Department of the Treasury

Internal Revenue Service

2024 Instructions for Schedule﻿ ﻿J

Income Averaging for Individuals With Income from Farming or Fishing

Cat. No. 25514J

Sep 25, 2024

Department of the Treasury

Internal Revenue Service

2024 Instructions for Schedule J

Income Averaging for Individuals With Income from Farming or Fishing

Use Schedule﻿ ﻿J (Form 1040) to elect to figure your 2024 income tax by averaging, over the previous 3 years (base years), all or part of your 2024 taxable income from your trade or business of farming or fishing. This election may give you a lower tax if your 2024 income from farming or fishing is high and your taxable income for 1 or more of the 3 prior years was low.

In order to qualify for this election, you aren't required to have been in the business of farming or fishing during any of the base years.

You may elect to average farming or fishing income even if your filing status wasn't the same in the election year and the base years.

This election doesn't apply when figuring your alternative minimum tax on Form 6251. Also, you don't have to refigure, because of this election, the tax liability of any minor child who was required to use your tax rates in the prior years.

Section references are to the Internal Revenue Code unless otherwise noted.

Future Developments

For the latest information about developments related to Schedule﻿ ﻿J (Form 1040) and its instructions, such as legislation enacted after they were published, go to IRS.gov/ScheduleJ.

What’s New

Schedule﻿ ﻿J (Form 1040) title changed. The title for Schedule﻿ ﻿J (Form 1040) was changed from “Income Averaging For Farmers and Fishermen” to “Income Averaging for Individuals With Income from Farming or Fishing.”

General Instructions

Prior Year Tax Returns

You may need copies of your original or amended income tax returns for 2021, 2022, and 2023 to figure your tax on Schedule﻿ ﻿J.

If you need copies of your tax returns, use Form 4506. There is a fee for each return requested. See Form 4506 for the fee amount. If your main home, principal place of business, or tax records are located in a federally declared disaster area, this fee will be waived. If you want a free transcript of your tax return or account, use Form 4506-T. See the Instructions for Form 1040 to find out how to get these forms.

Keep a copy of your 2024 income tax return to use for income averaging in 2025, 2026, or 2027.

Note. For tax years beginning in 2022, the filing status “Qualifying widow(er)” is called “Qualifying surviving spouse.” The rules for the filing status have not changed. The same rules that applied for Qualifying widow(er) apply to Qualifying surviving spouse. We will match the term to the year of use throughout these instructions.

Definitions

Farming business.

A farming business is the trade or business of cultivating land or raising or harvesting any agricultural or horticultural commodity. This includes:

Operating a nursery or sod farm;

Raising or harvesting of trees bearing fruits, nuts, or other crops;

Raising ornamental trees (but not evergreen trees that are more than 6 years old when severed from the roots);

Raising, shearing, feeding, caring for, training, and managing animals; and

Leasing land to a tenant engaged in a farming business, but only if the lease payments are (a) based on a share of the tenant's production (not a fixed amount), and (b) determined under a written agreement entered into before the tenant begins significant activities on the land.

A farming business doesn't include:

Contract harvesting of an agricultural or horticultural commodity grown or raised by someone else, or

Merely buying or reselling plants or animals grown or raised by someone else.

Fishing business.

A fishing business is the trade or business of fishing in which the fish harvested, either in whole or in part, are intended to enter commerce or enter commerce through sale, barter, or trade. This includes:

The catching, taking, or harvesting of fish;

The attempted catching, taking, or harvesting of fish;

Any other activity that can reasonably be expected to result in the catching, taking, or harvesting of fish;

Any operations at sea in support of, or in preparation for, any activity described in (1) through (3) above;

Leasing a fishing vessel, but only if the lease payments are (a) based on a share of the catch (or a share of the proceeds from the sale of the catch) from the lessee's use of the vessel in a fishing business (not a fixed payment), and (b) determined under a written lease entered into before the lessee begins any significant fishing activities resulting in the catch; and

Compensation as a crew member on a vessel engaged in a fishing business, but only if the compensation is based on a share of the catch (or a share of the proceeds from the sale of the catch).

The word “fish” means finfish, mollusks, crustaceans, and all other forms of marine animal and plant life other than marine mammals and birds.

A fishing business doesn't include any scientific research activity conducted by a scientific research vessel.

Additional Information

See Pub. 225 and Regulations section 1.1301﻿-﻿1 for more information.

Specific Instructions

Line 2a

Elected Farm Income

To figure your elected farm income, first figure your taxable income from farming or fishing. This includes all income, gains, losses, and deductions attributable to your farming or fishing business. If you conduct both farming and fishing businesses, you must figure your elected farm income by combining income, gains, losses, and deductions attributable to your farming and fishing businesses.

Elected farm income also includes any gain or loss from the sale or other disposition of property regularly used in your farming or fishing business for a substantial period of time. However, if such gain or loss is realized after cessation of the farming or fishing business, the gain or loss is treated as attributable to a farming or fishing business only if the property is sold within a reasonable time after cessation of the farming or fishing business. A sale or other disposition within 1 year of the cessation is presumed to be within a reasonable time.

