERD is mandatory. ERDs are discussed 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 pension or annuity that isn’t taxable. The tax withheld 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 PaymentsWithholding from periodic payments of a pension or annuity is figured similarly to withholding from certain 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. Form W-4P was revised in 2022 to more closely resemble Form W-4. Follow instructions for Form W-4P and the rules discussed under Form W-4P, earlier, to fill out your 2022 Form W-4P. For the 2021 Form W-4P, withholding is figured similarly to withholding for employees who have a 2019 (or earlier) Form W-4 in effect. See the instructions for the 2021 Form W-4P and 2021 Pub. 505 for guidance in filling out your 2021 Form W-4P. Note.Use Form W-4, not Form W-4P, if you receive any of the following.
Withholding rules. The withholding rules for pensions and annuities differ from those for salaries and wages in the following ways.
Effective date of withholding certificate. If you give your withholding certificate (Form W-4P or a similar form) to the payer on or before 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 PaymentsTax will be withheld at a flat 10% rate on any nonperiodic payments you receive, unless you choose a different withholding rate. Use Form W-4R, line 2, to choose a withholding rate other than the default 10% rate. You can choose a rate between 0% and 100%. You can choose to have no federal income tax withheld by entering “-0-” on line 2. Generally, you can't choose less than 10% for payments to be delivered outside of the United States and its possessions. If you want to revoke a choice not to have tax withheld, see Choosing Not To Have Income Tax Withheld, later. . Eligible Rollover DistributionsA distribution you receive that is eligible to be rolled over tax free into a qualified retirement or annuity plan is called an eligible rollover distribution (ERD). This is the taxable part of any distribution from a qualified pension plan or tax-sheltered annuity that isn’t any of the following.
The payer of a distribution must withhold at a flat 20% rate on any part of an ERD that is distributed rather than rolled over directly to another qualified plan. Withholding on these distributions is mandatory. You may choose a rate higher than 20% by entering it on line 2 of Form W-4R. Don't give Form W-4R to your payer unless you want more than 20% withheld. However, no withholding is required if the entire distribution is transferred in a direct rollover to a traditional IRA or another eligible retirement plan. Choosing Not To Have Income Tax WithheldFor payments other than eligible rollover distributions, you can choose not to have income tax withheld. The payer will tell you how to make this choice. If you use Form W-4R, enter “-0-” on line 2 to choose not to have withholding. This choice will remain in effect until you decide you want withholding and inform the payer. See Revoking a choice not to have tax withheld, later. The payer must withhold if either of the following applies.
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 estimated 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 must generally have tax withheld from pension or annuity benefits delivered outside 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 telling 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 income tax withheld from periodic or nonperiodic payments. You can tell the payer exactly how much to withhold by completing a new Form W-4P for periodic payments or Form W-4R for nonperiodic payments. Gambling WinningsIncome 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 income tax withholding.
It does not matter whether your winnings are paid in cash, in property, or as an annuity. Winnings not paid in cash are taken into account at their fair market value. Exception. Gambling winnings from bingo, keno, and slot machines are generally not subject 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 gambling 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 receive a Form W-2G, Certain Gambling Winnings, showing the amount you won and the amount withheld. Report the tax withheld on your 2022 Form 1040 or 1040-SR, 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 information.
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 particular 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 example, 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 winnings of at least $600. Unemployment CompensationYou 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 Payments. Box 1 will show the amount of unemployment compensation you got for the year. Box 4 will show the amount of federal income tax withheld, if any. Federal PaymentsYou can choose to have income tax withheld from certain federal payments you receive. These payments are the following.
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 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. More information. For more information about the tax treatment of social security and railroad retirement benefits, see Pub. 915, Social Security and Equivalent Railroad Retirement Benefits. Get Pub. 225, Farmer's Tax Guide, for information 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 shareholder of an ANC, you can request to have income tax withheld from dividends and other distributions 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 withheld, or the ANC doesn’t accept your request, 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. Backup WithholdingBanks or other businesses that pay you certain kinds of income must file an information return (Form 1099) with the IRS. The information return 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 are generally 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:
Backup withholding may also apply to gambling winnings. See Backup withholding on gambling winnings under Gambling Winnings, earlier. Payments not subject to backup withholding. Backup withholding does not apply to payments 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.
Form 1099 and backup withholding are generally not required for a payment of less than $10. Withholding rules. When you open a new account, 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 Certification, or a similar form. You must enter your TIN on the form and, if your account or investment will earn interest or dividends, you must also 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.
Taxpayer identification number (TIN). Your TIN is one of the following three numbers.
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, see Pub. 1915, Understanding Your IRS Individual Taxpayer Identification Number. . How to prevent or stop backup withholding. If you have been notified by a payer that the TIN you gave is incorrect, you can usually 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 validated by the Social Security Administration or by the IRS. This may happen if both the following conditions exist.
Underreported interest or dividends. If you have been notified that you underreported interest or dividends, you must request and receive a determination from the IRS to prevent backup withholding from starting or to stop backup withholding once it has begun. Your request must show that at least one of the following situations applies.
If the IRS determines that backup withholding should stop, it will provide you with certification and will notify the payers who were sent notices earlier. Penalties. There are civil and criminal penalties for giving false information to avoid backup withholding. The civil penalty is $500. The criminal penalty, upon conviction, is a fine of up to $1,000 or imprisonment of up to 1 year, or both.
Worksheets for Chapter 1
Worksheet 1-1. Exemption From Withholding for Persons Age 65 or Older or Blind
Worksheet 1-2. Exemption From Withholding for Dependents Age 65 or Older or Blind
Worksheet 1-3. Projected Tax for 2022
Worksheet 1-4. Tax Computation Worksheets for 2022
Tax Computation Worksheet for 2022 (Continued)
Worksheet 1-5. Projected Withholding for 2022
Instructions for line 6—If your withholding to date was figured based on a 2019 (or earlier) Form W-4.
Instructions for line 6—If your withholding to date was figured based on a 2019 (or earlier) Form W-4.
