You must pay estimated tax for 2008 if both of the following apply.

Note. These percentages may be different if you are a farmer, fisherman, or higher income taxpayer. See Special Rules on the next page.

You may find Figure 2-A below helpful in determining if you must pay estimated tax.

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

You and your spouse can qualify to make joint estimated tax payments even if you are not living together.

However, you and your spouse cannot make joint estimated tax payments if:

If you do not qualify to make joint estimated tax payments, apply these rules to your separate estimated income.

Making joint or separate estimated tax payments will not affect your choice of filing a joint tax return or separate returns for 2008.

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

Resident and nonresident aliens also may 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.

See Publication 519 for more information about Form 1040-ES (NR) and withholding (chapter 8) and the substantial presence test (chapter 1).

Estates and trusts also must 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 two 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.

Use the worksheet (Figure 2-B) above to help guide you through the information about completing the 2008 Estimated Tax Worksheet. You also will find a blank worksheet on page 33.

Expected AGI—Line 1

Your expected AGI for 2008 (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, do not include income that is tax exempt.

  Total income includes all income and loss for 2008 that, if you had received it in 2007, would have been included on your 2007 tax return in the total on line 22 of Form 1040, line 15 of Form 1040A, or line 4 of Form 1040EZ.

Social security and railroad retirement benefits. If you expect to receive social security or tier 1 railroad retirement benefits during 2008, use Worksheet 2-1 on page 34 to figure the amount of expected taxable benefits you should include on line 1.

Adjustments to income.   Be sure to subtract from your expected total income all of the adjustments you expect to take on your 2008 tax return. If you are using your 2007 return as a guide and filed Form 1040, your adjustments for 2007 were on lines 23-35, plus any write-in adjustments on line 36. If you filed Form 1040A, your 2007 adjustments were on lines 16-19.

Self-employed. If you expect to have income from self-employment, use Worksheet 2-2 on page 34 to figure your expected self-employment tax and your deduction for one-half of your self-employment tax. Include the amount from line 10 of Worksheet 2-2 in your expected adjustments to income. If you file a joint return and both you and your spouse have net earnings from self-employment, each of you must complete a separate worksheet.

Expected Taxable Income— Lines 2-5

Reduce your expected AGI for 2008 (line 1) by either your expected itemized deductions or your standard deduction and by your exemptions (lines 2 through 5).

Itemized deductions—line 2.   If you expect to claim itemized deductions on your 2008 tax return, subtract the estimated amount from your expected AGI.

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

Phaseout of itemized deductions. For 2008, your total itemized deductions may be reduced if your AGI is more than $159,950 ($79,975 if married filing separately). If you expect your AGI to be more than that amount, use Worksheet 2-3 on page 35 to figure the amount to enter on line 2.

Standard deduction—line 2.   If you expect to claim the standard deduction on your 2008 tax return, subtract it from your expected AGI. Use the 2008 Standard Deduction Tables on page 43 to find your standard deduction.

No standard deduction.   The standard deduction for some individuals is zero. Your standard deduction will be zero if you:

• File a separate return and your spouse itemizes deductions,

• Are a dual-status alien, or

• File a return for a period of less than 12 months because you change your accounting period.

Exemptions—line 4.   After you have subtracted either your expected itemized deductions or your standard deduction from your expected AGI, reduce the amount remaining by $3,500 for each exemption you expect to take on your 2008 tax return. If another person (such as your parent) can claim an exemption for you on his or her tax return, you cannot claim your own personal exemption. This is true even if the other person will not claim your exemption or the exemption will be reduced or eliminated under the phaseout rule.

Reduction of personal exemption amount. For 2008, your deduction for personal exemptions is reduced if your AGI is larger than the AGI shown below for your filing status.

Single	$159,950
Married filing jointly or qualifying widow(er)	$239,950
Married filing separately	$119,975
Head of household	$199,950

If you expect your AGI to be more than that amount, use Worksheet 2-4 on page 35 to figure the amount to enter on line 4.

Expected Taxes and Credits—Lines 6-13c

After you have figured your expected taxable income (line 5), follow the steps below to figure your expected taxes, credits, and total tax for 2008. Most people will have entries for only a few of these steps. However, you should check every step to be sure you do not overlook anything.

Step 1.   Figure your expected income tax (line 6). Generally, you will use the 2008 Tax Rate Schedules, found on page 40 or in the instructions to Form 1040-ES, to figure your expected income tax. However, see below for situations where you must use a different method to compute 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 $1,800 of investment income.

1. Children under age 18 at the end of 2008.

2. The following children if their earned income is not more than half their support.

   1. Children age 18 at the end of 2008.

   2. Children over age 18 and under age 24 at the end of 2008 who are full-time students.

See Publication 929, Tax Rules for Children and Dependents. Although the ages and dollar amounts in the publication will be different in the 2008 revision, this reference will give you basic information for figuring the tax.

Tax on net capital gain.   The regular income tax rates for individuals do not 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.   The maximum tax rate for qualified dividends is 15% (generally, 0% for people whose other income is taxed at the 10% or 15% rate).

Tax on capital gain and qualified dividends. If you expect to have a net capital gain or qualified dividends, use Worksheet 2-5 on page 36 to figure your tax.

Tax if excluding foreign earned income or housing. If you expect to claim the foreign earned income exclusion or the housing exclusion on Form 2555 or Form 2555-EZ, use Worksheet 2-6 on page 37 to figure your estimated tax.

Step 2.   Total your expected taxes (line 8). Include on line 8 the sum of:

1. Your tax on line 6;

2. Your expected alternative minimum tax (AMT) from Form 6251 (or included on Form 1040A, line 28) on line 7;

3. Your expected additional taxes from Form 8814, Parents' Election To Report Child's Interest and Dividends, and Form 4972, Tax on Lump-Sum Distributions (line 44, boxes a and b, of the 2007 Form 1040); and

4. Any recapture of education credits.

Step 3.   Subtract your expected credits (line 9). If you are using your 2007 return as a guide and filed Form 1040, your total credits for 2007 were shown on line 56. If you filed Form 1040A, your total credits for 2007 were on line 34.