Elected farm income doesn't include income, gain, or loss from the sale or other disposition of land or from the sale of development rights, grazing rights, and other similar rights.

 You should find your income, gains, losses, and deductions from farming or fishing reported on different tax forms, such as:

2024 Form 1040 or 1040-SR, or Form 1040-NR, line﻿ ﻿1a, income from wages and other compensation you received (a) as a shareholder in an S corporation engaged in a farming or fishing business, or (b) as a crew member on a vessel engaged in a fishing business (but see Fishing business, earlier);

2024 Schedule 1 (Form 1040), line﻿ ﻿15, deductible part of self-employment tax, but only to the extent that deduction is attributable to your farming or fishing business;

2024 Form 1040, 1040-SR, or 1040-NR, line﻿ ﻿15, CCF reduction, except to the extent that any earnings (without regard to the carryback of any net operating or net capital loss) from the operation of agreement vessels in the fisheries of the United States or in the foreign or domestic commerce of the United States aren't attributable to your fishing business;

Schedule﻿ ﻿C;

Schedule﻿ ﻿D;

Schedule﻿ ﻿E, Part II;

Schedule﻿ ﻿F;

Form 4797;

Form 4835;

Form 8903, Domestic Production Activities Deduction, but only to the extent that deduction is attributable to your farming or fishing business; and

Form 8949.

Your elected farm income is the amount of your taxable income from farming or fishing that you elect to include on line﻿ ﻿2a.

You don't have to include all of your taxable income from farming or fishing on line﻿ ﻿2a. It may be to your advantage to include less than the entire amount, depending on how the amount you include on line﻿ ﻿2a affects your tax bracket for the current and prior 3 tax years.

The excess farm loss limitation rules don't apply for tax years beginning after 2017 and before 2029. The excess farm loss limitation rules are suspended during those years and replaced by the excess business loss limitation rules for tax years beginning after 2020 and before 2029. The at-risk limits and the passive activity limits are applied before calculating the amount of any excess business loss. The amount of any excess business loss allocable to your farming or fishing business(es) is not used in calculating the amount of your elected farm income. See generally the Instructions for Schedule﻿ ﻿F (Form 1040) and Form 461.

Your elected farm income can't exceed your taxable income.

Lines 2b and 2c

Complete lines 2b and 2c if the amount of your elected farm income on line﻿ ﻿2a includes net capital gain. Net capital gain is the excess, if any, of net long-term capital gain over net short-term capital loss.

Line﻿ ﻿2b.

Enter on line﻿ ﻿2b the portion of your elected farm income on line﻿ ﻿2a treated as a net capital gain. The amount you enter on line﻿ ﻿2b can't exceed the smaller of your total net capital gain or the net capital gain attributable to your farming or fishing business.

Line﻿ ﻿2c.

Enter on line﻿ ﻿2c the smaller of line﻿ ﻿2b or the unrecaptured section 1250 gain attributable to your farming or fishing business, if any.

Line 4

Figure the tax on the amount on line﻿ ﻿3 using:

The 2024 Tax Table, Tax Computation Worksheet, or Qualified Dividends and Capital Gain Tax Worksheet from the 2024 Instructions for Form 1040 or the 2024 Instructions for Form 1040-NR;

The 2024 Foreign Earned Income Tax Worksheet from the 2024 Instructions for Form 1040; or

The Schedule﻿ ﻿D Tax Worksheet in the 2024 Instructions for Schedule﻿ ﻿D.

Enter the tax on line﻿ ﻿4.

Line 5

If you used Schedule﻿ ﻿J to figure your tax for:

2023 (that is, you entered the amount from the 2023 Schedule﻿ ﻿J, line﻿ ﻿23, on your 2023 Form 1040, 1040-SR, or Form 1040-NR, line﻿ ﻿16; or on your 2023 Form 1040-X, line﻿ ﻿6), enter on line﻿ ﻿5 the amount from your 2023 Schedule﻿ ﻿J, line﻿ ﻿11;

2022 but not 2023, enter on line﻿ ﻿5 the amount from your 2022 Schedule﻿ ﻿J, line﻿ ﻿15; or

2021 but not 2022 or 2023, enter on line﻿ ﻿5 the amount from your 2021 Schedule﻿ ﻿J, line﻿ ﻿3.

If you figured your tax for 2021, 2022, and 2023 without using Schedule﻿ ﻿J, enter on line﻿ ﻿5 the taxable income from your 2021 tax return (or as previously adjusted by the IRS, or corrected on an amended return). But if that amount is zero or less, complete the 2021 Taxable Income Worksheet to figure the amount to enter on line﻿ ﻿5.

 If you didn't file a tax return for 2021, use the amount you would have reported as your taxable income had you been required to file a tax return. Be sure to keep all your records for 2021 for at least 3 years after April 15, 2025 (or the date you file your 2024 tax return, if later).

Instructions for 2021 Taxable Income Worksheet

Line﻿ ﻿2.