Instructions for line 6—If your withholding to date was figured based on a 2022 Form W-4.
. Worksheet 1-6. Tax Credits for 2022 Form W-4 or Form W-4P
2. Estimated Tax for 2022IntroductionEstimated tax is the method used to pay tax on income that isn’t subject to withholding. This includes income from self-employment, interest, dividends, rent, gains from the sale of assets, prizes, and awards. You may also have to pay estimated tax if the amount of income tax being withheld from your salary, pension, or other income 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 withholding 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 payment period (see When To Pay Estimated Tax, later), you may be charged a penalty even if you are due a refund when you file your tax return. For information on when the penalty applies, see the Instructions for Form 2210. . TopicsThis chapter discusses:
Useful ItemsYou may want to see: Form (and Instructions)
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 TaxIf 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 2022 if you meet all three of the following conditions.
You had no tax liability for 2021 if your total tax (defined later under Total tax for 2021—line 12b) was zero or you didn’t have to file an income tax return. Figure 2-A: Do You Have To Pay Estimated Tax? Figure 2-A. Do You Have To Pay Estimated Tax? Figure 2-A. Do You Have To Pay Estimated Tax? Summary: This is the flowchart used to determine if a taxpayer has to make estimated tax payments. Start This is the start of the flowchart. Decision (1) Will you owe $1000 or more for 2022 after subtracting income tax withholding and refundable credits (see Footnote 1) from your total tax? (Don’t subtract any estimated tax payments.) Footnote 1: Use the refundable credits shown on the 2022 Estimated Tax Worksheet, line 11b.
Decision (2) Will your income tax withholding and refundable credits (see Footnote 1) be at least 90% (66 2/3% for farmers and fishermen) of the tax shown on your 2022 tax return?
Decision (3) Will your income tax withholding and refundable credits* (see Footnote 1) be at least 100% (see Footnote 2) of the tax shown on your 2021 tax return? Note: Your 2021 return must have covered a 12-month period. Footnote 2: 110% if less than two-thirds of your gross income for 2021 or 2022 is from farming or fishing and your 2021 adjusted gross income was more than $150,000 ($75,000 if your filing status for 2022 is married filing a separate return).
Process (a) You are NOT required to pay estimated tax. Continue To End Process (b) You MUST make estimated tax payment(s) by the required due date(s). See When To Pay Estimated Tax. Continue To End End This is the end of the flowchart. Please click here for the text description of the image. Who Must Pay Estimated TaxIf you owed additional tax for 2021, you may have to pay estimated tax for 2022. 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 RuleIn most cases, you must pay estimated tax for 2022 if both of the following apply.
Note. The percentages in (2a) or (2b) just listed may be different if you are a farmer, fisherman, or higher income taxpayer. See Special Rules, later. . Figure 2-A takes you through the general rule. You may find this helpful in determining if you must pay estimated tax. . Example 1. Jane Smart uses Figure 2-A and the following information to figure whether she should pay estimated tax for 2022. She files Form 1040 as head of household, takes the standard deduction, and expects no refundable credits for 2022.
Jane's answer to Figure 2-A, box 1, is YES; she expects to owe at least $1,000 for 2022 after subtracting her withholding from her expected total tax ($11,015 − $10,000 = $1,015). Her answer to box 2a is YES; she expects her income tax withholding ($10,000) to be at least 90% of the tax to be shown on her 2022 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 2022. 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 2021 return ($7,502). Jane must increase her withholding or pay estimated tax for 2022. Example 3. The facts are the same as in Example 2, except that the total tax shown on Jane's 2021 return was $6,400. Because she expects to have more than $6,400 withheld in 2022 ($7,000), her answer to box 2b is YES. Jane does not need to pay estimated tax for 2022. Married TaxpayersIf you qualify to make joint estimated tax payments, apply the rules discussed here to your joint estimated income. You and your spouse can make joint estimated tax payments even if you are not living together. However, you and your spouse can’t make joint estimated tax payments if:
Note.Individuals who are in registered domestic partnerships, civil unions, or other similar formal relationships that are not marriages under state law can’t make joint estimated tax payments. These individuals can take credit only for the estimated tax payments that he or she made. If you and your spouse can’t make joint estimated tax payments, apply these rules to your separate estimated income. Making joint or separate estimated tax payments won’t affect your choice of filing a joint tax return or separate returns for 2022. 2021 separate returns and 2022 joint return. If you plan to file a joint return with your spouse for 2022, but you filed separate returns for 2021, your 2021 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. 2021 joint return and 2022 separate returns. If you plan to file a separate return for 2022, but you filed a joint return for 2021, your 2021 tax is your share of the tax on the joint return. You file a separate return if you file as single, head of household, or married filing separately. To figure your share of the tax on a joint return, first figure the tax both you and your spouse would have paid had you filed separate returns for 2021 using the same filing status for 2022. Then, multiply the tax on the joint return by the following fraction.
Example. Joe and Heather filed a joint return for 2021 showing taxable income of $48,500 and a tax of $5,425. Of the $48,500 taxable income, $40,100 was Joe's and the rest was Heather's. For 2022, they plan to file married filing separately. Joe figures his share of the tax on the 2021 joint return as follows.
Special RulesThere are special rules for farmers, fishermen, and certain higher income taxpayers. Farmers and FishermenIf at least two-thirds of your gross income for 2021 or 2022 is from farming or fishing, substitute 662/3% for 90% in (2a) under General Rule, earlier. Gross income. Your gross income is all income you receive in the form of money, goods, property, and services that isn’t exempt from tax. To determine whether two-thirds of your gross income for 2021 was from farming or fishing, use as your gross income the total of the income (not loss) amounts. Joint returns. On a joint return, you must add your spouse's gross income to your gross income to determine if at least two-thirds of your total gross income is from farming or fishing. Gross income from farming. This is income from cultivating the soil or raising agricultural commodities. It includes the following amounts.
For 2021, gross income from farming is the total of the following amounts.
Wages you receive as a farm employee and wages you receive from a farm corporation are not gross income from farming. 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, seaweeds, or other aquatic forms of animal and vegetable life. Gross income from fishing includes the following amounts.
