After you have figured your 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 do not pay enough during any payment period, you may be charged a penalty even if you are due a refund when you file your tax return. The penalty is discussed in chapter 4.

Regular Installment Method

If your first estimated tax payment is due April 16, 2001, you can figure your required payment for each period by dividing your total estimated tax due (line 16 of the 2001 Estimated Tax Worksheet) by 4. Use this method only if your required annual payment stays the same throughout the year.

If you do not 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.

Amended estimated tax. If you refigure your estimated tax during the year, or if your first estimated tax payment is due after April 16, 2001, figure your required payment for each remaining payment period using the following worksheet.

Worksheet 2.6

1.	Amended total estimated tax due
2.	Multiply line 1 by:
		.50 if next payment is due June 15, 2001
		.75 if next payment is due September 17, 2001
		1.00 if next payment is due January 15, 2002
3.	Estimated tax payments for all previous periods
4.	Next required payment: Subtract line 3 from line 2 and enter the result (but not less than zero) here and on your payment-voucher for your next required payment
If the payment on line 4 is due January 15, 2002, stop here. Otherwise, go on to line 5.
5.	Add lines 3 and 4
6.	Subtract line 5 from line 1 and enter the result (but not less than zero)
7.	Each following required payment: If the payment on line 4 is due June 15, 2001, enter one-half of the amount on line 6 here and on the payment-vouchers for your payments due September 17, 2001, and January 15, 2002. If the amount on line 4 is due September 17, 2001, enter the full amount on line 6 here and on the payment-voucher for your payment due January 17, 2002

Example 2.7. Early in 2001, Mira figures her estimated tax due is $1,800. She makes estimated tax payments on April 16 and June 15 of $450 each ($1,800 x 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, figured as follows.

Filled-in Worksheet 2.6 for Mira
(Example 2.7)

1.	Amended total estimated tax due		$4,100
2.	Multiply line 1 by:
		.50 if next payment is due June 15, 2001
		.75 if next payment is due September 17, 2001
		1.00 if next payment is due January 15, 2002	3,075
3.	Estimated tax payments for all previous periods		900
4.	Next required payment: Subtract line 3 from line 2 and enter the result (but not less than zero) here and on your payment-voucher for your next required payment		$2,175
If the payment on line 4 is due January 15, 2002, stop here. Otherwise, go on to line 5.
5.	Add lines 3 and 4		3,075
6.	Subtract line 5 from line 1 and enter the result (but not less than zero)		1,025
7.	Each following required payment: If the payment on line 4 is due June 15, 2001, enter one-half of the amount on line 6 here and on the payment-vouchers for your payments due September 17, 2001, and January 15, 2002. If the amount on line 4 is due September 17, 2001, enter the full amount on line 6 here and on the payment-voucher for your payment due January 15, 2002		$1,025

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

File Form 2210 to avoid penalty. If your estimated tax payment for a previous period is less than one-fourth of your amended estimated tax, you may be charged a penalty for underpayment of estimated tax for that period when you file your tax return. To avoid the penalty, you must file Form 2210 with your 2001 tax return. You must also show that the total of your withholding and estimated tax payment for the period was at least as much as your annualized income installment. See chapter 4 for more information.

Annualized Income Installment Method

If you do not receive your income evenly throughout the year (for example, your income from a repair shop you operate is much larger in the summer than it is during the rest of the year), your required estimated tax payment for one or more periods may be less than the amount figured using the regular installment method.

To see if you can pay less for any period, complete the blank 2001 Annualized Estimated Tax Worksheet (Worksheet 2.10) later in this chapter. (Note. You must first complete the 2001 Estimated Tax Worksheet through line 16.) The worksheet 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 since the beginning of the tax year through the end of the period. Use the result you figure on line 26d to make your estimated tax payments and complete your payment-vouchers.

See Example 2.10 for an illustration of the worksheet.

Annualized Estimated Tax Worksheets

Annualized Estimated Tax Worksheets (continued)

Note. If you use the annualized income installment method to figure your estimated tax payments, you must file Form 2210 with your 2001 tax return. See Annualized Income Installment Method in chapter 4 for more information.

Instructions For Worksheet 2.10

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 worksheet column for the period from the beginning of the tax year through the end of that payment period to figure the payment due for that period.

Line 1. Enter your adjusted gross income for each period. This is your gross income, including your share of partnership or S corporation income or loss, for the period, minus your adjustments to income for that period. (See Expected Adjusted Gross Income under How To Figure Estimated Tax, earlier.)

