Figure 2-E, Annualized Income Installment Method—Illustrated Example 2 (Anne and Larry Jones). Summary: This is an example of the 2008 Annualized Estimated Tax Worksheet for Figure 2-E, Annualized Income Installment Method—Illustrated Example 2 (Anne and Larry Jones). The completed line items are:

Under “Section A (For Figuring Your Annualized Estimated Tax Payments)”:

“1. Adjusted gross income (AGI) for each period. (Caution: See instructions.) Self-employed: Complete Section B first.”

“(a) 1/1/08-3/31/08” field contains 13,203

“(b) 1/1/08-5/31/08” field contains 23,155

“(c) 1/1/08-8/31/08” field contains 45,037

“(d) 1/1/08-12/31/08” field contains 81,756

“3. Annualized income. Multiply line 1 by line 2”

“(a) 1/1/08-3/31/08” field contains 52,812

“(b) 1/1/08-5/31/08” field contains 55,572

“(c) 1/1/08-8/31/08” field contains 67,556

“(d) 1/1/08-12/31/08” field contains 81,756

“4. Itemized deductions for period. If you do not expect to itemize, enter 0 and skip to line 7. ”

“(a) 1/1/08-3/31/08” field contains 1,300

“(b) 1/1/08-5/31/08” field contains 2,970

“(c) 1/1/08-8/31/08” field contains 7,025

“(d) 1/1/08-12/31/08” field contains 11,525

“6. Multiply line 4 by line 5 (Caution: See instructions and Worksheet 2-9)”

“(a) 1/1/08-3/31/08” field contains 5,200

“(b) 1/1/08-5/31/08” field contains 7,128

“(c) 1/1/08-8/31/08” field contains 10,538

“(d) 1/1/08-12/31/08” field contains 11,525

“7. Standard deduction from 2008 tables.”

“(a) 1/1/08-3/31/08” field contains 10,900

“(b) 1/1/08-5/31/08” field contains 10,900

“(c) 1/1/08-8/31/08” field contains 10,900

“(d) 1/1/08-12/31/08” field contains 10,900

“8. Enter the larger of line 6 or line 7”

“(a) 1/1/08-3/31/08” field contains 10,900

“(b) 1/1/08-5/31/08” field contains 10,900

“(c) 1/1/08-8/31/08” field contains 10,900

“(d) 1/1/08-12/31/08” field contains 11,525

“9. Subtract line 8 from line 3”

“(a) 1/1/08-3/31/08” field contains 41,912

“(b) 1/1/08-5/31/08” field contains 44,672

“(c) 1/1/08-8/31/08” field contains 56,656

“(d) 1/1/08-12/31/08” field contains 70,231

“10. Multiply $3,500 by your total expected exemptions. (Caution: See instructions and Worksheet 2-10.)”

“(a) 1/1/08-3/31/08” field contains 7,000

“(b) 1/1/08-5/31/08” field contains 7,000

“(c) 1/1/08-8/31/08” field contains 7,000

“(d) 1/1/08-12/31/08” field contains 7,000

“11. Subtract line 10 from line 9”

“(a) 1/1/08-3/31/08” field contains 34,912

“(b) 1/1/08-5/31/08” field contains 37,672

“(c) 1/1/08-8/31/08” field contains 49,656

“(d) 1/1/08-12/31/08” field contains 63,231

“12. Tax on the amount on line 11 from the 2008 Tax Rate Schedules. (Caution: See instructions and Worksheet 2-11.)”

“(a) 1/1/08-3/31/08” field contains 4,434

“(b) 1/1/08-5/31/08” field contains 4,848

“(c) 1/1/08-8/31/08” field contains 6,646

“(d) 1/1/08-12/31/08” field contains 8,682

“13. Self-employment tax from line 37 of Section B.”

“(a) 1/1/08-3/31/08” field contains 1,695

“(b) 1/1/08-5/31/08”field contains 2,035

“(c) 1/1/08-8/31/08” field contains 3,391

“(d) 1/1/08-12/31/08” field contains 5,666

“15. Total tax. Add lines 12, 13, and 14”

“(a) 1/1/08-3/31/08” field contains 6,129

“(b) 1/1/08-5/31/08” field contains 6,883

“(c) 1/1/08-8/31/08” field contains 10,037

“(d) 1/1/08-12/31/08” field contains 14,348

“17. Subtract line 16 from line 15. (If zero or less, enter 0.)”

“(a) 1/1/08-3/31/08” field contains 6,129

“(b) 1/1/08-5/31/08” field contains 6,883

“(c) 1/1/08-8/31/08” field contains 10,037

“(d) 1/1/08-12/31/08” field contains 14,348

“19. Multiply line 17 by line 18”

“(a) 1/1/08-3/31/08” field contains 1,379

“(b) 1/1/08-5/31/08” field contains 3,097

“(c) 1/1/08-8/31/08” field contains 6,775

“(d) 1/1/08-12/31/08” field contains 12,913

“20. Add amounts on line 25 of all preceding columns.”