Any net capital loss deduction on your 2021 Schedule﻿ ﻿D, line﻿ ﻿21, isn't allowed for income averaging purposes to the extent it didn't reduce your capital loss carryover to 2022. This could happen if the taxable income—shown on your 2021 Form 1040, line﻿ ﻿15, or your 2021 Form 1040-NR, line﻿ ﻿15 (or as previously adjusted)—was less than zero. Enter on line﻿ ﻿2 the amount by which your 2021 capital loss carryover to 2022 (the sum of your short- and long-term capital loss carryovers) exceeds the excess of the loss on your 2021 Schedule﻿ ﻿D, line﻿ ﻿16, over the loss on your 2021 Schedule﻿ ﻿D, line﻿ ﻿21. If you had any net operating loss (NOL) carrybacks to 2021, be sure you refigured your 2021 capital loss carryover to 2022.

Line﻿ ﻿3.

If you had an NOL for 2021, enter the amount of that NOL from the 2021 Form 1045, Schedule﻿ ﻿A, line﻿ ﻿24, you filed with Form 1045 or Form 1040X. If you didn't have an NOL for 2021, enter the portion, if any, of the NOL carryovers and carrybacks to 2021 that weren't used in 2021 and were carried to years after 2021.

Example.

A farmer, who is single, didn't use income averaging for 2021, 2022, or 2023. For 2024, the farmer has $18,000 of elected farm income on Schedule﻿ ﻿J, line﻿ ﻿2a. The taxable income on the farmer’s 2021 Form 1040, line﻿ ﻿15, is $850. However, the farmer had a $14,600 NOL for 2022, $9,000 of which was remaining to carry to 2021 after the NOL was carried back to 2020. To complete line﻿ ﻿1 of the 2021 Taxable Income Worksheet, the farmer combines the $9,000 NOL deduction with the $850 from the farmer’s 2021 Form 1040, line﻿ ﻿15. The result is a negative $8,150, the farmer’s 2021 taxable income, which the farmer enters as a positive amount on line﻿ ﻿1 of the 2021 Taxable Income Worksheet.

When the farmer filed the 2021 tax return, the farmer had a $3,000 net capital loss deduction on Schedule﻿ ﻿D, line﻿ ﻿21 (which was also entered on Form 1040, line﻿ ﻿7); a $7,000 loss on Schedule﻿ ﻿D, line﻿ ﻿16; and a $4,000 capital loss carryover to 2022. However, when the farmer carried back the 2022 NOL ($9,000 of which was carried to 2021), the farmer refigured the 2021 capital loss carryover to 2022 as $7,000. The farmer adds the $3,000 from Schedule﻿ ﻿D, line﻿ ﻿21, and the $7,000 capital loss carryover. The farmer subtracts from the $10,000 result the $7,000 loss on the Schedule﻿ ﻿D, line﻿ ﻿16, and enters $3,000 on line﻿ ﻿2 of the worksheet.

The farmer had $850 of taxable income in 2021 that reduced the 2022 NOL carryback. The $3,000 net capital loss deduction reduced the amount of the 2022 NOL carryback. As a result, only $5,150 ($9,000 – $850 – $3,000 = $5,150) was available to carry to 2023 and later years, as shown on the farmer’s 2022 Form 1045, Schedule﻿ ﻿B, line﻿ ﻿10. The farmer enters the $5,150 on line﻿ ﻿3 of the worksheet, and $8,150 ($5,150 plus the $3,000 line﻿ ﻿2 amount) on line﻿ ﻿4. The farmer then subtracts the $8,150 from the $8,150 on line﻿ ﻿1 and enters the result, $0, on line﻿ ﻿5 of the worksheet. The farmer enters a $0 on Schedule﻿ ﻿J, line﻿ ﻿5. The farmer combines that amount with the $6,000 on Schedule﻿ ﻿J, line﻿ ﻿6, and enters $6,000 on Schedule﻿ ﻿J, line﻿ ﻿7.

Keep for Your Records Keep for Your Records

2021 Taxable Income Worksheet—Line﻿ ﻿5

Complete this worksheet if you didn’t use Schedule﻿ ﻿J to figure your tax for 2022 and 2023 and your 2021 taxable income was zero or less. See the instructions for line﻿ ﻿5 before completing this worksheet.

1.

Figure the taxable income from your 2021 tax return (or as previously adjusted) without limiting it to zero. If you had an NOL for 2021, don't include any NOL carryovers or carrybacks to 2021. Enter the result as a positive amount

1.

2.

If there is a loss on your 2021 Schedule﻿ ﻿D, line﻿ ﻿21, add that loss (as a positive amount) and your 2021 capital loss carryover to 2022. Subtract from that sum the amount of the loss on your 2021 Schedule﻿ ﻿D, line﻿ ﻿16, and enter the result

2.

3.

If you had an NOL for 2021, enter it as a positive amount. Otherwise, enter as a positive amount the portion, if any, of the NOL carryovers and carrybacks to 2021 that weren't used in 2021 and were carried to years after 2021

3.

4.

Add lines 2 and 3

4.

5.