Services normally performed in connection with fishing include:
Higher Income Taxpayers
If your AGI for 2021 was more than $150,000 ($75,000 if your filing status for 2022 is married filing a separate return), substitute 110% for 100% in (2b) under General Rule, earlier. For 2021, AGI is the amount shown on Form 1040 or 1040-SR, line 11. Note.This rule does not apply to farmers and fishermen. AliensResident and nonresident aliens may also have to pay estimated tax. Resident aliens should follow the rules in this publication, unless noted otherwise. Nonresident aliens should get Form 1040-ES (NR), U.S. Estimated Tax for Nonresident 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 TrustsEstates and trusts must also pay estimated tax. However, estates (and certain grantor trusts that receive the residue of the decedent's estate under the decedent's will) are exempt from paying estimated tax for the first 2 years after the decedent's death. 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 TaxTo figure your estimated tax, you must figure your expected AGI, taxable income, taxes, deductions, and credits for the year. When figuring your 2022 estimated tax, it may be helpful to use your income, deductions, and credits for 2021 as a starting point. Use your 2021 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 2022. 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. 2022 Estimated Tax WorksheetUse Worksheet 2-1 to help guide you through the information about completing the 2022 Estimated Tax Worksheet. You can also find a copy of the worksheet in the instructions for Form 1040-ES. Expected AGI—Line 1Your expected AGI for 2022 (line 1) is your expected total income minus your expected adjustments 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 exempt. Total income includes all income and loss for 2022 that, if you had received it in 2021, would have been included on your 2021 tax return in the total on line 9 of Form 1040 or 1040-SR. . Adjustments to income. Be sure to subtract from your expected total income all of the adjustments you expect to take on your 2022 tax return. . Expected Taxable Income— Line 2Reduce your expected AGI for 2022 (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 2022 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 2022 tax return, enter the amount on line 2a. Use Worksheet 2-4 to figure your standard deduction. No standard deduction. The standard deduction for some individuals is zero. Your standard deduction will be zero if you:
Expected Taxes and Credits— Lines 4–11cAfter you have figured your expected taxable income (line 3), follow the steps next to figure your expected taxes, credits, and total tax for 2022. 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 anything. Step 1. Figure your expected income tax (line 4). Generally, you will use the 2022 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 $2,300 of investment income.
See Pub. 929, Tax Rules for Children and Dependents. Although the ages and dollar amounts in the publication may be different in the 2021 revision, this reference will give you basic information for figuring the tax. Tax on net capital gain. The regular income 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. . Note.The tax rate on your capital gains and dividends will depend on your income. . Step 2. Total your expected taxes (line 6). Include on line 6 the sum of the following.
Step 3. Subtract your expected credits (line 7). If you are using your 2021 return as a guide and filed Form 1040 or 1040-SR, your total credits for 2021 were shown on line 21. 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 should already 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.
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 2022 (line 11c). Required Annual Payment— Line 12cOn lines 12a through 12c, figure the total amount you must pay for 2022, through withholding and estimated tax payments, to avoid paying a penalty. General rule. The total amount you must pay is the smaller of:
Special rules. There are special rules for higher income taxpayers and for farmers and fishermen. Higher income taxpayers. If your AGI for 2021 was more than $150,000 ($75,000 if your filing status for 2022 is married filing separately), substitute 110% for 100% in (2) above. This rule does not apply to farmers and fishermen. For 2021, AGI is the amount shown on Form 1040 or 1040-SR, line 11.
Example. Jeremy Martin's total tax on his 2021 return was $42,581, and his expected tax for 2022 is $71,253. His 2021 AGI was $180,000. Because Jeremy had more than $150,000 of AGI in 2021, he figures his required annual payment as follows. He determines that 90% of his expected tax for 2022 is $64,128 (90% (0.90) × $71,253). Next, he determines that 110% of the tax shown on his 2021 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 2021 or 2022 is from farming or fishing, your required annual payment is the smaller of:
For definitions of “gross income from farming” and “gross income from fishing,” see Farmers and Fishermen, earlier, under Special Rules. Total tax for 2021—line 12b. Your 2021 total tax is the amount on line 24 reduced by the following.
Total Estimated Tax Payments Needed—Line 14aUse lines 13 and 14a to figure the total estimated tax you may be required to pay for 2022. Subtract your expected withholding from your required annual payment (line 12c). You must usually pay this difference in four equal installments. See When To Pay Estimated Tax and How To Figure Each Payment , later. You don’t have to pay estimated tax if:
Withholding—line 13. Your expected withholding for 2022 (line 13) includes the income tax you expect to be withheld from all sources (wages, pensions and annuities, etc.). It includes excess social security and tier 1 railroad retirement tax you expect to be withheld from your wages and compensation. For this purpose, you will have excess social security or tier 1 railroad retirement tax withholding for 2022 only if your wages and compensation from two or more employers are more than $147,000. It also includes Additional Medicare Tax you expect to be withheld from your wages or compensation. 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 TaxFor 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 payment 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.
Saturday, Sunday, holiday rule. If the due date for an estimated tax payment falls on a Saturday, Sunday, or legal holiday, the payment will be on time if you make it on the next day that isn’t a Saturday, Sunday, or a holiday. See Pub. 509 for a list of all legal holidays. January payment. If you file your 2022 Form 1040 or 1040-SR by January 31, 2023, and pay the rest of the tax you owe, you don’t need to make the payment due on January 17, 2023. Example. Janet Adams does not pay any estimated tax for 2022. She files her 2022 income tax return and pays the balance due shown on her return on January 26, 2023. 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 making the first three estimated tax payments, if required. Any penalty for not making those payments will be figured up to January 26, 2023. Fiscal-year taxpayers. If your tax year does not start on January 1, your payment due dates are:
You don’t have to make the last payment listed above if you file your income tax return by the last day of the first month after the end of your fiscal year and pay all the tax you owe with your return. When To StartYou don’t have to make estimated tax payments 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 estimated taxes. You can:
If you choose to pay in installments, make your first payment by the due date for the first payment period. Make your remaining installment payments by the due dates for the later periods. To avoid any estimated tax penalties, all installments 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 estimated tax by the due date for that period or you can pay it in installments by the due date for that period and the due dates for the remaining periods. Table 2-1 shows the general due dates for making installment payments when the due date does not fall on a Saturday, Sunday, or holiday. Table 2-1. General Due Dates for Estimated Tax Installment Payments
How much to pay to avoid penalty. To determine how much you should pay by each payment due date, see How To Figure Each Payment, later.
