Pub 505 Worksheet 2-9: Annualized Estimated Tax Worksheet

Updated November 4, 2026. Quick answer: Worksheet 2-9 in Publication 505 (2026) is the IRS annualized estimated tax worksheet. For each of four growing periods it scales your income so far up to a full year, figures the tax on that amount, and keeps only the applicable percentage of it (22.5%, 45%, 67.5% and 90%), so an early payment can be smaller than a quarter of the year’s tax when your income arrives late.

When the annualized method applies

The publication opens the method with the case it is built for: “If you don’t 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.” It describes the worksheet’s job this way: “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 4 as if your income was earned equally throughout the year.”

Form 1040-ES describes the same idea: “If you receive your income unevenly throughout the year (for example, because you operate your business on a seasonal basis or you have a large capital gain late in the year), you may be able to lower or eliminate the amount of your required estimated tax payment for one or more periods by using the annualized income installment method.”

Two preconditions come first. “You first must complete the 2026 Estimated Tax Worksheet (Worksheet 2-1) through line 14b.” That is the 2026 Estimated Tax Worksheet. And a filing consequence follows: “If you use the annualized income installment method to figure your estimated tax payments, you must file Form 2210 with your 2026 tax return.” The return side of the method is on Schedule AI.

The four periods and their factors

The columns build on one another: “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.”

Column	Period covered	Annualization amount, lines 2 and 5	Applicable percentage, line 22
(a)	January 1 to March 31	4	22.5%
(b)	January 1 to May 31	2.4	45%
(c)	January 1 to August 31	1.5	67.5%
(d)	January 1 to December 31	1	90%

Each annualization amount equals 12 divided by the months in the period (computed: 12 divided by 3, 5, 8 and 12 months gives 4, 2.4, 1.5 and 1), which is why a total at the end of March is multiplied by 4.

Section A, lines 1 to 11: annualized taxable income

Line	What it asks
1	“Adjusted gross income (AGI) for each period (see instructions). Complete Section B first”
2	Annualization amounts: the four factors in the table above
3	“Annualized income. Multiply line 1 by line 2”
4	“If you itemize, enter itemized deductions for period shown in the column headings (see instructions). All others, enter -0- and skip to line 7”
5	Annualization amounts again, the same four factors
6	“Multiply line 4 by line 5”
7	“Standard deduction from Worksheet 2-4 plus up to $1,000 ($2,000 if married filing jointly) for charitable contributions made by cash or check (see instructions)”
8	“Enter the larger of line 6 or line 7”
9a	“Deduction for qualified business income”
9b	“Additional deductions from Schedule 1-A (Form 1040), line 38”
10	“Add lines 8, 9a, and 9b”
11	“Subtract line 10 from line 3. If zero or less, enter -0-”

Line 4 carries a deduction-limit warning in the instructions: “Be sure to consider deduction limits figured on Schedule A (Form 1040), such as the $40,400 ($20,200 for married individuals filing separately) limit on state and local taxes.” For a standard deduction the instructions say “If you won’t itemize your deductions, use Worksheet 2-4 to figure your standard deduction.” The Worksheet 2-4 page walks through it.

Section A, lines 12 to 23: tax and the applicable percentage

Line	What it asks
12	“Figure your tax on the amount on line 11 (see instructions)”
13	“For each period, enter any tax from Forms 8814, 4972, and 6251. Also, include any recapture of education credits (see instructions)”
14	“Add lines 12 and 13”
15	“Enter nonrefundable credits for each period (see instructions)”
16	“Subtract line 15 from line 14”
17	“Self-employment tax from line 41 of Section B”
18	“Enter other taxes for each period, including, if applicable, Additional Medicare Tax and/or NIIT (see instructions)”
19	“Total tax. Add lines 16, 17, and 18”
20	“Enter refundable credits for each period (see instructions for type of credits allowed). Don’t include any income tax withholding on this line”
21	“Subtract line 20 from line 19. If zero or less, enter -0-”
22	Applicable percentage: 22.5%, 45%, 67.5% and 90% across the four columns
23	“Multiply line 21 by line 22”

Line 12 is the one that sends you to a second worksheet when the annualized income includes investment gains: “If the amount on line 1 includes a net capital gain or qualified dividends, use Worksheet 2-10 to figure the amount to enter on line 12.” The Worksheet 2-10 page covers that sheet. Foreign earned income has its own: “If you expect to claim the foreign earned income exclusion or the housing exclusion or deduction on Form 2555, use Worksheet 2-11 to figure the amount to enter on line 12.”