  If your credits on line 9 are more than your taxes on line 8, enter “-0-” on line 10 and go to Step 4.

Step 4.   Add your expected self-employment tax (line 11). You already should have figured your self-employment tax (see Self-employed under Expected AGI—Line 1 on page 21).

Step 5.   Add your expected other taxes (line 12).

  Other taxes include:

1. Taxes on early distributions from:

   1. An IRA or other qualified plan,

   2. An annuity, or

   3. A modified endowment contract entered into after June 20, 1988;

2. Advance earned income credit payments;

3. Household employment taxes (before subtracting advance EIC payments made to your employee(s)) if:

   1. You will have federal income tax withheld from wages, pensions, annuities, gambling winnings, or other income, or

   2. You would be required to make estimated tax payments even if you did not include household employment taxes when figuring your estimated tax; and

4. Amounts written in on Form 1040, line 63. But, do not include tax on recapture of a federal mortgage subsidy, tax on golden parachute payments, excise tax on insider stock compensation from an expatriated corporation, or uncollected employee social security, Medicare, or RRTA tax on tips or group-term life insurance.

  If you filed a 2007 Form 1040A, your only other tax was any advance earned income credit payments on line 36.

Step 6.   Subtract your expected earned income credit, additional child tax credit, Form 4136 fuel tax credit, Form 8885 health coverage tax credit, and Form 8801 (line 27) refundable credit for prior year minimum tax (line 13b). These are shown on the 2007 Form 1040, lines 66a, 68, 70b, 70c, and 71.

  To figure your expected fuel tax credit, do not include fuel tax for the first three quarters of the year that you expect to have refunded to you.

  The earned income credit is shown on the 2007 Form 1040A, line 40a, and the additional child tax credit is shown on line 41.

  The result of steps 1 through 6 is your total estimated tax for 2008 (line 13c).

You do not have to make estimated tax payments until you have income on which you will owe the 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 can pay all your estimated tax at that time, or you can pay it in installments. If you choose to pay in installments, make your first payment by the due date for the first payment period. Make your remaining installment payments by the due dates for the later periods.

If at least two-thirds of your gross income for 2007 or 2008 is from farming or fishing, you have only one payment due date for your 2008 estimated tax, January 15, 2009. The due dates for the first three payment periods, discussed under When To Pay Estimated Tax on page 23, do not apply to you.

If you file your 2008 Form 1040 by March 2, 2009, and pay all the tax you owe, you do not need to make an estimated tax payment.

If your first estimated tax payment is due April 15, 2008, you can figure your required payment for each period by dividing your annual estimated tax due (line 16a of the 2008 Estimated Tax Worksheet) by 4. Enter this amount on line 17. However, use this method only if your income is basically 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 below.

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.

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 2008 Annualized Estimated Tax Worksheet (Worksheet 2-8) beginning on page 38.

Use the result you figure on line 28 of the Annualized Estimated Tax Worksheet to make your estimated tax payments and complete your payment vouchers.

See Example 2, beginning on page 28, to see how the worksheet is completed.

Instructions for the 2008 Annualized Estimated Tax Worksheet (Worksheet 2-8)

Use Figure 2-C on page 26 to help you follow these instructions. Another worksheet is available for your use on pages 38 and 39.

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 (see page 26) 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.

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Figure 2-C. Worksheet for Annualized Income Installment Method.

Line 1.   Enter your AGI for the 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 AGI—Line 1 on page 21.)

Self-employment income.   If you had self-employment income, first complete Section B of this worksheet. Use the amounts on line 39 when figuring the AGI to enter in each column of Section A, line 1.

Line 4.   Be sure to consider all deduction limits figured on Schedule A, such as reducing your medical expenses by 7.5% of your AGI, or reducing certain miscellaneous deductions by 2% of your AGI. Figure your deduction limits using your expected AGI in the corresponding column of line 1 (2008 Annualized Estimated Tax Worksheet).

Line 6.   Multiply line 4 by line 5 and enter the result on line 6, unless line 3 is more than $159,950 ($79,975 if married filing separately). In that case, use Worksheet 2-9 on page 39 to figure the amount to enter on line 6. Complete this worksheet for each period, as necessary.

Line 7.   If you will not itemize your deductions, see the 2008 Standard Deduction Tables on page 43. Find your standard deduction in the appropriate table.

Line 10.   Multiply $3,500 by your total expected exemptions, unless line 3 is more than the amount shown below for your filing status.

Single		$159,950
Married filing jointly or qualifying widow(er)		$239,950
Married filing separately		$119,975
Head of household		$199,950

  In that case, use Worksheet 2-10 on page 40 to figure the amount to enter on line 10.

Line 12.   Generally, you will use the 2008 Tax Rate Schedules on page 40 or in the instructions to Form 1040-ES to figure your annualized income tax. However, see below for situations where you must use a different method to compute 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 $1,800 investment income.

1. Children under age 18 at the end of 2008.

2. The following children if their earned income is not more than half their support.

   1. Children age 18 at the end of 2008.

   2. Children over age 18 and under age 24 at the end of 2008 who are full-time students.

   See Publication 929.

Tax on net capital gain.   The regular income tax rates for individuals do not 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.   Generally, the maximum tax rate for qualified dividends is 15% (0% for people whose other income is taxed at the 10% or 15% rate).

Tax on capital gain and qualified dividends. If the amount on line 1 includes capital gains or qualified dividends, use Worksheet 2-11 on page 41 to figure the amount to enter on line 12.

Tax if excluding foreign earned income or housing. If you expect to claim the foreign earned income exclusion or the housing exclusion on Form 2555 or Form 2555-EZ, use Worksheet 2-12 on page 42 to figure the amount to enter on line 12.

Line 13.   Enter your self-employment tax for the period from Section B, line 37.

Line 14.   Include all the taxes you expect to owe (other than income tax and self-employment tax) because of events that occurred during the period. These taxes include:

• Tax on early distributions from qualified plans, including IRAs and other tax favored accounts,

• Advance earned income credit payments,

• Tax from Form 4972,

• Tax from Form 8814,

• Tax from recapture of an education credit,

• Household employment taxes that are reported on your income tax return, and

• Amounts written in on Form 1040, line 63 (but see Exceptions below).