Farmers and FishermenIf at least two-thirds of your gross income for 2021 or 2022 is from farming or fishing, you have only one payment due date for your 2022 estimated tax: January 17, 2023. 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 2022 Form 1040 or 1040-SR by March 1, 2023, and pay all the tax you owe at that time, you don’t need to make an estimated tax payment. 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:
How To Figure Each PaymentAfter 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 the Instructions for Form 2210. Regular Installment MethodIf your first estimated tax payment is due April 18, 2022, you can figure your required payment for each period by dividing your annual estimated tax due (line 14a of the 2022 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 income, adjustments, deductions, or credits may make it necessary for you to refigure your estimated 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 period. See Annualized Income Installment Method, later. . Example. Early in 2022, Mira Roberts figures that her estimated tax due is $1,800. She makes estimated tax payments on April 18 and June 15 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 filled-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 figured separately for each payment period. If you figure your payments using the regular installment method and later refigure your payments because of an increase in income, you may be charged a penalty for underpayment of estimated tax for the period(s) before you changed your payments. To see how you may be able to avoid or reduce this penalty, see Schedule AI—Annualized Income Installment Method in the Instructions for Form 2210. Worksheet 2-10. Amended Estimated Tax Worksheet—Illustrated
Worksheet 2-10. Amended Estimated Tax Worksheet—Blank
Annualized Income Installment MethodIf you don’t receive your income evenly throughout the year (for example, your income from a repair shop you operate is much larger in the summer than it is during the rest of the year), your required estimated tax payment for one or more periods may be less than the amount figured using the regular installment method. The annualized income installment method annualizes your tax at the end of each period based on a reasonable estimate of your income, deductions, and other items relating to events that occurred from the beginning of the tax year through the end of the period. To see whether you can pay less for any period, complete the 2022 Annualized Estimated Tax Worksheet (Worksheet 2-7). . Use the result you figure on line 32 of Worksheet 2-7 to make your estimated tax payments and complete your payment vouchers. Note.If you use the annualized income installment method to figure your estimated tax payments, you must file Form 2210 with your 2022 tax return. See Schedule AI—Annualized Income Installment Method in the Instructions for Form 2210 for more information. Instructions for the 2022 Annualized Estimated Tax Worksheet (Worksheet 2-7). The purpose of this worksheet is to determine your estimated tax liability as your income accumulates throughout the year, rather than dividing your entire year's estimated tax liability by four as if your income was earned equally throughout the year. 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 payment period, complete the corresponding worksheet 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 Section B of this worksheet. Use the amounts on line 41 when figuring your expected AGI to enter in each column of Section A, line 1. Line 4. Be sure to consider deduction limits figured on Schedule A (Form 1040), such as the $10,000 limit on state and local taxes. Figure your deduction limits using your expected AGI in the corresponding column of line 1 (2022 Annualized Estimated Tax Worksheet (Worksheet 2-7)). Line 7. If you won’t itemize your deductions, use Worksheet 2-4 to figure your standard deduction. 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 $2,300 of investment income.
See Pub. 929. Tax on net capital gain. The regular income 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. Tax on qualified dividends and capital gains. For 2022, your capital gain and dividends rate will depend on your income. . . Line 13. Add the tax from Forms 8814, 4972, and 6251 for the period. Also, include any recapture of an education credit for each period. You may owe this tax if you claimed an education credit in an earlier year and you received either tax-free educational assistance or a refund of qualifying expenses for the same student after filing your 2021 return. Use the 2021 forms or worksheets to see if you will owe any of the taxes just discussed. Figure the tax based on your income and deductions during the period shown in the column headings. Multiply this amount by the annualization amounts shown for each column on line 2 of the 2022 Annualized Estimated Tax Worksheet (Worksheet 2-7). Enter the result on line 13 of this worksheet. 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 deduction 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.
Line 20. Include all the refundable credits (other than withholding credits) you can claim because of events that occurred during the period. These include the earned income credit, additional child tax credit, fuel tax credit, net premium tax credit, any refundable credit from Form 8885, refundable American opportunity credit, and section 1341 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 2022 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 security and railroad retirement tax. Also, include estimated federal income tax withholding. One-fourth of your estimated withholding 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 2022 by:
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 beginning of the period up to and including the payment due date. You can make this choice separately for the taxes withheld from your wages and all other withholding. For an explanation of what to include in withholding, see Total Estimated Tax Payments Needed—Line 14a, earlier. Nonresident aliens. If you will file Form 1040-NR and you don’t receive wages as an employee subject to U.S. income tax withholding, the instructions for the worksheet are modified as follows.
See Pub. 519 for more information. Estimated Tax Payments Not RequiredYou don’t have to pay estimated tax if your withholding in each payment period is at least as much as:
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 TaxThere are several ways to pay estimated tax.
Credit an OverpaymentIf you show an overpayment of tax after completing your Form 1040 or 1040-SR for 2021, you can apply part or all of it to your estimated tax for 2022. On Form 1040 or 1040-SR, enter the amount you want credited to your estimated tax rather than refunded. Take the amount you have credited into account when figuring your estimated tax payments. If you timely file your 2021 return, treat the credit as a payment made on April 18, 2022. If you are a beneficiary of an estate or trust, and the trustee elects to credit 2022 trust payments of estimated tax to you, you can treat the amount credited as paid by you on January 17, 2023. 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 2021 tax return, she saw that she had overpaid her taxes by $750. Kathleen knew she would owe additional tax in 2022. She credited $600 of the overpayment to her 2022 estimated tax and had the remaining $150 refunded to her. In September, she amended her 2021 return by filing Form 1040-X, Amended U.S. Individual Income Tax Return. It turned out that she owed $250 more in tax than she had thought. This reduced her 2021 overpayment from $750 to $500. Because the $750 had already been applied to her 2022 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 2022 estimated tax to pay this bill. Pay OnlinePaying online is convenient and secure and helps make sure we get your payments 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.
