If you received income in 2015 that wasn't subject to federal income tax withholding, you may have paid the tax you owed in installments. Those estimated tax installments were due in four payments: April, June, and September of 2015, and January of 2016. In most cases, you'll include the total of all four on your return. But some situations require more planning.
For instance, say you filed joint estimates with your spouse for 2015. If you're filing a joint federal income tax return, you'll report the entire amount in the "payments" section. That's true even if your spouse died during the year. But what if you and your spouse decide to file separately for 2015? In that case, you have to decide how to split the joint payments. The two of you can agree to any method you choose.
Can't reach an agreement? You'll have to use a formula. The first step is for you and your spouse to prepare separate returns for 2015, each claiming your own income and deductions. Then you split the estimated tax you paid in proportion to the tax shown on those returns.
Illustration. If the tax on your separate Form 1040 is $4,000, and the tax on your spouse's return is $1,000, you can claim 80% of the 2015 estimates because your tax is 80% of the total owed ($5,000).
Use the same method if you and your spouse got divorced in 2015. In this case, remember to include your spouse's social security number on your return, either in the space on page one or beside the line in the "payments" section of Form 1040. That helps the IRS track the total payments you made.
Did you marry during 2015 and change your name? Attach a statement to your return to claim estimated payments you made under your former name.
For more information about these and other estimated tax rules, contact our office.
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