Subtract line﻿ ﻿4 from line﻿ ﻿1. Enter the result as a negative amount on Schedule﻿ ﻿J, line﻿ ﻿5

5.

Line 8

If line﻿ ﻿7 is zero, enter -0- on line﻿ ﻿8. Otherwise, figure the tax on the amount on line﻿ ﻿7 using:

The 2021 Tax Rate Schedules below;

The 2021 Qualified Dividends and Capital Gain Tax Worksheet, later;

The 2021 Schedule﻿ ﻿D Tax Worksheet in the 2021 Schedule﻿ ﻿D instructions (but use the 2021 Tax Rate Schedules below when figuring the tax on lines 34 and 36 of the Schedule﻿ ﻿D Tax Worksheet); or

The 2021 Foreign Earned Income Tax Worksheet, later.

If your elected farm income includes net capital gain, you must use the 2021 Schedule﻿ ﻿D Tax Worksheet to figure the tax on the amount on line﻿ ﻿7. However, if you filed Form 2555 for 2021, you must first complete the 2021 Foreign Earned Income Tax Worksheet, and then use the 2021 Schedule﻿ ﻿D Tax Worksheet to figure the tax on the amount on line﻿ ﻿3 of the Foreign Earned Income Tax Worksheet.

When completing the Schedule﻿ ﻿D Tax Worksheet, you must allocate 1/3 of the amount on Schedule﻿ ﻿J, line﻿ ﻿2b, (and 1/3 of the amount on line﻿ ﻿2c, if any) to 2021. If for 2021 you had a capital loss that resulted in a capital loss carryover to 2022, don't reduce the elected farm income allocated to 2021 by any part of the carryover.

2021 Tax Rate Schedules—Line﻿ ﻿8

Schedule﻿ ﻿X—Use if your 2021 filing status was Single.

Schedule﻿ ﻿Y-2—Use if your 2021 filing status was Married filing separately.

If Schedule﻿ ﻿J, line﻿ ﻿7, is:
Over—

But not over—

Enter on     
Schedule﻿ ﻿J,     
line﻿ ﻿8    

of the amount over—

If Schedule﻿ ﻿J, line﻿ ﻿7, is:
Over—

But not over—

Enter on     
Schedule﻿ ﻿J,     
line﻿ ﻿8    

of the amount over—

 $0

$9,950

...........

10%

$0

 $0

$9,950

...........

10%

$0

9,950

40,525

$995

+

12%

9,950

9,950

40,525

$995

+

12%

9,950

40,525

86,375

4,664

+

22%

40,525

40,525

86,375

4,664

+

22%

40,525

86,375

164,925

14,751

+

24%

86,375

86,375

164,925

14,751

+

24%

86,375

164,925

209,425

33,603

+

32%

164,925

164,925

209,425

33,603

+

32%

164,925

209,425

523,600

47,843

+

35%

209,425

209,425

314,150

47,843

+

35%

209,425

523,600

.............

157,804.25

+

37%

523,600

314,150

..........

84,496.75

+

37%

314,150

Schedule﻿ ﻿Y-1—Use if your 2021 filing status was Married filing jointly or Qualifying widow(er).

Schedule﻿ ﻿Z—Use if your 2021 filing status was Head of household.

If Schedule﻿ ﻿J, line﻿ ﻿7, is:
Over—

But not over—

Enter on     
Schedule﻿ ﻿J,     
line﻿ ﻿8    

of the amount over—

If Schedule﻿ ﻿J, line﻿ ﻿7, is:
Over—

But not over—

Enter on     
Schedule﻿ ﻿J,     
line﻿ ﻿8   

of the amount over—

$0

$19,900

...........

10%

$0

$0

$14,200

...........

10%

$0

19,900

81,050

$1,990.00

+

12%

19,900

14,200

54,200

$1,420.00

+

12%

14,200

81,050

172,750

9,328.00

+

22%

81,050

54,200

86,350

6,220.00

+

22%

54,200

172,750

329,850

29,502.00

+

24%

172,750

86,350

164,900

13,293.00

+

24%

86,350

329,850

418,850

67,206.00

+

32%

329,850

164,900

209,400

32,145.00

+

32%

164,900

418,850

628,300

95,686.00

+

35%

418,850

209,400

523,600

46,385.00

+

35%

209,400

628,300

............

168,993.50

+

37%

628,300

523,600

...........

156,355.00

+

37%

523,600

Keep for Your Records Keep for Your Records

2021 Qualified Dividends and Capital Gain Tax Worksheet—Line﻿ ﻿8

Use this worksheet only if both of the following apply.

Your elected farm income on your 2024 Schedule﻿ ﻿J, line﻿ ﻿2a, doesn't include any net capital gain.

You (a) entered qualified dividends on your 2021 Form 1040, line﻿ ﻿3a, or 2021 Form 1040-NR, line﻿ ﻿3a; (b) entered capital gain distributions directly on your 2021 Form 1040, line﻿ ﻿7, or your 2021 Form 1040-NR, line﻿ ﻿7, and weren't required to file Schedule﻿ ﻿D; or (c) filed Schedule﻿ ﻿D in 2021 and you answered “Yes” on lines 17 and 20 of that Schedule﻿ ﻿D.