Pay by PhonePaying 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. ACI Payments, Inc.888-UPAY-TAXTM (888-872-9829) fed.acipayonline.comLink2GOV Corporation 888-PAY-1040TM (888-729-1040) www.PAY1040.comWorldPay US, Inc. 844-PAY-TAX-8TM (844-729-8298) www.payUSAtax.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 (Español). 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 DeviceTo pay through your mobile device, download the IRS2Go application. Pay by CashCash is an in-person payment option for individuals provided through retail partners with a maximum of $1,000 per day per transaction. To make a cash payment, you must first be registered online with ACI Payments, Inc. at fed.acipayonline.com. Pay by Check or Money Order Using the Estimated Tax Payment VoucherBefore 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. . 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. Notice to taxpayers presenting checks. When you provide a check as payment, you authorize us either to use information from your check to make a one-time electronic fund transfer from your account or to process the payment as a check transaction. When we use information from your check to make an electronic fund transfer, funds may be withdrawn from your account as soon as the same day we receive your payment, and you will not receive your check back from your financial institution. No checks of $100 million or more accepted. The IRS can’t accept a single check (including 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. Worksheets for Chapter 2
2022 Tax Rate Schedules
Worksheet 2-1.2022 Estimated Tax Worksheet
Worksheet 2-2.2022 Estimated Tax Worksheet—Line 1 Estimated Taxable Social Security and Railroad Retirement Benefits
Worksheet 2-3.2022 Estimated Tax Worksheet—Lines 1 and 9 Estimated Self-Employment Tax and Deduction Worksheet
Worksheet 2-4.2022 Estimated Tax Worksheet—Line 2 Standard Deduction Worksheet
Worksheet 2-5.2022 Estimated Tax Worksheet—Line 4 Qualified Dividends and Capital Gain Tax Worksheet
Worksheet 2-5. 2022 Estimated Tax Worksheet—Line 4 Qualified Dividends and Capital Gain Tax Worksheet (Continued)
Worksheet 2-6.2022 Estimated Tax Worksheet—Line 4 Foreign Earned Income Tax Worksheet
Worksheet 2-7. 2022 Annualized Estimated Tax Worksheet
Worksheet 2-7. 2022 Annualized Estimated Tax Worksheet (Continued)
Worksheet 2-8. 2022 Annualized Estimated Tax Worksheet—Line 10 Qualified Dividends and Capital Gain Tax Worksheet
Worksheet 2-8. 2022 Annualized Estimated Tax Worksheet—Line 10 Qualified Dividends and Capital Gain Tax Worksheet (Continued)
Worksheet 2-9.2022 Annualized Estimated Tax Worksheet—Line 10 Foreign Earned Income Tax Worksheet
How To Get Tax HelpIf you have questions about a tax issue; need help preparing your tax return; or want to download free publications, forms, or instructions, go to IRS.gov to find resources that can help you right away. Preparing and filing your tax return. After receiving all your wage and earnings statements (Forms W-2, W-2G, 1099-R, 1099-MISC, 1099-NEC, etc.); unemployment compensation statements (by mail or in a digital format) or other government payment statements (Form 1099-G); and interest, dividend, and retirement statements from banks and investment firms (Forms 1099), you have several options to choose from to prepare and file your tax return. You can prepare the tax return yourself, see if you qualify for free tax preparation, or hire a tax professional to prepare your return. Free options for tax preparation. Go to IRS.gov to see your options for preparing and filing your return online or in your local community, if you qualify, which include the following.
Using online tools to help prepare your return. Go to IRS.gov/Tools for the following.
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. Need someone to prepare your tax return? There are various types of tax return preparers, including tax preparers, enrolled agents, certified public accountants (CPAs), attorneys, and many others who don’t have professional credentials. If you choose to have someone prepare your tax return, choose that preparer wisely. A paid tax preparer is:
Although the tax preparer always signs the return, you're ultimately responsible for providing all the information required for the preparer to accurately prepare your return. Anyone paid to prepare tax returns for others should have a thorough understanding of tax matters. For more information on how to choose a tax preparer, go to Tips for Choosing a Tax Preparer on IRS.gov. Coronavirus. Go to IRS.gov/Coronavirus for links to information on the impact of the coronavirus, as well as tax relief available for individuals and families, small and large businesses, and tax-exempt organizations. Employers can register to use Business Services Online. The Social Security Administration (SSA) offers online service at SSA.gov/employer for fast, free, and secure online W-2 filing options to CPAs, accountants, enrolled agents, and individuals who process Form W-2, Wage and Tax Statement, and Form W-2c, Corrected Wage and Tax Statement. IRS social media. Go to IRS.gov/SocialMedia to see the various social media tools the IRS uses to share the latest information on tax changes, scam alerts, initiatives, products, and services. At the IRS, privacy and security are our highest priority. We use these tools to share public information with you. Don’t post your social security number (SSN) or other confidential information on social media sites. Always protect your identity when using any social networking site. The following IRS YouTube channels provide short, informative videos on various tax-related topics in English, Spanish, and ASL.