Exceptions.   Do not include tax on recapture of a federal mortgage subsidy, tax on golden parachute payments, excise tax on insider stock compensation from an expatriated corporation, and any uncollected social security, Medicare, or railroad retirement tax on tips or group-term life insurance.

Alternative minimum tax (AMT).   Use Form 6251 to see if you also owe the AMT. Figure alternative minimum taxable income 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 2008 Annualized Estimated Tax Worksheet. Include any AMT owed in the amount on line 14 of this worksheet.

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 2007 return as a guide and filed Form 1040, your 2007 credits included the total credits on line 56, and the credits shown on lines 66a, 68, 70 boxes b and c, and 71. If you filed Form 1040A, your 2007 credits included the credits on lines 34, 40a, and 41.

Line 25.   If line 24 is smaller than line 21 and you are not certain of the estimate of your 2008 tax, you can avoid a penalty by entering the amount from line 21 on line 25.

Line 27.   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 27 for each period, multiply your total expected withholding for 2008 by:

• 25% (.25) for the first period,

• 50% (.50) for the second period,

• 75% (.75) for the third period, and

• 100% (1.00) for the fourth period.

  However, you may choose to include your withholding according to the actual dates on which the amounts were withheld. For each period, include payments 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 16a on page 23.

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 the worksheet column for that period in 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 column (a).

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 column (b).

   2. 45% for column (c).

   3. 30% for column (d).

   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.

4. On line 22, enter one-half of the amount from line 16c of the Form 1040-ES (NR) 2008 Estimated Tax Worksheet in column (b), and one-fourth in columns (c) and (d).

5. On lines 20 and 23, skip column (b).

6. On line 27, if you do not use the actual withholding method, include one-half of your total expected withholding in column (b) and one-fourth in columns (c) and (d).

See Publication 519 for more information.

You do not have to pay estimated tax if your withholding in each payment period is at least as much as:

You also do not have to pay estimated tax if you will pay enough through withholding to keep the amount you will owe with your return under $1,000.

If you show an overpayment of tax after completing your Form 1040 or Form 1040A for 2007, you can apply part or all of it to your estimated tax for 2008. On line 75 of Form 1040, or line 45 of Form 1040A, enter the amount you want credited to your estimated tax rather than refunded. The amount you have credited should be taken into account when figuring your estimated tax payments.

If you are a beneficiary of an estate or trust, and the trustee elects to credit 2008 trust payments of estimated tax to you, you can treat the amount credited as paid by you on January 15, 2009.

The credit will be applied to your payments in the order necessary to avoid the penalty for underpayment of estimated tax. You cannot have any of that amount refunded to you until the close of that tax year. You also cannot use that overpayment in any other way.

Each payment of estimated tax by check or money order must be accompanied by a payment voucher from Form 1040-ES. If you made estimated tax payments last year, you should receive a copy of the 2008 Form 1040-ES in the mail. It will have payment vouchers preprinted with your name, address, and social security number. Using the preprinted vouchers will speed processing, reduce the chance of error, and help save processing costs.

If you did not pay estimated tax last year, you will have to get a copy of Form 1040-ES from the IRS (see chapter 5). Follow the instructions in the package to make sure you use the vouchers correctly.

Use the window envelopes that came with your Form 1040-ES package. If you use your own envelopes, 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 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.

EFTPS is a free tax payment system designed with all taxpayers in mind. Online or by phone, you input your tax payment information electronically and you are done. EFTPS offers you convenience. Through EFTPS, you can schedule one-time or recurring payments for withdrawal from your checking or savings account up to 365 days in advance. You also can modify or cancel payments up to 2 business days before the scheduled withdrawal date. To use EFTPS, you must enroll. Enroll online at www.eftps.gov or call 1-800-555-4477 (for business accounts) or 1-800-316-6541 (for individual accounts) to receive an enrollment form and instructions by mail. TTY/TDD help is available by calling 1-800-733-4829. Call 1-800-244-4829 for Spanish.

If you electronically file your 2007 tax return, you can make up to four (4) 2008 estimated tax payments by EFW. This is a free option. The payments can be withdrawn from either a checking or savings account. At the same time you file your return, you may schedule estimated tax payments for any or all of the following dates: April 15, 2008, June 16, 2008, September 15, 2008, and January 15, 2009.

Check with your tax return preparer or tax preparation software for details. Your scheduled payments will be acknowledged when you file your tax return.

Payments scheduled through EFW can be cancelled up to 8 p.m. Eastern time, 2 business days before the scheduled payment date, by contacting the U.S. Treasury Financial Agent at 1-888-353-4537.

You can use your American Express® Card, Discover® Card, MasterCard® card, or Visa® card to make estimated tax payments. Call toll-free or visit the website of either service provider listed below and follow the instructions. A convenience fee will be charged by the service provider based on the amount you are paying. Fees may vary between providers. You will be told what the fee is during the transaction and you will have the option to either continue or cancel the transaction. You also can find out what the fee will be by calling the provider's toll-free automated customer service number or visiting the provider's website shown below.

Early in 2008, Anne and Larry Jones figure their estimated tax payments for the year. They expect to receive the following income during 2008.

They also use the following expected items to figure their estimated tax.

The Joneses plan to file a joint return. They use the 2008 Estimated Tax Worksheet included in Form 1040-ES to figure their estimated tax payments. See their filled-in worksheet (Figure 2-D) on page 30.

The facts are the same as in Example 1—Regular Installment Method, except that the Joneses do not expect to receive their income evenly throughout the year. Anne expects to receive the largest portion of her self-employment income during the last few months of the year, and the Joneses' rental income is from a vacation home rented only in the summer months.

After completing their 2008 Estimated Tax Worksheet, the Joneses decide to use the annualized income installment method to see if they can pay less than $2,382 estimated tax for one or more payment periods. They complete the 2008 Annualized Estimated Tax Worksheet (Worksheet 2-8) in this chapter. See their filled-in worksheet (Figure 2-E) on page 31.