Self-employment income. If you had self-employment income, first complete Section B. Use the amounts on line 35c to figure your adjusted gross income on line 1.

Line 4. Be sure to consider all deduction limits figured on Schedule A, lines 1 - 27.

Line 6. Multiply line 4 by line 5 and enter the result on line 6, unless line 3 is more than $132,950 ($66,475 if married filing separately). In that case, use the following worksheet to figure the amount to enter on line 6. Complete this worksheet for each period.

Worksheet 2.7

1.	Enter the amount from line 4 of Section A
2.	Enter the amount included in line 1 for medical and dental expenses, investment interest, casualty or theft losses, and gambling losses
3.	Subtract line 2 from line 1
4.	Enter the number from line 5 of Section A
5.	Multiply the amount on line 1 by the number on line 4
Note. If the amount on line 3 is zero, stop here and enter the amount from line 5 on line 6 of Section A.
6.	Multiply the amount on line 3 by the number on line 4
7.	Multiply the amount on line 6 by .80
8.	Enter the amount from line 3 of Section A
9.	Enter $132,950 ($66,475 if married filing separately)
10.	Subtract line 9 from line 8
11.	Multiply the amount on line 10 by .03
12.	Enter the smaller of line 7 or line 11
13.	Subtract line 12 from line 5. Enter the result here and on line 6 of Section A

Line 7. See the 2001 Standard Deduction Tables at the end of this chapter. Find your standard deduction in the appropriate table.

Line 10. Multiply $2,900 by your total expected exemptions, unless line 3 is more than the amount shown for your filing status in the following table.

Table 2.5

	Single	$132,950
	Married filing jointly or qualifying widow(er)	$199,450
	Married filing separately	$ 99,725
	Head of household	$166,200

In that case, use the following worksheet to figure the amount to enter on line 10.

Worksheet 2.8

1.	Multiply $2,900 by your total expected exemptions
2.	Enter the amount from line 3 of Section A
3.	Enter the amount shown for your filing status from Table 2.5
4.	Subtract line 3 from line 2
5.	Divide the amount on line 4 by $2,500 ($1,250 if married filing separately). If the result is not a whole number, increase it to the next whole number
6.	Multiply the number on line 5 by .02. Enter the result as a decimal, but not more than 1
7.	Multiply the amount on line 1 by the decimal on line 6
8.	Subtract line 7 from line 1. Enter the result here and on line 10 of Section A

Line 12. Use the 2001 Tax Rate Schedules at the end of this chapter or in the instructions to Form 1040-ES to figure your annualized income tax. For the special method that must be used to figure tax on the income of a child under 14 who has more than $1,400 investment income, see Tax on Investment Income of Child Under 14 in Publication 929, Tax Rules for Children and Dependents.

Capital gains tax computation. The 31%, 36%, and 39.6% income tax rates for individuals do not apply to a net capital gain. In some cases, the 15% and 28% rates do not apply either. 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.

The maximum rate may be 8%, 10%, 20%, 25%, or 28%, or a combination of those rates.

Use the following worksheet to figure the amount to enter on line 12 if the amount on line 1 includes capital gain.

Worksheet 2.9

1.	Enter the amount from line 11 of your 2001 Annualized Estimated Tax Worksheet (Worksheet 2.10)
2.	Enter your annualized net capital gain expected for 2001
3.	Combine your annualized net short-term capital loss and 28% rate gain or loss expected for 2001. If zero or less, enter 0
4.	Enter the unrecaptured section 1250 gain expected for 2001
5.	Add lines 3 and 4
6.	Subtract line 5 from line 2. If zero or less, enter 0
7.	Subtract line 6 from line 1. If zero or less, enter 0
8.	Enter the smaller of line 1 or $45,200 ($27,050 if single; $22,600 if married filing separately; $36,250 if head of household)
9.	Enter the smaller of line 7 or line 8
10.	Subtract line 2 from line 1. If zero or less, enter 0
11.	Enter the larger of line 9 or line 10
12.	Tax on amount on line 11 from the 2001 Tax Rate Schedule
	Note. If line 7 is more than line 8, go to line 20.
13.	Enter the amount from line 8
14.	Enter the amount from line 7
15.	Subtract line 14 from line 13. If zero or less, enter 0
16.	Multiply line 15 by 10% (.10)
17.	Enter the amount, if any, of your qualified 5-year gain. Do not enter more than the amount on line 15.
18.	Multiply line 17 by 2% (.02)
19.	Subtract line 18 from line 16
	Note. If line 15 minus line 17 is more than zero and equal to line 6, enter 0 on lines 23, 29, and 33, and go to line 34.
20.	Enter the smaller of line 1 or line 6
21.	Enter the amount from line 15
22.	Subtract line 21 from line 20
23.	Multiply line 22 by 20% (.20)
	Note. If line 4 is zero or blank, skip lines 24 through 29 and read the note above line 30.
24.	Enter the smaller of line 2 or line 4
25.	Add lines 2 and 11
26.	Enter the amount from line 1
27.	Subtract line 26 from line 25. If zero or less, enter 0
28.	Subtract line 27 from line 26. If zero or less, enter 0
29.	Multiply line 28 by 25% (.25)
	Note. If line 3 is zero or blank, go to line 34
30.	Enter the amount from line 1
31.	Add lines 11, 15, 22, and 28
32.	Subtract line 31 from line 30. If zero or less, enter 0
33.	Multiply line 32 by 28% (.28)
34.	Add lines 12, 19, 23, 29, and 33
35.	Tax on the amount on line 1 from the 2001 Tax Rate Schedule
36.	Tax. Enter the smaller of line 34 or line 35 here and on line 12 of the 2001 Annualized Estimated Tax Worksheet