1.

Amount from your 2024 Schedule﻿ ﻿J, line﻿ ﻿7. If for 2021 you filed Form 2555, enter the amount from line﻿ ﻿3 of the 2021 Foreign Earned Income Tax Worksheet

1.

2.

Amount from your 2021 Form 1040, line﻿ ﻿3a* (or your 2021 Form 1040-NR, line﻿ ﻿3a)

2.

3.

Did you file Schedule﻿ ﻿D in 2021?*

⎕Yes.

Enter the smaller of line﻿ ﻿15 or 16 of your 2021 Schedule﻿ ﻿D, but don't enter less than -0-.

3.

⎕No.

Enter the amount from your 2021 Form 1040, line﻿ ﻿7, or 2021 Form 1040-NR, line﻿ ﻿7.

4.

Add lines 2 and 3

4.

5.

Amount, if any, from your 2021 Form 4952, line﻿ ﻿4g

5.

6.

Subtract line﻿ ﻿5 from line﻿ ﻿4. If zero or less, enter -0-

6.

7.

Subtract line﻿ ﻿6 from line﻿ ﻿1. If zero or less, enter -0-

7.

8.

Enter one of the following three amounts depending on your
filing status.

$40,400 if single or married filing separately.

$80,800 if married filing jointly or qualifying widow(er).

$54,100 if head of household.

8.

9.

Enter the smaller of line﻿ ﻿1 or line﻿ ﻿8

9.

10.

Enter the smaller of line﻿ ﻿7 or line﻿ ﻿9

10.

11.

Subtract line﻿ ﻿10 from line﻿ ﻿9. This amount is taxed at 0%

11.

12.

Enter the smaller of line﻿ ﻿1 or line﻿ ﻿6

12.

13.

Enter the amount from line﻿ ﻿11

13.

14.

Subtract line﻿ ﻿13 from line﻿ ﻿12

14.

15.

Enter one of the following amounts depending on your filing status.

$445,850 if single.

$250,800 if married filing separately.

$501,600 if married filing jointly or qualifying widow(er).

$473,750 if head of household.

15.

16.

Enter the smaller of line﻿ ﻿1 or line﻿ ﻿15

16.

17.

Add lines 7 and 11

17.

18.

Subtract line﻿ ﻿17 from line﻿ ﻿16. If zero or less, enter -0-

18.

19.

Enter the smaller of line﻿ ﻿14 or line﻿ ﻿18

19.

20.

Multiply line﻿ ﻿19 by 15% (0.15)

20.

21.

Add lines 11 and 19

21.

22.

Subtract line﻿ ﻿21 from line﻿ ﻿12

22.

23.

Multiply line﻿ ﻿22 by 20% (0.20)

23.

24.

Figure the tax on the amount on line﻿ ﻿7. Use the 2021 Tax Rate Schedules

24.

25.

Add lines 20, 23, and 24

25.

26.

Figure the tax on the amount on line﻿ ﻿1. Use the 2021 Tax Rate Schedules

26.

27.

Tax. Enter the smaller of line﻿ ﻿25 or line﻿ ﻿26 here and on your 2024 Schedule﻿ ﻿J, line﻿ ﻿8. If for 2021 you filed Form 2555, don't enter this amount on Schedule﻿ ﻿J, line﻿ ﻿8. Instead, enter it on line﻿ ﻿4 of the 2021 Foreign Earned Income Tax Worksheet

27.

* If for 2021 you filed Form 2555, see the footnote in the 2021 Foreign Earned Income Tax Worksheet before completing this line.

Keep for Your Records Keep for Your Records

2021 Foreign Earned Income Tax Worksheet—Line﻿ ﻿8

Use this worksheet if you claimed the foreign earned income exclusion or housing exclusion on your 2021 Form 1040 using Form 2555. However, if Schedule﻿ ﻿J, line﻿ ﻿7, is zero or less, don't complete this worksheet.

1.

Enter the amount from your 2024 Schedule﻿ ﻿J, line﻿ ﻿7

1.

2a.

Enter the amount from your (and your spouse's, if filing jointly) 2021 Form 2555, lines 45 and 50

2a.

b.

Enter the total amount of any itemized deductions or exclusions you could not claim for 2021 because they were related to excluded income

b.

c.

Subtract line﻿ ﻿2b from line﻿ ﻿2a. If zero or less, enter -0-

c.

3.

Add lines 1 and 2c

3.

4.

Figure the tax on the amount on line﻿ ﻿3. Use the 2021 Tax Rate Schedules, the 2021 Qualified Dividends and Capital Gain Tax Worksheet,* or the 2021 Schedule﻿ ﻿D Tax Worksheet in the 2021 Schedule﻿ ﻿D instructions,* whichever applies

4.

5.

Figure the tax on the amount on line﻿ ﻿2c. Use the 2021 Tax Rate Schedules

5.

6.

Subtract line﻿ ﻿5 from line﻿ ﻿4. Enter the result. If zero or less, enter -0-. Also include this amount on your 2024 Schedule﻿ ﻿J, line﻿ ﻿8

6.