Second, Third, and Fourth Periods

After the end of each remaining payment period, the Joneses complete the column of the worksheet for that period (from the beginning of the year through the end of that payment period) in the same way they did for the first period. They had the following income for each period.

	Second Period	Third Period	Fourth Period
	Jan. 1- May 31	Jan. 1- Aug. 31	Jan. 1- Dec. 31
Larry's salary	$14,958	$23,933	$35,900
Unemployment compensation	600	600	600
Anne's net profit from self-employment	6,000	16,000	40,100
Net rental income	696	2,784	2,784
Interest income	1,575	3,250	6,205
Total	$23,829	$46,567	$85,589

They also take into account the following items for each period.

	Second Period	Third Period	Fourth Period
	Jan. 1- May 31	Jan. 1- Aug. 31	Jan. 1- Dec. 31
Adjustment to income for IRA contributions	$ 250	$ 400	$1,000
Itemized deductions	2,970	7,025	11,525

For the second period, as for the first, the annualized income installment method allows the Joneses to pay less than their required payment under the regular installment method of figuring estimated tax payments. They make up the difference in the third and fourth periods when their income is higher.

Because the Joneses are using the annualized income installment method, they will file Form 2210 with their tax return for 2008.

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Figure 2-D. Illustrated Example 1--Regular Installment Method (Anne and Larry Jones)

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Figure 2-E. Illustrated Example 2--Annualized Income Installment Method (Anne and Larry Jones)

Worksheets for Chapter 2

Table 2-2. Where To Find Worksheets Use the following worksheets and tables to figure your correct estimated tax.

IF you need...	THEN use...	ON page...
the 2008 Estimated Tax Worksheet (ES Worksheet)		21, 33
to estimate your taxable social security and railroad retirement benefits—line 1 of ES Worksheet	Worksheet 2-1	34
to estimate your self-employment (SE) tax and your deduction for one-half of your SE tax—lines 1 and 11 of ES Worksheet	Worksheet 2-2	34
to reduce your itemized deductions because your estimated AGI is more than $159,950 ($79,975 if married filing separately)—line 2 of ES Worksheet	Worksheet 2-3	35
to reduce your exemption amount because your estimated AGI is more than $119,975 —line 4 of ES Worksheet	Worksheet 2-4	35
to estimate your income tax if you have net capital gains or qualified dividends—line 6 of ES Worksheet	Worksheet 2-5	36
to estimate your income tax if you expect to claim a foreign earned income exclusion or housing exclusion on Form 2555 or Form 2555-EZ—line 6 of ES Worksheet	Worksheet 2-6	37
to refigure your estimated tax during the year	Worksheet 2-7	37
to figure your annualized estimated tax payments	Worksheet 2-8	38-39
to reduce your itemized deductions for line 6 of Worksheet 2-8 because line 3 of Worksheet 2-8 is more than $159,950 ($79,975 if married filing separately)	Worksheet 2-9	39
to reduce your exemptions for line 10 of Worksheet 2-8 because line 3 of Worksheet 2-8 is more than $119,975	Worksheet 2-10	40
to estimate your income tax for line 12 of Worksheet 2-8 if estimated income includes capital gains or qualified dividends	Worksheet 2-11	41
to estimate your income tax for line 12 of Worksheet 2-8 if you expect to claim a foreign earned income exclusion or housing exclusion on Form 2555 or Form 2555-EZ	Worksheet 2-12	42
2008 Tax Rate Schedules		40
2008 Standard Deduction Tables		43

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2008 Estimated Tax Worksheet

Worksheet 2-1. 2008 Estimated Tax Worksheet—Line 1 Expected Taxable Social Security and Railroad Retirement Benefits

1.	Enter your expected social security and railroad retirement benefits	1.
2.	Enter one-half of line 1			2.
3.	Enter your expected total income. Do not include any social security and railroad retirement benefits, nontaxable interest income, nontaxable IRA distributions, or nontaxable pension distributions			3.
4.	Enter your expected nontaxable interest income			4.
5.	Enter the total of any exclusions or adjustments for: Qualified U.S. savings bond interest Adoption benefits Foreign earned income or housing Certain income of bona fide residents of American Samoa or Puerto Rico			5.
6.	Add lines 2, 3, 4, and 5			6.
7.	Enter your expected adjustments to income. Do not include any student loan interest deduction or domestic production activities deduction.			7.
8.	Subtract line 7 from line 6. If zero or less, stop here. Do not include any social security or railroad retirement benefits in the amount on line 1 of your 2008 Estimated Tax Worksheet			8.
9.	Enter $25,000 ($32,000 if you expect to file married filing jointly; $0 if you expect to file married filing separately and expect to live with your spouse at any time during the year)			9.
10.	Subtract line 9 from line 8. If zero or less, stop here. Do not include any social security or railroad retirement benefits in the amount on line 1 of your 2008 Estimated Tax Worksheet			10.
11.	Enter $9,000 ($12,000 if you expect to file married filing jointly; $0 if you expect to file married filing separately and expect to live with your spouse at any time during the year)			11.
12.	Subtract line 11 from line 10. If zero or less, enter -0-			12.
13.	Enter the smaller of line 10 or line 11			13.
14.	Enter one-half of line 13			14.
15.	Enter the smaller of line 2 or line 14			15.
16.	Multiply line 12 by 85% (.85). If line 12 is zero, enter -0-			16.
17.	Add lines 15 and 16			17.
18.	Multiply line 1 by 85% (.85)			18.
19.	Expected taxable social security and railroad retirement benefits. Enter the smaller of line 17 or line 18. Include this amount in the total on line 1 of your 2008 Estimated Tax Worksheet			19.

Worksheet 2-2. 2008 Estimated Tax Worksheet—Lines 1 and 11 Expected Self-Employment Tax and Deduction

1.	Enter your expected income and profits subject to self-employment tax*			1.
2.	Multiply line 1 by 92.35% (.9235)			2.
3.	Multiply line 2 by 2.9% (.029)			3.
4.	Social security tax maximum income	4.	$102,000
5.	Enter your expected wages (if subject to social security tax or the 6.2% portion of tier 1 railroad retirement tax)	5.
6.	Subtract line 5 from line 4	6.
	Note. If line 6 is zero or less, enter -0- on line 8 and skip to line 9.
7.	Enter the smaller of line 2 or line 6	7.
8.	Multiply line 7 by 12.4% (.124)			8.
9.	Add line 3 and line 8. Enter the result here and on line 11 of your 2008 Estimated Tax Worksheet			9.
10.	Multiply line 9 by .50. This is your expected deduction for one-half of your self-employment tax. Subtract this amount when figuring your expected AGI on line 1 of your 2008 Estimated Tax Worksheet.	10.