Watching IRS videos. The IRS Video portal (IRSVideos.gov) contains video and audio presentations for individuals, small businesses, and tax professionals. Online tax information in other languages. You can find information on IRS.gov/MyLanguage if English isn’t your native language. Free Over-the-Phone Interpreter (OPI) Service. The IRS is committed to serving our multilingual customers by offering OPI services. The OPI service is a federally funded program and is available at Taxpayer Assistance Centers (TACs), other IRS offices, and every VITA/TCE return site. OPI service is accessible in more than 350 languages. Accessibility Helpline available for taxpayers with disabilities. Taxpayers who need information about accessibility services can call 833-690-0598. The Accessibility Helpline can answer questions related to current and future accessibility products and services available in alternative media formats (for example, braille, large print, audio, etc.). Getting tax forms and publications. Go to IRS.gov/Forms to view, download, or print all of the forms, instructions, and publications you may need. Or, you can go to IRS.gov/OrderForms to place an order. Getting tax publications and instructions in eBook format. You can also download and view popular tax publications and instructions (including the Instructions for Form 1040) on mobile devices as eBooks at IRS.gov/eBooks. Note.IRS eBooks have been tested using Apple's iBooks for iPad. Our eBooks haven’t been tested on other dedicated eBook readers, and eBook functionality may not operate as intended. Access your online account (individual taxpayers only). Go to IRS.gov/Account to securely access information about your federal tax account.
Using direct deposit. The fastest way to receive a tax refund is to file electronically and choose direct deposit, which securely and electronically transfers your refund directly into your financial account. Direct deposit also avoids the possibility that your check could be lost, stolen, or returned undeliverable to the IRS. Eight in 10 taxpayers use direct deposit to receive their refunds. If you don’t have a bank account, go to IRS.gov/DirectDeposit for more information on where to find a bank or credit union that can open an account online. Getting a transcript of your 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 free copy of your transcript. If you prefer, you can order your transcript by calling 800-908-9946. Reporting and resolving your tax-related identity theft issues.
Ways to check on the status of your refund.
Note.The IRS can’t issue refunds before mid-February 2022 for returns that claimed the EIC or the additional child tax credit (ACTC). This applies to the entire refund, not just the portion associated with these credits. Making a tax payment. Go to IRS.gov/Payments for information on how to make a payment using any of the following options.
Note.The IRS uses the latest encryption technology to ensure that the electronic payments you make online, by phone, or from a mobile device using the IRS2Go app are safe and secure. Paying electronically is quick, easy, and faster than mailing in a check or money order. What if I can’t pay now? Go to IRS.gov/Payments for more information about your options.
Filing an amended return. You can now file Form 1040-X electronically with tax filing software to amend 2019 or 2020 Forms 1040 and 1040-SR. To do so, you must have e-filed your original 2019 or 2020 return. Amended returns for all prior years must be mailed. Go to IRS.gov/Form1040X for information and updates. Checking the status of your amended return. Go to IRS.gov/WMAR to track the status of Form 1040-X amended returns. Note.It can take up to 3 weeks from the date you filed your amended return for it to show up in our system, and processing it can take up to 16 weeks. Understanding an IRS notice or letter you’ve received. Go to IRS.gov/Notices to find additional information about responding to an IRS notice or letter. You can use Schedule LEP, Request for Change in Language Preference, to state a preference to receive notices, letters, or other written communications from the IRS in an alternative language, when these are available. Once your Schedule LEP is processed, the IRS will determine your translation needs and provide you translations when available. If you have a disability requiring notices in an accessible format, see Form 9000. Contacting your local IRS office. Keep in mind, many questions can be answered on IRS.gov without visiting an IRS 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 issue 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. Before you visit, go to IRS.gov/TACLocator to find the nearest TAC and to check hours, available services, and appointment options. Or, on the IRS2Go app, under the Stay Connected tab, choose the Contact Us option and click on “Local Offices.” The Taxpayer Advocate Service (TAS) Is Here To Help YouWhat 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 understand 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:
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, report it to them at IRS.gov/SAMS. TAS for Tax ProfessionalsTAS can provide a variety of information for tax professionals, including tax law updates and guidance, TAS programs, and ways to let TAS know about systemic problems you’ve seen in your practice. 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, LITCs can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Services are offered for free or a small fee for eligible taxpayers. To find an LITC near you, go to TaxpayerAdvocate.IRS.gov/about-us/Low-Income-Taxpayer-Clinics-LITC or see IRS Pub. 4134, Low Income Taxpayer Clinic List. Publication 505 - Additional MaterialIndexAAdditional Medicare Tax, Step 5., Line 18.Address change, Change of address.Adjustments to incomeEstimated tax, Adjustments to income.AGIExpected AGI, Expected AGI—Line 1Alaska Native Corporations, Payment to shareholders of Alaska Native Corporations (ANCs).AliensNonresident aliens, AliensAnnualized estimated tax worksheets, Worksheet 2-7. 2022 Annualized Estimated Tax Worksheet, Worksheet 2-7. 2022 Annualized Estimated Tax Worksheet (Continued) Annualized - Capital gains, Worksheet 2-8. 