“(b) 1/1/08-5/31/08” field contains 1,379

“(c) 1/1/08-8/31/08” field contains 3,097

“(d) 1/1/08-12/31/08” field contains 6,775

“21. Annualized income installment. Subtract line 20 from line 19. (If less than zero, enter 0.)”

“(a) 1/1/08-3/31/08” field contains 1,379

“(b) 1/1/08-5/31/08” field contains 1,718

“(c) 1/1/08-8/31/08” field contains 3,678

“(d) 1/1/08-12/31/08” field contains 6,138

“22. Enter 25% of line 14c of the Form 1040-ES Estimated Tax Worksheet in each column.”

“(a) 1/1/08-3/31/08” field contains 3,228

“(b) 1/1/08-5/31/08” field contains 3,228

“(c) 1/1/08-8/31/08” field contains 3,228

“(d) 1/1/08-12/31/08” field contains 3,228

“23. Subtract line 25 of preceding column from line 24 of preceding column.”

“(b) 1/1/08-5/31/08” field contains 1,849

“(c) 1/1/08-8/31/08” field contains 3,359

“(d) 1/1/08-12/31/08” field contains 2,909

“24. Add lines 22 and 23.”

“(a) 1/1/08-3/31/08” field contains 3,228

“(b) 1/1/08-5/31/08” field contains 5,077

“(c) 1/1/08-8/31/08” field contains 6,587

“(d) 1/1/08-12/31/08” field contains 6,137

“25. Enter the smaller of line 21 or line 24. (Caution: See instructions.)”

“(a) 1/1/08-3/31/08” field contains 1,379

“(b) 1/1/08-5/31/08” field contains 1,718

“(c) 1/1/08-8/31/08” field contains 3,678

“(d) 1/1/08-12/31/08” field contains 6,137

“26. Total required payments for the period. Add lines 20 and 25.”

“(a) 1/1/08-3/31/08” field contains 1,379

“(b) 1/1/08-5/31/08” field contains 3,097

“(c) 1/1/08-8/31/08” field contains 6,775

“(d) 1/1/08-12/31/08” field contains 12,912

“27. Estimated tax payments made (line 28 of preceding columns) and tax withholding through the due date for the period.”

“(a) 1/1/08-3/31/08” field contains 846

“(b) 1/1/08-5/31/08” field contains 2,225

“(c) 1/1/08-8/31/08” field contains 3,943

“(d) 1/1/08-12/31/08” field contains 7,621

“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.”

“(a) 1/1/08-3/31/08” field contains 533

“(b) 1/1/08-5/31/08” field contains 872

“(c) 1/1/08-8/31/08” field contains 2,832

“(d) 1/1/08-12/31/08” field contains 5,291

Under “Section B (For Figuring Your Annualized Estimated Self-Employment Tax)”:

“29. Net earnings from self-employment for the period.”

“(a) 1/1/08-3/31/08” field contains 2,771

“(b) 1/1/08-5/31/08” field contains 5,541

“(c) 1/1/08-8/31/08” field contains 14,776

“(d) 1/1/08-12/31/08” field contains 37,032

“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.”

“(a) 1/1/08-3/31/08” field contains 0

“(b) 1/1/08-5/31/08” field contains 0

“(c) 1/1/08-8/31/08” field contains 0

“(d) 1/1/08-12/31/08” field contains 0

“32. Subtract line 31 from line 30. If zero or less, enter 0.”

“(a) 1/1/08-3/31/08” field contains 25,500

“(b) 1/1/08-5/31/08” field contains 42,500

“(c) 1/1/08-8/31/08” field contains 68,000

“(d) 1/1/08-12/31/08” field contains 102,000

“34. Multiply line 33 by the smaller of line 29 or line 32.”

“(a) 1/1/08-3/31/08” field contains 1,374

“(b) 1/1/08-5/31/08” field contains 1,649

“(c) 1/1/08-8/31/08” field contains 2,748

“(d) 1/1/08-12/31/08” field contains 4,592

“36. Multiply line 29 by line 35.”

“(a) 1/1/08-3/31/08” field contains 321

“(b) 1/1/08-5/31/08” field contains 386

“(c) 1/1/08-8/31/08” field contains 643

“(d) 1/1/08-12/31/08” field contains 1,074

“37. Add lines 34 and 36. Enter the result here and on line 13 of Section A.”

“(a) 1/1/08-3/31/08” field contains 1,695

“(b) 1/1/08-5/31/08” field contains 2,035

“(c) 1/1/08-8/31/08” field contains 3,391

“(d) 1/1/08-12/31/08” field contains 5,666

“39. Deduction for one-half of self-employment tax. Divide line 37 by line 38. Enter the result here. Also use this result to figure your AGI on line 1.”

“(a) 1/1/08-3/31/08” field contains 212

“(b) 1/1/08-5/31/08” field contains 424

“(c) 1/1/08-8/31/08” field contains 1,130

“(d) 1/1/08-12/31/08” field contains 2,833