* Enter the amount from line﻿ ﻿3 above on line﻿ ﻿1 of the 2021 Qualified Dividends and Capital Gain Tax Worksheet or the 2021 Schedule﻿ ﻿D Tax Worksheet if you use either of those worksheets to figure the tax on line﻿ ﻿4 above. Complete the rest of that worksheet through line﻿ ﻿6 (line﻿ ﻿10 if you use the Schedule﻿ ﻿D Tax Worksheet). Next, you must determine if you had a capital gain excess. To find out if you had a capital gain excess, subtract the amount from your 2024 Schedule﻿ ﻿J, line﻿ ﻿7, from line﻿ ﻿6 of your 2021 Qualified Dividends and Capital Gain Tax Worksheet (line﻿ ﻿10 of your 2021 Schedule﻿ ﻿D Tax Worksheet). If the result is more than zero, that amount is your capital gain excess.

 If you didn't have a capital gain excess, complete the rest of either of those worksheets according to the worksheet's instructions. Then complete lines 5 and 6 above.

 If you had a capital gain excess, complete a second 2021 Qualified Dividends and Capital Gain Tax Worksheet or 2021 Schedule﻿ ﻿D Tax Worksheet (whichever applies) as instructed above but in its entirety and with the following additional modifications. Then complete lines 5 and 6 above. These modifications are to be made only for purposes of filling out the 2021 Foreign Earned Income Tax Worksheet above.

 1. Reduce (but not below zero) the amount you would otherwise enter on line﻿ ﻿3 of your 2021 Qualified Dividends and Capital Gain Tax Worksheet or line﻿ ﻿9 of your 2021 Schedule﻿ ﻿D Tax Worksheet by your capital gain excess.

 2. Reduce (but not below zero) the amount you would otherwise enter on line﻿ ﻿2 of your 2021 Qualified Dividends and Capital Gain Tax Worksheet or line﻿ ﻿6 of your 2021 Schedule﻿ ﻿D Tax Worksheet by any of your capital gain excess not used in (1) above.

 3. Reduce (but not below zero) the amount on your 2021 Schedule﻿ ﻿D (Form 1040), line﻿ ﻿18, by your capital gain excess.

 4. Include your capital gain excess as a loss on line﻿ ﻿16 of your 2021 Unrecaptured Section 1250 Gain Worksheet in the 2021 Instructions for Schedule﻿ ﻿D (Form 1040).

Line 9

If you used Schedule﻿ ﻿J to figure your tax for:

2023 (that is, you entered the amount from the 2023 Schedule﻿ ﻿J, line﻿ ﻿23, on your 2023 Form 1040, 1040-SR, or Form 1040-NR, line﻿ ﻿16; or 2023 Form 1040-X, line﻿ ﻿6), enter on line﻿ ﻿9 the amount from your 2023 Schedule﻿ ﻿J, line﻿ ﻿15; or

2022 but not 2023, enter on line﻿ ﻿9 the amount from your 2022 Schedule﻿ ﻿J, line﻿ ﻿3.

If you figured your tax for both 2022 and 2023 without using Schedule﻿ ﻿J, enter on line﻿ ﻿9 the taxable income from your 2022 tax return (or as previously adjusted by the IRS, or corrected on an amended return). But if that amount is zero or less, complete the worksheet below to figure the amount to enter on line﻿ ﻿9.

 If you didn't file a tax return for 2022, use the amount you would have reported as your taxable income had you been required to file a tax return. Be sure to keep all your records for 2022 until at least 3 years after April 15, 2025 (or the date you file your 2024 tax return, if later).

Instructions for 2022 Taxable Income Worksheet

Line﻿ ﻿2.

Any net capital loss deduction on your 2022 Schedule﻿ ﻿D, line﻿ ﻿21, isn't allowed for income averaging purposes to the extent it didn't reduce your capital loss carryover to 2023. This could happen if the taxable income—shown on your 2022 Form 1040, 1040-SR, or Form 1040-NR, line﻿ ﻿15 (or as previously adjusted)—was less than zero. Enter on line﻿ ﻿2 the amount by which your 2022 capital loss carryover to 2023 (the sum of your short- and long-term capital loss carryovers) exceeds the excess of the loss on your 2022 Schedule﻿ ﻿D, line﻿ ﻿16, over the loss on your 2022 Schedule﻿ ﻿D, line﻿ ﻿21. If you had any NOL carrybacks to 2022, be sure you refigured your 2022 capital loss carryover to 2023.

Line﻿ ﻿3.

If you had an NOL for 2022, enter the amount of that NOL from the 2022 Form 1045, Schedule﻿ ﻿A, line﻿ ﻿24, you filed with Form 1045 or Form 1040-X. If you didn't have an NOL for 2022, enter the portion, if any, of the NOL carryovers and carrybacks to 2022 that weren't used in 2022 and were carried to years after 2022.

Example.

