| Publication 505 |
2008 Tax Year |
Publication 505 - Introductory Material
The federal income tax is a pay-as-you-go tax. You must pay the tax as you earn or receive income during the year. There are
two ways to pay as you
go.
-
Withholding. If you are an employee, your employer probably withholds income tax from your pay. In addition, tax may be withheld
from certain other income, including pensions, bonuses, commissions, and gambling winnings. In each case, the amount withheld
is paid to the Internal
Revenue Service (IRS) in your name.
-
Estimated tax. If you do not pay your tax through withholding, or do not pay enough tax that way, you might have to pay estimated
tax. People who are in business for themselves generally will have to pay their tax this way. You may have to pay estimated
tax if you receive income
such as dividends, interest, capital gains, rents, and royalties. Estimated tax is used to pay not only income tax, but self-employment
tax and
alternative minimum tax as well.
This publication explains both of these methods. It also explains how to take credit on your return for the tax that was withheld
and for your
estimated tax payments.
If you did not pay enough tax during the year, either through withholding or by making estimated tax payments, you may have
to pay a penalty.
Generally, the IRS can figure this penalty for you. This underpayment penalty, and the exceptions to it, are discussed in
chapter 4.
Nonresident aliens.
If you are a nonresident alien, see chapter 8 in Publication 519, U.S. Tax Guide for Aliens, for a discussion of
Form 1040-ES (NR) and
withholding.
What's new for 2007 and 2008.
This information is placed in the appropriate chapters. See What's New for 2008 in chapters 1 and 2, and What's New for 2007
in chapters 3 and 4.
Comments and suggestions.
We welcome your comments about this publication and your suggestions for future editions.
You can write to us at the following address:
Internal Revenue Service
Individual Forms and Publications Branch
SE:W:CAR:MP:T:I
1111 Constitution Ave. NW, IR-6526
Washington, DC 20224
We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number,
including the area code, in
your correspondence.
You can email us at
*taxforms@irs.gov. (The asterisk must be included in the
address.) Please put “ Publications Comment” on the subject line. Although we cannot respond individually to each email, we do appreciate your
feedback and will consider your comments as we revise our tax products.
Ordering forms and publications.
Visit
www.irs.gov/formspubs to download forms and publications, call 1-800-829-3676, or write to the address below and receive a response
within 10 days after your request is received.
National Distribution Center
P.O. Box 8903
Bloomington, IL 61702-8903
Tax questions.
If you have a tax question, check the information available on
www.irs.gov or call 1-800-829-1040. We cannot answer tax questions sent to
either of the above addresses.
Social security (FICA) tax.
Generally, each employer for whom you work during the tax year must withhold social security tax
up to the annual limit.
Photographs of missing children. The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of
missing children
selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children
home by looking at the
photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.
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