*Your net profit from self-employment is found on Schedule C, line 31; Schedule C-EZ, line 3; Schedule F, line 36; Schedule K-1 (Form 1065), box 14, code A; and Schedule K-1 (Form 1065-B), box 9, code J1.

Worksheet 2-3. 2008 Estimated Tax Worksheet—Line 2 Phaseout of Itemized Deductions

1.	Enter the estimated total of your itemized deductions (after applying any limits, such as the 7.5%-of-AGI limit on medical expenses)			1.
2.	Enter the amount included in line 1 for medical and dental expenses, investment interest, casualty or theft losses, and gambling losses (after applying the same limits used in line 1)			2.
3.	Subtract line 2 from line 1			3.
	Note. If line 3 is zero or less, your deduction is not limited. Stop here and enter line 1 of this worksheet on line 2 of your 2008 Estimated Tax Worksheet.
4.	Multiply line 3 by 80% (.80)	4.
5.	Enter the amount from line 1 of the 2008 Estimated Tax Worksheet	5.
6.	Enter $159,950 ($79,975 if married filing separately)	6.
7.	Subtract line 6 from line 5	7.
	Note. If line 7 is zero or less, your deduction is not limited. Stop here and enter line 1 of this worksheet on line 2 of your 2008 Estimated Tax Worksheet.
8.	Multiply line 7 by 3% (.03)	8.
9.	Enter the smaller of line 4 or line 8			9.
10.	Divide line 9 by 1.5.			10.
11.	Subtract line 10 from line 9			11.
12.	Total itemized deductions. Subtract line 11 from line 1. Enter the result here and on line 2 of your 2008 Estimated Tax Worksheet			12.

Worksheet 2-4. 2008 Estimated Tax Worksheet—Line 4 Reduction of Exemption Amount

1.	Multiply $3,500 by the number of exemptions you plan to claim				1.
2.	Enter the amount from line 1 of your 2008 Estimated Tax Worksheet		2.
3.	Enter the amount shown below for your filing status.
	Single—$159,950
	Married filing jointly or qualifying widow(er)—$239,950
	Married filing separately—$119,975
	Head of household—$199,950		3.
4.	Subtract line 3 from line 2		4.
5.	Is line 4 more than $122,500 (more than $61,250 if married filing separately)?
		Yes. Multiply $2,333 by the number of exemptions you plan to claim and enter the result here and on line 4 of your 2008 Estimated Tax Worksheet. Do not complete the rest of this worksheet.
		No. Divide line 4 by $2,500 ($1,250 if married filing separately). If the result is not a whole number, increase it to the next higher whole number (for example, increase 0.0004 to 1)	5.
6.	Multiply line 5 by 2% (.02). Enter the result as a decimal				6.	.
7.	Multiply line 1 by line 6				7.
8.	Divide line 7 by 3.0				8.
9.	Deduction for exemptions. Subtract line 8 from line 1. Enter the result here and on line 4 of your 2008 Estimated Tax Worksheet				9.

Worksheet 2-5. 2008 Estimated Tax Worksheet—Line 6 Qualified Dividends and Capital Gain Tax Worksheet

1.	Enter the amount from line 5 of your 2008 Estimated Tax Worksheet (or if using Worksheet 2-6, enter the amount from line 3 of Worksheet 2-6)					1.
2.	Enter your expected qualified dividends for 2008 1	2.
3.	Enter the net capital gain expected for 2008 1	3.
4.	Add lines 2 and 3			4.
5.	Enter your 28% rate gain or loss expected for 2008 2	5.
6.	Enter the unrecaptured section 1250 gain expected for 2008	6.
7.	Add lines 5 and 6	7.
8.	Enter the smaller of line 3 or line 7			8.
9.	Subtract line 8 from line 4					9.
10.	Subtract line 9 from line 1. If zero or less, enter -0-			10.
11.	Enter the smaller of line 1 or $65,100 ($32,550 if single or married filing separately, or $43,650 if head of household)	11.
12.	Enter the smaller of line 10 or line 11	12.
13.	Subtract line 4 from line 1. If zero or less, enter -0-	13.
14.	Enter the larger of line 12 or line 13					14.
	Note.If line 11 and line 12 are the same, skip line 15 and go to line 16.
15.	Subtract line 12 from line 11					15.
	Note. If lines 1 and 11 are the same, skip lines 16-28 and go to line 29.
16.	Enter the smaller of line 1 or line 9			16.
17.	Enter the amount from line 15. If line 15 is blank, enter -0-			17.
18.	Subtract line 17 from line 16. If zero or less, enter -0-					18.
19.	Multiply line 18 by 15% (.15)							19.
	Note.If line 6 is zero or blank, skip lines 20-25 and go to line 26.
20.	Enter the smaller of line 3 or line 6			20.
21.	Add lines 4 and 14	21.
22.	Enter the amount from line 1 above	22.
23.	Subtract line 22 from line 21. If zero or less, enter -0-			23.
24.	Subtract line 23 from line 20. If zero or less, enter -0-					24.
25.	Multiply line 24 by 25% (.25)							25.
	Note.If line 5 is zero or blank, skip lines 26-28 and go to line 29.
26.	Add lines 14, 15, 18, and 24					26.
27.	Subtract line 26 from line 1					27.
28.	Multiply line 27 by 28% (.28)							28.
29.	Figure the tax on the amount on line 14 from the 2008 Tax Rate Schedules							29.
30.	Add lines 19, 25, 28, and 29							30.
31.	Figure the tax on the amount on line 1 from the 2008 Tax Rate Schedules							31.
32.	Tax on all taxable income (including capital gains and qualified dividends). Enter the smaller of line 30 or line 31 here and on line 6 of the 2008 Estimated Tax Worksheet (or if using Worksheet 2-6, enter on line 4 of Worksheet 2-6)							32.