The farmer didn't use income averaging for 2021, 2022, or 2023. The taxable income on the farmer’s 2022 Form 1040, line﻿ ﻿15, is a negative $29,900. The deduction for exemptions has been suspended. The farmer subtracts from the $29,900 loss the $0 deduction for the suspended exemptions. The result is a negative $29,900, the farmer’s 2022 taxable income, which the farmer enters as a positive amount on line﻿ ﻿1 of the 2022 Taxable Income Worksheet.

When the farmer filed their 2022 tax return, the farmer had a $3,000 net capital loss deduction on Schedule﻿ ﻿D, line﻿ ﻿21 (which was also entered on Form 1040, line﻿ ﻿7), and a $7,000 loss on Schedule﻿ ﻿D, line﻿ ﻿16 (as adjusted). The farmer also had a $7,000 capital loss carryover to 2023.

 The farmer adds the $3,000 from Schedule﻿ ﻿D, line﻿ ﻿21, and the $7,000 capital loss carryover. The farmer subtracts from the $10,000 result the $7,000 loss on the Schedule﻿ ﻿D, line﻿ ﻿16, and enters $3,000 on line﻿ ﻿2 of the worksheet.

The farmer enters $14,500 on line﻿ ﻿3 of the worksheet, the 2022 NOL from their 2022 Form 1045, Schedule﻿ ﻿A, line﻿ ﻿24. Of the $29,900 negative taxable income, the $0 deduction for the suspended exemptions, the $3,000 capital loss deduction, and the farmer’s $12,400 standard deduction weren’t allowed in figuring the NOL. The farmer had a $14,500 loss on the 2022 Schedule﻿ ﻿F, the only other item on the farmer’s 2022 tax return.

The farmer enters $17,500 (the $3,000 line﻿ ﻿2 amount plus the $14,500 line﻿ ﻿3 amount) on line﻿ ﻿4 and $12,400 (the $29,900 line﻿ ﻿1 amount minus the $17,500 line﻿ ﻿4 amount) on line﻿ ﻿5. The farmer enters $12,400 as a negative amount on Schedule﻿ ﻿J, line﻿ ﻿9. The farmer enters $6,000 on Schedule﻿ ﻿J, line﻿ ﻿10, and a negative $6,200 on Schedule﻿ ﻿J, line﻿ ﻿11. If the farmer uses Schedule﻿ ﻿J to figure their tax for 2025, the farmer will enter the negative $6,200 amount on their 2025 Schedule﻿ ﻿J as the farmer’s 2022 taxable income for income averaging purposes.

Keep for Your Records Keep for Your Records

2022 Taxable Income Worksheet—Line﻿ ﻿9

Complete this worksheet if you didn’t use Schedule﻿ ﻿J to figure your tax for 2023 and your 2022 taxable income was zero or less. See the instructions above before completing this worksheet.

1.

Figure the taxable income from your 2022 tax return (or as previously adjusted) without limiting it to zero. If you had an NOL for 2022, don't include any NOL carryovers or carrybacks to 2022. Enter the result as a positive amount

1.

2.

If there is a loss on your 2022 Schedule﻿ ﻿D, line﻿ ﻿21, add that loss (as a positive amount) and your 2022 capital loss carryover to 2023. Subtract from that sum the amount of the loss on your 2022 Schedule﻿ ﻿D, line﻿ ﻿16, and enter the result

2.

3.

If you had an NOL for 2022, enter it as a positive amount. Otherwise, enter as a positive amount the portion, if any, of the NOL carryovers and carrybacks to 2022 that weren't used in 2022 and were carried to years after 2022

3.

4.

Add lines 2 and 3

4.

5.

Subtract line﻿ ﻿4 from line﻿ ﻿1. Enter the result as a negative amount on Schedule﻿ ﻿J, line﻿ ﻿9

5.

Line 12

If line﻿ ﻿11 is zero or less, enter -0- on line﻿ ﻿12. Otherwise, figure the tax on the amount on line﻿ ﻿11 using:

The 2022 Tax Rate Schedules below;

The 2022 Qualified Dividends and Capital Gain Tax Worksheet, later;

The 2022 Schedule﻿ ﻿D Tax Worksheet in the 2022 Schedule﻿ ﻿D instructions (but use the 2022 Tax Rate Schedules below when figuring the tax on the Schedule﻿ ﻿D Tax Worksheet, lines 42 and 44); or

The 2022 Foreign Earned Income Tax Worksheet, later.

If your elected farm income includes net capital gain, you must use the 2022 Schedule﻿ ﻿D Tax Worksheet to figure the tax on the amount on line﻿ ﻿11. However, if you filed Form 2555 for 2022, you must first complete the 2022 Foreign Earned Income Tax Worksheet, and then use the 2022 Schedule﻿ ﻿D Tax Worksheet to figure the tax on the amount on line﻿ ﻿3 of the Foreign Earned Income Tax Worksheet.

When completing the Schedule﻿ ﻿D Tax Worksheet, you must allocate 1/3 of the amount on Schedule﻿ ﻿J, line﻿ ﻿2b, (and 1/3 of the amount on line﻿ ﻿2c, if any) to 2022. If for 2022 you had a capital loss that resulted in a capital loss carryover to 2023, don't reduce the elected farm income allocated to 2022 by any part of the carryover.