Section A, lines 24 to 32: the installment

Line	What it asks
24	“Enter the total of the amounts in all previous columns of line 29”
25	“Annualized income installment. Subtract line 24 from line 23. If zero or less, enter -0-”
26	“Enter 25% (0.25) of line 12c of your 2026 Estimated Tax Worksheet (Worksheet 2-1) in each column”
27	“Subtract line 29 of the previous column from line 28 of that column”
28	“Add lines 26 and 27”
29	“Enter the smaller of line 25 or line 28 (see instructions)”
30	“Total required payments for the period. Add lines 24 and 29”
31	“Estimated tax payments made (line 32 of all previous columns) plus tax withholding through the due date for the period (see instructions)”
32	“Estimated tax payment required by the next due date. Subtract line 31 from line 30 and enter the result (but not less than zero) here and on your payment voucher”

The instructions add a safety rule for line 29: “If line 28 is smaller than line 25 and you are not certain of the estimate of your 2026 tax, you can avoid a penalty by entering the amount from line 25 on line 29.” For line 31 they say “One-fourth of your estimated withholding is considered withheld on the due date of each payment period.” The default multipliers for total expected withholding are “25% (0.25) for the first period”, “50% (0.50) for the second period”, “75% (0.75) 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 will be withheld.”

Section B: self-employment tax

If you had self-employment income, the instructions say “first complete Section B of this worksheet”. Section B is marked “Form 1040 or 1040-SR filers only”. Its last results feed Section A twice: line 41 goes to line 17, and line 43 is used for the AGI on line 1.

Line	What it asks
33	“Net earnings from self-employment for the period”
34	“Prorated social security tax limit”: $46,125, $76,875, $123,000 and $184,500 across the four columns
35	“Enter actual wages for the period subject to social security tax or the 6.2% portion of the tier 1 railroad retirement tax.” The line adds an exception for Form 4137 and Form 8919 filers, who are sent to the instructions
36	“Subtract line 35 from line 34. If zero or less, enter -0-”
37	Annualization amounts: 0.496, 0.2976, 0.186 and 0.124
38	“Multiply line 37 by the smaller of line 33 or line 36”
39	Annualization amounts: 0.116, 0.0696, 0.0435 and 0.029
40	“Multiply line 33 by line 39”
41	“Add lines 38 and 40. Enter the result here and on line 17 of Section A”
42	Annualization amounts: 8, 4.8, 3 and 2
43	“Deduction for self-employment tax. Divide line 41 by line 42. Enter the result here. Use this result to figure your AGI on line 1”

The printed factors follow the period factors. The four caps on line 34 are 3, 5, 8 and 12 twelfths of $184,500 (computed: $46,125, $76,875, $123,000 and $184,500). Line 37 is 0.124 times the line 2 factor and line 39 is 0.029 times it (computed: 0.124 times 4 is 0.496, times 2.4 is 0.2976, times 1.5 is 0.186; 0.029 times 4 is 0.116, times 2.4 is 0.0696, times 1.5 is 0.0435). Line 42 is twice the line 2 factor (computed: 8, 4.8, 3 and 2), so dividing line 41 by it brings the figure back to the period and halves it.

Example, annualizing income, invented numbers

Illustration, not an IRS example. Invented inputs, with every result computed from them. Adjusted gross income through each period end is $20,000, $60,000, $130,000 and $150,000.