2022 Annualized Estimated Tax Worksheet—Line 10 Qualified Dividends and Capital Gain Tax WorksheetAnnualized - Foreign Earned Income, Worksheet 2-9.2022 Annualized Estimated Tax Worksheet—Line 10 Foreign Earned Income Tax WorksheetAnnualized - Qualified dividends, Worksheet 2-8. 2022 Annualized Estimated Tax Worksheet—Line 10 Qualified Dividends and Capital Gain Tax WorksheetAnnualized income installment method, Annualized Income Installment MethodAnnuities, Pensions and AnnuitiesAssistance (see Tax help)CCapital gains and lossesAnnualized estimated tax, Tax on net capital gain.Estimated tax on net capital gain, Tax on net capital gain.Qualified dividends, Tax on qualified dividends and capital gains.Change of address, Change of address.Commodity credit corporation loans, Federal PaymentsCompensation, Salaries and WagesIndependent contractors, backup withholding, Backup WithholdingSupplemental wages, Supplemental WagesTips, TipsWages and salaries, Salaries and WagesCrediting of overpayment, Credit an OverpaymentCredits Expected taxes and credits, Expected Taxes and Credits— Lines 4–11cCriminal penaltiesWillfully false or fraudulent Form W-4, PenaltiesCrop insurance payments, Federal PaymentsCumulative wage method of withholding, Cumulative Wage MethodEEligible rollover distributions, Eligible Rollover DistributionsEmployee business expensesAccountable plans, Accountable plan.Nonaccountable plans, Nonaccountable plan. Reimbursements, Expense allowances.Employer Identification Numbers (EINs), Taxpayer identification number (TIN).EmployersRepaying withheld tax, Repaying withheld tax.Tips, TipsWithholding rules, Rules Your Employer Must FollowEstatesEstimated tax, Estates and TrustsEstimated taxAdjustments to income, Adjustments to income.Aliens, Aliens, Nonresident aliens.Amended tax, Regular Installment MethodAnnualized income installment method, Annualized Income Installment MethodChange in amount, Change in estimated tax.Change of address, Change of address.Crediting of overpayment, Credit an OverpaymentEstates and trusts, Estates and TrustsExpected AGI, Expected AGI—Line 1Expected taxable income, Expected Taxable Income— Line 2Expected taxes and credits, Expected Taxes and Credits— Lines 4–11cFarmers and fishermen, Farmers and Fishermen, Farmers and fishermen., Farmers and FishermenFiscal year taxpayers, Fiscal-year taxpayers.Higher income individuals, Higher income taxpayers.How to figure, How To Figure Estimated Tax, How To Figure Each PaymentHow to pay, How To Pay Estimated TaxInstructions for Worksheet 2-7, annualized estimated tax, Instructions for the 2022 Annualized Estimated Tax Worksheet (Worksheet 2-7)Itemized deductions, Itemized deductions—line 2a.Married taxpayers, Married TaxpayersNet capital gain, Tax on net capital gain., Tax on net capital gain.No standard deduction, No standard deduction.Nonresident aliens, Nonresident aliens.Overpayment, Credit an OverpaymentPayment vouchers, Pay by Check or Money Order Using the Estimated Tax Payment VoucherPayments not required, Estimated Tax Payments Not RequiredRegular installment method, Regular Installment MethodRequired annual payment, Required Annual Payment— Line 12cSelf-employment income, Self-employment income.Sick pay, Estimated tax.Standard deduction, Standard deduction—line 2a., Line 7.Total estimated tax payments, Total Estimated Tax Payments Needed—Line 14aTypes of taxes included,Underpayment penalty, Underpayment penalty.When to pay, When To Pay Estimated TaxWhen to start payments, When To StartWho does not have to pay, Who Does Not Have To Pay Estimated TaxWho must pay, Who Must Pay Estimated TaxEstimated tax worksheets, Worksheets for Chapter 2, Worksheet 2-1.2022 Estimated Tax Worksheet, Worksheet 2-2.2022 Estimated Tax Worksheet—Line 1 Estimated Taxable Social Security and Railroad Retirement Benefits2019 annualized estimated tax worksheet, Worksheet 2-7. 2022 Annualized Estimated Tax WorksheetCapital gains, tax on, Tax on net capital gain.Foreign earned income, Worksheet 2-6.2022 Estimated Tax Worksheet—Line 4 Foreign Earned Income Tax WorksheetForm 1040-ES, Worksheet 2-1.2022 Estimated Tax Worksheet Railroad retirement benefits, Worksheet 2-2.2022 Estimated Tax Worksheet—Line 1 Estimated Taxable Social Security and Railroad Retirement BenefitsSelf-employment tax, Worksheet 2-3.2022 Estimated Tax Worksheet—Lines 1 and 9 Estimated Self-Employment Tax and Deduction WorksheetSocial security benefits, Worksheet 2-2.2022 Estimated Tax Worksheet—Line 1 Estimated Taxable Social Security and Railroad Retirement BenefitsStandard deduction, Worksheet 2-4.2022 Estimated Tax Worksheet—Line 2 Standard Deduction WorksheetExemption from withholding, Exemption From WithholdingClaiming, Claiming exemption from withholding.Good for only one year, An exemption is good for only 1 year.Itemized deductions, Itemizing deductions or claiming credits.Students, Students.ExpensesAllowances, Expense allowances.
FFarmersEstimated tax, Special Rules, Farmers and fishermen., Farmers and FishermenFiscal years, Fiscal year farmers and fishermen.Gross income, Gross income from farming.Joint returns, Joint returns.Required annual payment, Farmers and fishermen.Withholding for farmworkers, Farmworkers.FiguresTables and figures (see Tables and figures)Fiscal yearsEstimated tax, Fiscal-year taxpayers.Farmers and fishermen, Fiscal year farmers and fishermen.FishermenEstimated tax, Special Rules, Farmers and fishermen., Farmers and FishermenFiscal years, Fiscal year farmers and fishermen.Gross income, Gross income from fishing.Joint returns, Joint returns.Required annual payment, Farmers and fishermen.Form 1040-ES, , How To Pay Estimated TaxForm 1040-ES (NR), AliensForm 1041-ES, Estates and TrustsForm 1099 series, Backup WithholdingForm W-2G, Form W-2G.Form W-4 worksheetsTax withholding estimator, Tax Withholding Estimator.Form W-4, Employee's Allowance Withholding Certificate, Determining Amount of Tax Withheld Using Form W-4Form W-4P, Periodic PaymentsForm W-4S, Form W-4S.Form W-4V, Unemployment CompensationForm W-7, Taxpayer identification number (TIN).Form W-9, Withholding rules.FraudForm W-4 statements, Penalties Fringe benefits, Taxable Fringe Benefits, More information.PPart-year method of withholding, Part-Year MethodPatronage dividendsBackup withholding, Backup WithholdingPayment vouchers, Pay by Check or Money Order Using the