A collectibles gain or loss is any gain or loss from the sale or exchange of a work of art, rug, antique, metal, gem, stamp, coin, or alcoholic beverage or other collectible that is a capital asset and that was held more than one year.

Line 13. Enter your self-employment tax for each period from line 35a.

Line 14. Include all the taxes you will owe (other than income tax and self-employment tax) because of events that occurred during the period. These include the taxes shown on lines 40 and 41 of the 2000 Form 1040, plus any tax on early distributions and any tax on certain taxable distributions from IRAs included on line 54, any advance earned income credit payments on line 55, generally any household employment taxes on line 56, and any write-in amounts on line 57 (other than recapture of a federal mortgage subsidy and any uncollected social security, Medicare, or railroad retirement tax).

If you filed a 2000 Form 1040A, "other tax" is any advance earned income credit payments on line 34.

Line 16. Include all the credits (other than withholding credits) you can claim because of events that occurred during the period. If you are using your 2000 return as a guide and filed Form 1040, your 2000 credits included the credits on lines 60a, 61, and 64, and the credits that are included in the total on line 50. If you filed Form 1040A, your 2000 credits included the credits on lines 32, 37a, and 38a.

Line 26a. If line 24 is smaller than line 21 and line 22 is based on an estimate of your 2001 tax, the amount of which is not certain, to avoid a penalty you may want to enter on this line the amount from line 21.

Line 26c. Include all estimated tax payments actually made and federal income tax withholding through the payment due date for the period. Also include excess social security and excess railroad retirement for the period.

Your withholding is considered paid in four equal installments, one on the due date of each payment period. To figure the amount to include on line 26c for each period, multiply your total expected withholding for 2001 by:

1. 25% (.25) for the first period,
2. 50% (.50) for the second period,
3. 75% (.75) for the third period, or
4. 100% (1.00) for the fourth period.

You may choose to include your actual withholding through the due date for each period on line 26c. 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 under How To Figure Estimated Tax, earlier.

Section B. If you had income from self-employment during any period, complete the worksheet column for that period to figure your annualized self-employment tax before you complete Section A.

Nonresident aliens. If you will file Form 1040NR and you do not receive wages as an employee subject to U.S. income tax withholding, the instructions for the worksheet are modified as follows.

1. Skip the first column.
2. On line 1, enter your income for the period that is effectively connected with a U.S. trade or business.
3. On line 17, increase your entry by the amount determined by multiplying your income for the period that is not effectively connected with a U.S. trade or business by the following:
   1. 72% for the second column,
   2. 45% for the third column, and
   3. 30% for the fourth column.

      However, if you can use a treaty rate lower than 30%, use the percentages determined by multiplying your treaty rate by 2.4, 1.5, and 1, respectively, instead of the above percentages.

4. On line 22, enter one-half of the amount from line 16c of the Form 1040-ES(NR) 2001 Estimated Tax Worksheet in the second column, and one-fourth in the third and fourth columns.
5. On lines 20 and 23, skip column (b).
6. On line 26c, if you do not use the actual withholding method, include one-third of your total expected withholding in the second column and two-thirds in the third and fourth columns.

See Publication 519 for more information.

Estimated Tax Payments Not Required

You do not have to make estimated tax payments if your withholding in each payment period is at least one-fourth of your required annual payment or at least your required annualized income installment for that period. You also do not have to make estimated tax payments if you will pay enough through withholding to keep the amount you will owe with your return under $1,000.

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