|
|
|
| If
Taxpayer's Income Is... |
Then
Estimated Taxes Are... |
| Between
|
But
Not Over |
Base
Tax |
+
Rate |
Of
the Amount Over |
| $0 |
$14,600 |
$0 |
10% |
$0 |
| $14,600 |
$59,400 |
$1,460.00 |
15% |
$14,600 |
| $59,400 |
$119,950 |
$8,180.00 |
25% |
$59,400 |
| $119,950 |
$182,800 |
$23,317.50 |
28% |
$119,950 |
| $182,800 |
$326,450 |
$40,915.50 |
33% |
$182,800 |
| $326,450 |
-
- - - - |
$88,320.00 |
35% |
$326,450 |
|
Example
#1
John
and Mary Richards, two married taxpayers, have 2005 TAXABLE INCOME
of $130,000. Richards' income falls between:
|
| Between
|
But
Not Over |
Base
Tax |
+
Rate |
Of
the Amount Over |
| $119,950 |
$182,800 |
$23,317.50 |
28% |
$119,950 |
|
John
& Mary Richards' Estimated Taxes
| |
=
Base Tax + (Rate x Amount Over) |
| |
=
$23,317.50 + [.28 x ($130,000 - $119,950)] |
| |
=
$23,317.50 + (.28 x $10,050) |
| |
=
$23,317.50 + $2,814.00 |
| |
=
$26,131.50 |
John
and Mary's total tax dropped $226.00 from their 2004 tax return,
using the 2004 income
tax rate table for joint married taxpayers.
Example
#2
Larry
and Linda Edwards, two married taxpayers filing a joint return,
have combined 2005 TAXABLE INCOME of $185,000. The Edwards' income
falls between:
|
| Between
|
But
Not Over |
Base
Tax |
+
Rate |
Of
the Amount Over |
| $182,800 |
$326,450 |
$40,915.50 |
33% |
$182,800 |
Larry
& Linda Edwards' Estimated Taxes
| |
=
Base Tax + (Rate x Amount Over) |
| |
=
$40,915.50 + [.33 x ($185,000 - $182,800)] |
| |
=
$40,915.50 + (.33 x $2,200) |
| |
=
$40,915.50 + $2,095.50 |
| |
=
$41,641.50 |
Larry
and Linda also experienced tax savings from the previous year.
Their total tax dropped over $433.00 from their 2004 tax return,
using the 2004 income
tax rate table for joint married taxpayers.
|
This equation
does not reflect standard deductions, mortgage deductions, or any other
credits that may decrease your estimated taxable income. Use only for
2005 income taxes. The names mentioned in these samples are fictitious
and not based on any individual. Actual tax tables may apply if your income
is less than $100,000. For illustrative and planning purposes only.
|