Estimated Tax Payment VoucherPenalties Backup withholding, Penalties.Willfully false or fraudulent Form W-4, PenaltiesWithholding allowances, PenaltiesPensions, Pensions and AnnuitiesNew job, Employee also receiving pension income.Rollovers, Eligible Rollover DistributionsWages and salaries withholding rules compared, Withholding rules.Publications (see Tax help)RRailroad retirement benefitsChoosing to withhold, Federal PaymentsRegular installment method, estimated tax, Regular Installment MethodReimbursements, Expense allowances.Excess, Accountable plan.ReportingFringe benefits, How your employer reports your benefits.Gambling winnings, Information to give payer.Tips to employer, Reporting tips to your employer.Required annual payment, Required Annual Payment— Line 12c, Example.Retirement plansPension plans, Pensions and AnnuitiesPensions, Pensions and AnnuitiesRollovers, Eligible Rollover DistributionsRollovers, Eligible Rollover DistributionsRoyaltiesBackup withholding, Backup WithholdingSSalaries, Salaries and WagesSaturday, Sunday, holiday rule, Saturday, Sunday, holiday rule.Self-employment tax, Self-employment income.Sick pay, Sick Pay, Estimated tax.Social security benefitsChoosing to withhold, Federal PaymentsSocial security taxesTaxpayer identification numbers (TINs), Taxpayer identification number (TIN).Withholding obligation, RemindersStandard deduction, Standard deduction—line 2a., Line 7.Students, Students.Supplemental wages, Supplemental WagesTTables and figuresDo you have to pay estimated tax? (Figure 2-A), Exemption from withholding on Form W-4 (Figure 1-A), Worksheets, where to find, Worksheets for Chapter 2Tax help, How To Get Tax HelpTax Rate Schedules, 2022 Tax Rate SchedulesTax withholding estimator, Tax Withholding Estimator.Taxpayer identification numbers (TINs), Taxpayer identification number (TIN).Tips, Tips, More information.Total income, Total income.WWages and salaries, Salaries and WagesWithholdingAmount of tax withheld, Form W-4, Determining Amount of Tax Withheld Using Form W-4Annuities, Pensions and AnnuitiesBackup withholding, Backup WithholdingChanging, Changing Your WithholdingChecking amount of, Checking Your WithholdingChoosing not to withhold, Choosing Not To Have Income Tax WithheldCumulative wage method, Cumulative Wage MethodDomestic help, Household workers.Employers' rules, Rules Your Employer Must FollowEstimated tax, Withholding—line 13.Exemption from, Exemption From WithholdingFarmworkers, Farmworkers.Form W-2G, Form W-2G.Form W-4, Determining Amount of Tax Withheld Using Form W-4Fringe benefits, Taxable Fringe BenefitsGambling winnings, Gambling Winnings, Backup withholding on gambling winnings.Getting right amount of tax withheld, Getting the Right Amount of Tax Withheld, Tax Withholding Estimator.Household workers, Household workers.Nonperiodic payments, Nonperiodic PaymentsPart-year method, Part-Year MethodPenalties, PenaltiesPensions, Pensions and AnnuitiesPeriodic payments, Periodic PaymentsRailroad retirement benefits, Federal PaymentsRepaying withheld tax, Repaying withheld tax.Rollovers, Eligible Rollover DistributionsSalaries and wages, Salaries and WagesSick pay, Sick PaySocial security (FICA) tax, Reminders, Federal PaymentsTips, TipsTypes of income, , Salaries and WagesUnemployment compensation, Unemployment CompensationWorksheets (blank)Annualized - Capital gains (Worksheet 2-8), Worksheet 2-8. 2022 Annualized Estimated Tax Worksheet—Line 10 Qualified Dividends and Capital Gain Tax WorksheetAnnualized - Foreign Earned Income (Worksheet 2-9), Worksheet 2-9.2022 Annualized Estimated Tax Worksheet—Line 10 Foreign Earned Income Tax WorksheetAnnualized - Qualified dividends (Worksheet 2-8), Worksheet 2-8. 2022 Annualized Estimated Tax Worksheet—Line 10 Qualified Dividends and Capital Gain Tax WorksheetAnnualized estimated tax (Worksheet 2-7), Worksheet 2-7. 2022 Annualized Estimated Tax Worksheet, Worksheet 2-7. 2022 Annualized Estimated Tax Worksheet (Continued) Dependents (age 65 or older or blind) exemption from withholding (Worksheet 1-2), Worksheet 1-2. Exemption From Withholding for Dependents Age 65 or Older or BlindEstimated tax worksheets (Worksheet 2-1), Worksheet 2-1.2022 Estimated Tax WorksheetForeign earned income (Worksheet 2-6), Worksheet 2-6.2022 Estimated Tax Worksheet—Line 4 Foreign Earned Income Tax WorksheetRailroad retirement benefits (Worksheet 2-2), Worksheet 2-2.2022 Estimated Tax Worksheet—Line 1 Estimated Taxable Social Security and Railroad Retirement BenefitsSelf-employment tax and deduction (Worksheet 2-3), Worksheet 2-3.2022 Estimated Tax Worksheet—Lines 1 and 9 Estimated Self-Employment Tax and Deduction WorksheetSocial security benefits (Worksheet 2-2), Worksheet 2-2.2022 Estimated Tax Worksheet—Line 1 Estimated Taxable Social Security and Railroad Retirement BenefitsStandard deduction (Worksheet 2-4), Worksheet 2-4.2022 Estimated Tax Worksheet—Line 2 Standard Deduction WorksheetPage Last Reviewed or Updated: 15-Mar-2022 When can I use qualified dividends and Capital Gain Tax worksheet?The worksheet is for taxpayers with dividend income only or those whose only capital gains are capital gain distributions reported in box 2a or 2b of Form 1099-DIV that were received from mutual funds, other regulated investment companies, or real estate investment trusts.
How many worksheets are available to compute the qualified dividends and capital gain tax for taxpayers who file Form 1040?Instead, 1040 Line 16 “Tax” asks you to “see instructions.” In those instructions, there is a 25-line worksheet called the Qualified Dividends and Capital Gain Tax Worksheet, which is how you actually calculate your Line 16 tax.
Do qualified dividends count as capital gains?Whereas ordinary dividends are taxable as ordinary income, qualified dividends that meet certain requirements are taxed at lower capital gain rates.
How do you figure tax on qualified dividends?Qualified dividends are taxed at the same rates as the capital gains tax rate; these rates are lower than ordinary income tax rates. The tax rates for ordinary dividends are the same as standard federal income tax rates; 10% to 37%.
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Qualified dividends and capital gain tax worksheet 2022 irs
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