Line	Entry	(a)	(b)	(c)	(d)
1	Adjusted gross income for the period (invented)	$20,000	$60,000	$130,000	$150,000
2	Annualization amount	4	2.4	1.5	1
3	Line 1 times line 2 (computed)	$80,000	$144,000	$195,000	$150,000

Income bunched in the summer shows up as a high annualized figure in column (c). The tax on each annualized figure comes from lines 4 to 20, which this illustration skips.

Example, the installment lines, invented numbers

Illustration, not an IRS example, and not derived from the first table. Invented inputs: the amount on line 21 for each column, and line 12c of Worksheet 2-1 at $32,000. The filer pays each line 32 amount on the due date and has no withholding. Every other figure is computed.

Line	Entry	(a)	(b)	(c)	(d)
21	Line 19 minus line 20 (invented, lines 4 to 20 skipped)	$3,200	$25,000	$41,000	$36,000
23	Line 21 times line 22 (computed)	$720	$11,250	$27,675	$32,400
24	Total of earlier line 29 amounts (computed)	$0	$720	$11,250	$24,000
25	Line 23 minus line 24 (computed)	$720	$10,530	$16,425	$8,400
26	One quarter of line 12c (line 12c is invented, shown above), so line 26 (computed)	$8,000	$8,000	$8,000	$8,000
27	Earlier line 28 minus earlier line 29 (computed)	$0	$7,280	$4,750	$0
28	Line 26 plus line 27 (computed)	$8,000	$15,280	$12,750	$8,000
29	Smaller of line 25 or line 28 (computed)	$720	$10,530	$12,750	$8,000
30	Line 24 plus line 29 (computed)	$720	$11,250	$24,000	$32,000
31	Payments made on the earlier line 32 amounts (computed)	$0	$720	$11,250	$24,000
32	Line 30 minus line 31 (computed)	$720	$10,530	$12,750	$8,000

The four payments are $720, $10,530, $12,750 and $8,000 (computed). Together they equal line 12c because line 28 caps each column. Under the regular method each of four payments would be $8,000 (computed: one quarter of $32,000). Column (c) shows the safety rule: line 28 is smaller than line 25, so a filer unsure of the estimate may enter line 25 on line 29 to avoid a penalty.

Example, self-employment tax for column (d), invented numbers

Illustration, not an IRS example. Invented inputs: net earnings of $100,000 for the year and no wages subject to social security tax; every other figure is computed.

Line	Entry	Column (d)
33	Net earnings from self-employment for the period (invented)	$100,000
34	Prorated social security tax limit, column (d)	$184,500
35	Wages subject to social security tax (invented)	$0
36	Line 34 minus line 35 (computed)	$184,500
38	0.124 times the smaller of line 33 or line 36 (computed)	$12,400
40	0.029 times line 33 (computed)	$2,900
41	Lines 38 and 40 added (computed)	$15,300
43	Line 41 divided by 2 (computed)	$7,650

Line 41 is the annual self-employment tax figure carried to line 17, and line 43 is the half that is deductible in figuring AGI.

Edition

This page reads Publication 505 (2026), Tax Withholding and Estimated Tax, the file irs.gov served on 2026-11-04 (sha256 in the kit data). Line numbers belong to that edition, so check the label printed on the worksheet in your own copy before you follow a line reference. The tax rate schedules and thresholds on the related sheets are the 2026 ones printed in that edition.

Common mistakes

Putting a full-year estimate in an early column. Each column holds income only through the end of its period, and Section B comes before line 1.
Skipping Form 2210 after using the method. The publication says the form must be filed with the 2026 return.
Treating line 29 as final in an early column. Line 24 carries each earlier line 29 forward, so a low early payment is made up in a later column.
Using the line 2 factors in Section B. Section B has its own printed factors on lines 37, 39 and 42.

Find the right next step for your situation

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Sources

Publication 505 (2026), Tax Withholding and Estimated Tax: https://www.irs.gov/pub/irs-pdf/p505.pdf
Form 1040-ES (2026), Estimated Tax for Individuals: https://www.irs.gov/pub/irs-pdf/f1040es.pdf

Read from the IRS documents linked above on November 4, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.

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