Line 73 - Amount You Owe

You do not have to pay if Line 73 is under $1.

Include any estimated tax penalty from Line 74 in the amount you enter on Line 73.

You can pay by check, money order, or credit card. Do not include any estimated tax payment in your check, money order, or amount you charge. Instead, make the estimated tax payment separately.

To pay by check or money order. Make your check or money order payable to the �United States Treasury� for the full amount due. Do not send cash. Do not attach the payment to your return. Write �2002 Form 1040� and your name, address, daytime telephone number, and social security number (SSN) on your payment. If you are filing a joint return, enter the SSN shown first on your tax return.

To help us process your payment, enter the amount on the right side of the check like this: $ XXX.XX. Do not use dashes or Lines (for example, do not enter �$ XXX-� or �$ XXX XX/100�).

Then, please complete Form 1040-V following the instructions on that form and enclose it in the envelope with your tax return and payment. Although you do not have to use Form 1040-V, doing so allows us to process your payment more accurately and efficiently.

To Pay by Credit Card. You may use your American Express® Card, Discover® Card, MasterCard®, or Visa® card. To pay by credit card, call toll free or visit the website of either service provider listed on this page 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 the 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 can also find out what the fee will be by calling the provider's toll-free automated customer service number or visiting the provider's Web Site shown below. If you paid by credit card before filing your return, please enter on page 1 of Form 1040 in the upper left corner the confirmation number you were given at the end of the transaction and the amount you charged (not including the convenience fee).

Official Payments Corporation
1-800-2PAY-TAX (1-800-272-9829)
1-877-754-4413 (Customer Service)
www.officialpayments.com

Link2Gov Corporation
1-888-PAY-1040 (1-888-729-1040)
1-888-658-5465 (Customer Service)
www.PAY1040.com

You may need to (a) increase the amount of income tax withheld from your pay by filing a new Form W-4 or (b) make estimated tax payments for 2003. See Income Tax Withholding and Estimated Tax Payments for 2003 on page 59.

What if You Cannot Pay?

If you cannot pay the full amount shown on Line 73 when you file, you may ask to make monthly installment payments. You may have up to 60 months to pay. However, you will be charged interest and may be charged a late payment penalty on the tax not paid by April 15, 2003, even if your request to pay in installments is granted. You must also pay a fee. To limit the interest and penalty charges, pay as much of the tax as possible when you file. But before requesting an installment agreement, you should consider other less costly alternatives, such as a bank loan.

To ask for an installment agreement, use Form 9465. You should receive a response to your request for installments within 30 days. But if you file your return after March 31, it may take us longer to reply.

Line 74 - Estimated Tax Penalty

You may owe this penalty if:

• Line 73 is at least $1,000 and it is more than 10% of the tax shown on your return, or
• You did not pay enough estimated tax by any of the due dates. This is true even if you are due a refund.

For most people, the �tax shown on your return� is the amount on Line 61 minus the total of any amounts shown on Lines 64 and 66 and Forms 8828, 4137, 4136, and 5329 (Parts III, IV, V, VI, and VII only), and 8885. When figuring the amount on line 61, include the amount on line 60 only if line 62 is more than zero or you would owe the penalty even if you did not include those taxes. But if you entered an amount on Schedule H, line 7, include the total of that amount plus the amount on Form 1040, line 60.

Exceptions. You will not owe the penalty if your 2001 tax return was for a tax year of 12 full months AND either of the following applies.

1. You had no tax liability for 2001 and you were a U.S. citizen or resident for all of 2001, or
2. The total of Lines 62, 63, and 65 on your 2002 return is at least as much as the tax liability shown on your 2001 return. Your estimated tax payments for 2002 must have been made on time and for the required amount.

If your 2001 adjusted gross income was over $150,000 (over $75,000 if your 2002 filing status is married filing separately), item 2 above applies only if the total of Lines 62, 63, and 65 on your 2002 return is at least 112% of the tax liability shown on your 2001 return. This rule does not apply to farmers and fishermen.

Figuring the Penalty

If the Exception above do not apply and you choose to figure the penalty yourself, see Form 2210 (or 2210-F for farmers and fishermen) to find out if you owe the penalty. If you do, you can use the form to figure the amount.

Enter the penalty on Line 74. Add the penalty to any tax due and enter the total on Line 73. If you are due a refund, subtract the penalty from the overpayment you show on Line 70. Do not file Form 2210 with your return unless Form 2210 indicates that you must do so. Instead, keep it for your records.

Because Form 2210 is complicated, if you want to, you can leave Line 74 blank and the IRS will figure the penalty and send you a bill. We will not charge you interest on the penalty if you pay by the date specified on the bill. In certain situations, you may be able to lower your penalty, but only by filing Form 2210. For details, see the Instructions for Form 2210.

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