1 If you expect to deduct investment interest expense, do not include on this line any qualified dividends or net capital gain that you will elect to treat as investment income.

2 This includes a section 1202 exclusion from eligible gain on qualified small business stock and gain or loss from the sale or exchange of collectibles. See the instructions for Schedule D (Form 1040) for more information.

Worksheet 2-6. 2008 Estimated Tax Worksheet—Line 6 Foreign Earned Income Tax Worksheet

	Before you begin: If line 5 of your 2008 Estimated Tax Worksheet is zero, do not complete this worksheet.
1.	Enter the amount from line 5 of your 2008 Estimated Tax Worksheet						1.
2.	Enter the total foreign earned income and housing amount you (and your spouse if filing jointly) expect to exclude in 2008 on Form 2555 or Form 2555-EZ						2.
3.	Add lines 1 and 2						3.
4.	Tax on the amount on line 3. Use the 2008 Tax Rate Schedules or Worksheet 2-5,* as appropriate						4.
5.	Tax on the amount on line 2. Use the 2008 Tax Rate Schedules						5.
6.	Subtract line 5 from line 4. Enter the result here and on line 6 of your 2008 Estimated Tax Worksheet. If zero or less, enter -0-						6.
*If using Worksheet 2-5 (Qualified Dividends and Capital Gain Tax Worksheet), enter the amount from line 3 above on line 1 of Worksheet 2-5. Complete Worksheet 2-5 through line 9. Next, determine if you have a capital gain excess.
Figuring capital gain excess. To find out if you have a capital gain excess, subtract line 5 of your 2008 Estimated Tax Worksheet from line 9 of Worksheet 2-5. If the result is more than zero, that amount is your capital gain excess.
No capital gain excess. If you do not have a capital gain excess, complete the rest of Worksheet 2-5 according to its instructions. Then complete lines 5 and 6 above.
Capital gain excess. If you have a capital gain excess, complete a second Worksheet 2-5 as instructed above but in its entirety and with the following additional modifications. Then complete lines 5 and 6 above.
	Make these modifications only for purposes of filling out Worksheet 2-6 above.
	a. Reduce the amount you otherwise would enter on line 3 of Worksheet 2-5 (but not below zero) by your capital gain excess.
	b. Reduce the amount you otherwise would enter on line 2 of Worksheet 2-5 (but not below zero) by any of your capital gain excess not used in (a) above.
	c. Reduce the amount you otherwise would enter on line 5 of Worksheet 2-5 (but not below zero) by your capital gain excess.
	d. Reduce the amount you otherwise would enter on line 6 of Worksheet 2-5 (but not below zero) by your capital gain excess.

Worksheet 2-7. Amended Estimated Tax Worksheet

1.	Amended total estimated tax due				1.
2.	Multiply line 1 by:
	50% (.50) if next payment is due June 16, 2008
	75% (.75) if next payment is due September 15, 2008
	100% (1.00) if next payment is due January 15, 2009		2.
3.	Estimated tax payments made for all previous periods		3.
4.	Next required payment: Subtract line 3 from line 2 and enter the result (but not less than zero) here and on your payment voucher for your next required payment		4.
	Note.If the payment on line 4 is due January 15, 2009, stop here. Otherwise, go to line 5.
5.	Add lines 3 and 4				5.
6.	Subtract line 5 from line 1 and enter the result (but not less than zero)				6.
7.	Each following required payment: If the payment on line 4 is due June 16, 2008, enter one-half of the amount on line 6 here and on the payment vouchers for your payments due September 15, 2008, and January 15, 2009. If the amount on line 4 is due September 15, 2008, enter the full amount on line 6 here and on the payment voucher for your payment due January 15, 2009				7.

Worksheet 2-8. 2008 Annualized Estimated Tax Worksheet

Note.For instructions, see Annualized Income Installment Method in chapter 2.

Section A (For Figuring Your Annualized Estimated Tax Payments)—Complete each column after end of period shown.
Estates and trusts: Use the following ending dates in columns (a)-(d)—2/29, 4/30, 7/31, 11/30.				(a) 1/1/08 to 3/31/08	(b) 1/1/08 to 5/31/08	(c) 1/1/08 to 8/31/08	(d) 1/1/08 to 12/31/08
1	Adjusted gross income (AGI) for each period. (Caution: See instructions.) Self-employed: Complete Section B first		1
2	Annualization amounts		2	4	2.4	1.5	1
3	Annualized income. Multiply line 1 by line 2		3
4	Itemized deductions for period (see instructions). If you do not expect to itemize, enter -0- and skip to line 7		4
5	Annualization amounts		5	4	2.4	1.5	1
6	Multiply line 4 by line 5. (Caution: See instructions and Worksheet 2-9.)		6
7	Standard deduction from 2008 tables		7
8	Enter the larger of line 6 or line 7		8
9	Subtract line 8 from line 3		9
10	Multiply $3,500 by your total expected exemptions. (Caution: See instructions and Worksheet 2-10.)		10
11	Subtract line 10 from line 9		11
12	Tax on the amount on line 11 from the 2008 Tax Rate Schedules. (Caution: See instructions and Worksheets 2-11 and 2-12.)		12
13	Self-employment tax from line 37 of Section B		13
14	Other taxes for each payment period		14
15	Total tax. Add lines 12, 13, and 14		15
16	Credits for each period. (Caution: See instructions.) Do not include any income tax withholding on this line		16
17	Subtract line 16 from line 15. (If less than zero, enter -0-.)		17
18	Applicable percentage		18	22.5%	45%	67.5%	90%
19	Multiply line 17 by line 18		19
20	Add amounts on line 25 of all preceding columns		20
21	Annualized income installment. Subtract line 20 from line 19. (If less than zero, enter -0-.)		21
22	Enter 25% (.25) of line 14c of the Form 1040-ES Estimated Tax Worksheet in each column		22
23	Subtract line 25 of preceding column from line 24 of preceding column		23
24	Add lines 22 and 23		24
25	Enter the smaller of line 21 or line 24. (Caution: See instructions.)		25
26	Total required payments for the period. Add lines 20 and 25		26
27	Estimated tax payments made (line 28 of preceding columns) and tax withholding through the due date for the period		27
28	Estimated tax payment required by the next due date. Subtract line 27 from line 26 and enter the result (but not less than zero) here and on your payment voucher		28

(Continued on next page)

Worksheet 2-8. 2008 Annualized Estimated Worksheet(Continued)

Section B (For Figuring Your Annualized Estimated Self-Employment Tax)—Complete each column after end of period shown.
				(a) 1/1/08 to 3/31/08	(b) 1/1/08 to 5/31/08	(c) 1/1/08 to 8/31/08	(d) 1/1/08 to 12/31/08
29	Net earnings from self-employment for the period		29
30	Prorated social security tax limit		30	$25,500	$42,500	$68,000	$102,000
31	Enter actual wages for the period subject to social security tax or the 6.2% portion of the 7.65% railroad retirement (tier 1) tax		31
32	Subtract line 31 from line 30. If zero or less, enter -0-		32
33	Annualization amounts		33	0.496	0.2976	0.186	0.124
34	Multiply line 33 by the smaller of line 29 or line 32		34
35	Annualization amounts		35	0.116	0.0696	0.0435	0.029
36	Multiply line 29 by line 35		36
37	Add lines 34 and 36. Enter the result here and on line 13 of Section A		37
38	Annualization amounts		38	8	4.8	3	2
39	Deduction for one-half of self-employment tax. Divide line 37 by line 38. Enter the result here. Use this result to figure your AGI on line 1		39

Worksheet 2-9. 2008 Annualized Estimated Tax Worksheet—Line 6 Phaseout of Itemized Deductions

1.	Enter line 4 of Section A			1.
2.	Enter the amount included in line 1 for medical and dental expenses, investment interest, casualty or theft losses, and gambling losses (after applying the same limits used in line 1)			2.
3.	Subtract line 2 from line 1			3.
4.	Enter line 5 of Section A			4.
5.	Multiply line 1 by line 4			5.
	Note.If line 3 is zero or less, your deduction is not limited. Stop here and enter line 5 above on line 6 of Section A.
6.	Multiply line 3 by line 4			6.
7.	Multiply line 6 by 80% (.80)	7.
8.	Enter line 3 of Section A	8.
9.	Enter $159,950 ($79,975 if married filing separately)	9.
10.	Subtract line 9 from line 8	10.
	Note. If line 10 is zero or less, your deduction is not limited. Stop here and enter line 5 of this worksheet on line 6 of Section A.
11.	Multiply line 10 by 3% (.03)	11.
12.	Enter the smaller of line 7 or line 11			12.
13.	Divide line 12 by 1.5			13.
14.	Subtract line 13 from line 12			14.
15.	Total itemized deductions. Subtract line 14 from line 5. Enter the result here and in the appropriate column of Section A, line 6			15.

Worksheet 2-10. 2008 Annualized Estimated Tax Worksheet—Line 10 Reduction of Exemption Amount

1.	Multiply $3,500 by the number of exemptions you plan to claim				1.
2.	Enter line 3 of Section A		2.
3.	Enter the amount shown below for your filing status
	Single—$159,950 Married filing jointly or qualifying widow(er)—$239,950 Married filing separately—$119,975 Head of household—$199,950		3.
4.	Subtract line 3 from line 2		4.
5.	Is line 4 more than $122,500 (more than $61,250 if married filing separately)?
		Yes. Multiply $2,333 by the number of exemptions you plan to claim and enter the result here and on line 10 of Section A. Do not complete the rest of this worksheet.
		No. Divide line 4 by $2,500 ($1,250 if married filing separately). If the result is not a whole number, increase it to the next higher whole number (for example, increase 0.0004 to 1)	5.
6.	Multiply line 5 by 2% (.02). Enter the result as a decimal				6.	.
7.	Multiply line 1 by line 6				7.
8.	Divide line 7 by 3.0				8.
9.	Deduction for exemptions. Subtract line 8 from line 1. Enter the result here and in the appropriate column of Section A, line 10				9.

2008 Tax Rate Schedules

Caution.Do not use these Tax Rate Schedules to figure your 2007 taxes. Use them only to figure your 2008 estimated taxes.

Schedule X—Use if your 2008 filing status is Single							Schedule Z—Use if your 2008 filing status is Head of household
If line 5 is:		The tax is:				of the	If line 5 is:		The tax is:				of the
Over—	But not over—					amount over—	Over—	But not over—					amount over—
$0	$8,025			10%		$0	$0	$11,450			10%		$0
8,025	32,550	$802.50	+	15%		8,025	11,450	43,650	$1,145.00	+	15%		11,450
32,550	78,850	4,481.25	+	25%		32,550	43,650	112,650	5,975.00	+	25%		43,650
78,850	164,550	16,056.25	+	28%		78,850	112,650	182,400	23,225.00	+	28%		112,650
164,550	357,700	40,052.25	+	33%		164,550	182,400	357,700	42,755.00	+	33%		182,400
357,700	- - - - - -	103,791.75	+	35%		357,700	357,700	- - - - - -	100,604.00	+	35%		357,700
Schedule Y-1—Use if your 2008 filing status is Married filing jointly or Qualifying widow(er)							Schedule Y-2—Use if your 2008 filing status is Married filing separately
If line 5 is:		The tax is:				of the	If line 5 is:		The tax is:				of the
Over—	But not over—					amount over—	Over—	But not over—					amount over—
$0	$16,050			10%		$0	$0	$8,025			10%		$0
16,050	65,100	$1,605.00	+	15%		16,050	8,025	32,550	$802.50	+	15%		8,025
65,100	131,450	8,962.50	+	25%		65,100	32,550	65,725	4,481.25	+	25%		32,550
131,450	200,300	25,550.00	+	28%		131,450	65,725	100,150	12,775.00	+	28%		65,725
200,300	357,700	44,828.00	+	33%		200,300	100,150	178,850	22,414.00	+	33%		100,150
357,700	- - - - - -	96,770.00	+	35%		357,700	178,850	- - - - - -	48,385.00	+	35%		178,850

Worksheet 2-11. 2008 Annualized Estimated Tax Worksheet—Line 12 Qualified Dividends and Capital Gain Tax Worksheet

	Note. To figure the annualized entries for lines 2, 3, 5, and 6 below, multiply the expected amount for the period by the annualization amount on line 2 of Worksheet 2-8 for the same period.
1.	Enter line 11 of your 2008 Annualized Estimated Tax Worksheet (or if using Worksheet 2-12, enter the amount from line 3 of Worksheet 2-12)					1.
2.	Enter your annualized qualified dividends expected for 2008 1	2.
3.	Enter the annualized net capital gain expected for 2008 1	3.
4.	Add lines 2 and 3			4.
5.	Enter your annualized 28% rate gain or loss expected for 2008 2	5.
6.	Enter the annualized unrecaptured section 1250 gain expected for 2008	6.
7.	Add lines 5 and 6	7.
8.	Enter the smaller of line 3 or line 7			8.
9.	Subtract line 8 from line 4					9.
10.	Subtract line 9 from line 1. If zero or less, enter -0-			10.
11.	Enter the smaller of line 1 or $65,100 ($32,550 if single or married filing separately, or $43,650 if head of household)	11.
12.	Enter the smaller of line 10 or line 11	12.
13.	Subtract line 4 from line 1. If zero or less, enter -0-	13.
14.	Enter the larger of line 12 or line 13					14.
	Note.If line 11 and line 12 are the same, skip line 15 and go to line 16.
15.	Subtract line 12 from line 11					15.
	Note.If lines 1 and 11 are the same, skip lines 16-28 and go to line 29.
16.	Enter the smaller of line 1 or line 9			16.
17.	Enter the amount from line 15. If line 15 is blank, enter -0-			17.
18.	Subtract line 17 from line 16. If zero or less, enter -0-					18.
19.	Multiply line 18 by 15% (.15)							19.
	Note.If line 6 is zero or blank, skip lines 20-25 and go to line 26.
20.	Enter the smaller of line 3 or line 6			20.
21.	Add lines 4 and 14	21.
22.	Enter the amount from line 1 above	22.
23.	Subtract line 22 from line 21. If zero or less, enter -0-			23.
24.	Subtract line 23 from line 20. If zero or less, enter -0-					24.
25.	Multiply line 24 by 25% (.25)							25.
	Note.If line 5 is zero or blank, skip lines 26-28 and go to line 29.
26.	Add lines 14, 15, 18, and 24					26.
27.	Subtract line 26 from line 1					27.
28.	Multiply line 27 by 28% (.28)							28.
29.	Figure the tax on the amount on line 14 from the 2008 Tax Rate Schedules							29.
30.	Add lines 19, 25, 28, and 29							30.
31.	Figure the tax on the amount on line 1 from the 2008 Tax Rate Schedules							31.
32.	Tax on all taxable income (including capital gains and qualified dividends). Enter the smaller of line 30 or line 31 here and in the appropriate column of the 2008 Annualized Estimated Tax Worksheet, line 12 (or if using Worksheet 2-12, enter on line 4 of Worksheet 2-12)							32.

1 If you expect to deduct investment interest expense, do not include on this line any qualified dividends or net capital gain that you will elect to treat as investment income.

2 This includes a section 1202 exclusion from eligible gain on qualified small business stock and gain or loss from the sale or exchange of collectibles. See the instructions for Schedule D (Form 1040) for more information.

Worksheet 2-12. 2008 Annualized Estimated Tax Worksheet—Line 12 Foreign Earned Income Tax Worksheet

	Before you begin:	If line 11 of Worksheet 2-8 (2008 Annualized Estimated Tax Worksheet) is zero for the period, do not complete this worksheet.
1.	Enter the amount from line 11 of your 2008 Annualized Estimated Tax Worksheet for the period						1.
2.	Enter the annualized amount* of foreign earned income and housing amount you (and your spouse if filing jointly) expect to exclude for the period on Form 2555 or Form 2555-EZ						2.
3.	Add lines 1 and 2						3.
4.	Tax on the amount on line 3. Use the 2008 Tax Rate Schedules or Worksheet 2-11,** as appropriate						4.
5.	Tax on the amount on line 2. Use the 2008 Tax Rate Schedules						5.
6.	Subtract line 5 from line 4. Enter the result here and on line 12 of your 2008 Annualized Estimated Tax Worksheet (Worksheet 2-8). If zero or less, enter -0-						6.
* To figure the annualized amount for line 2, multiply the expected exclusion for the period by the annualization amount on line 2 of Worksheet 2-8 for the same period.
**If using Worksheet 2-11 (Qualified Dividends and Capital Gain Tax Worksheet), enter the amount from line 3 above on line 1 of Worksheet 2-11. Complete Worksheet 2-11 through line 9. Next, determine if you have a capital gain excess.
Figuring capital gain excess. To find out if you have a capital gain excess for the appropriate period, subtract line 11 of Worksheet 2-8 from line 9 of Worksheet 2-11. If the result is more than zero, that amount is your capital gain excess.
No capital gain excess. If you do not have a capital gain excess, complete the rest of Worksheet 2-11 according to its instructions. Then complete lines 5 and 6 above.
Capital gain excess. If you have a capital gain excess, complete a second Worksheet 2-11 as instructed above but in its entirety and with the following additional modifications. Then complete lines 5 and 6 above.
	Make these modifications only for purposes of filling out Worksheet 2-12 above.
	a. Reduce the amount you otherwise would enter on line 3 of Worksheet 2-11 (but not below zero) by your capital gain excess.
	b. Reduce the amount you otherwise would enter on line 2 of Worksheet 2-11 (but not below zero) by any of your capital gain excess not used in (a) above.
	c. Reduce the amount you otherwise would enter on line 5 of Worksheet 2-11 (but not below zero) by your capital gain excess.
	d. Reduce the amount you otherwise would enter on line 6 of Worksheet 2-11 (but not below zero) by your capital gain excess.