2022 Tax Rate Schedules—Line﻿ ﻿12

Schedule﻿ ﻿X—Use if your 2022 filing status was Single.

Schedule﻿ ﻿Y-2—Use if your 2022 filing status was Married filing separately.

If Schedule﻿ ﻿J, line﻿ ﻿11, is:
Over—

But not over—

Enter on     
Schedule﻿ ﻿J,     
line﻿ ﻿12     

of the amount over—

If Schedule﻿ ﻿J, line﻿ ﻿11, is:
Over—

But not over—

Enter on     
Schedule﻿ ﻿J,     
line﻿ ﻿12     

of the amount over—

 $0

$10,275

...........

10%

$0

 $0

$10,275

...........

10%

$0

10,275

41,775

$1,027.50

+

12%

10,275

10,275

41,775

$1,027.50

+

12%

10,275

41,775

89,075

4,807.50

+

22%

41,775

41,775

89,075

4,807.50

+

22%

41,775

89,075

170,050

15,213.50

+

24%

89,075

89,075

170,050

15,213.50

+

24%

89,075

170,050

215,950

34,647.50

+

32%

170,050

170,050

215,950

34,647.50

+

32%

170,050

215,950

539,900

49,335.50

+

35%

215,950

215,950

323,925

49,335.50

+

35%

215,950

539,900

.............

162,718

+

37%

539,900

323,925

..........

87,126.75

+

37%

323,925

Schedule﻿ ﻿Y-1—Use if your 2022 filing status was Married filing jointly or Qualifying widow(er).

Schedule﻿ ﻿Z—Use if your 2022 filing status was Head of household.

If Schedule﻿ ﻿J, line﻿ ﻿11, is:
Over—

But not over—

Enter on     
Schedule﻿ ﻿J,     
line﻿ ﻿12     

of the amount over—

If Schedule﻿ ﻿J, line﻿ ﻿11, is:
Over—

But not over—

Enter on     
Schedule﻿ ﻿J,     
line﻿ ﻿12     

of the amount over—

$0

$20,550

...........

10%

$0

$0

$14,650

...........

10%

$0

20,550

83,550

$2,055.00

+

12%

20,550

14,650

55,900

$1,465.00

+

12%

14,650

83,550

178,150

9,615.00

+

22%

83,550

55,900

89,050

6,415.00

+

22%

55,900

178,150

340,100

30,427.00

+

24%

178,150

89,050

170,050

13,708.00

+

24%

89,050

340,100

431,900

69,295.00

+

32%

340,100

170,050

215,950

33,148.00

+

32%

170,050

431,900

647,850

98,671.00

+

35%

431,900

215,950

539,900

47,836.00

+

35%

215,950

647,850

............

174,253.50

+

37%

647,850

539,900

...........

161,218.50

+

37%

539,900

Keep for Your Records Keep for Your Records

2022 Qualified Dividends and Capital Gain Tax Worksheet—Line﻿ ﻿12

Use this worksheet only if both of the following apply.

Your elected farm income on your 2024 Schedule﻿ ﻿J, line﻿ ﻿2a, doesn't include any net capital gain.

You (a) entered qualified dividends on your 2022 Form 1040, 1040-SR, or 1040-NR, line﻿ ﻿3a; (b) entered capital gain distributions directly on your 2022 Form 1040, 1040-SR, or 1040-NR, line﻿ ﻿7, and weren't required to file Schedule﻿ ﻿D; or (c) filed Schedule﻿ ﻿D in 2022 and you answered “Yes” on lines 17 and 20 of that Schedule﻿ ﻿D.

1.

Amount from your 2024 Schedule﻿ ﻿J, line﻿ ﻿11. If for 2022 you filed Form 2555, enter the amount from line﻿ ﻿3 of the 2022 Foreign Earned Income Tax Worksheet

1.

2.

Amount from your 2022 Form 1040, 1040-SR, or 1040-NR, line﻿ ﻿3a*

2.

3.

Did you file Schedule﻿ ﻿D in 2022?*

⎕Yes.

Enter the smaller of line﻿ ﻿15 or 16 of your 2022 Schedule﻿ ﻿D, but don't enter less than -0-.

3.

⎕No.

Enter the amount from your 2022 Form 1040, 1040-SR, or 1040-NR, line﻿ ﻿7.

4.

Add lines 2 and 3

4.

5.

Amount, if any, from your 2022 Form 4952, line﻿ ﻿4g

5.

6.

Subtract line﻿ ﻿5 from line﻿ ﻿4. If zero or less, enter -0-

6.

7.

Subtract line﻿ ﻿6 from line﻿ ﻿1. If zero or less, enter -0-

7.

8.

Enter one of the following three amounts depending on your
filing status.

$41,675 if single or married filing separately.

$83,350 if married filing jointly or qualifying widow(er).

$55,800 if head of household.

8.

9.

Enter the smaller of line﻿ ﻿1 or line﻿ ﻿8

9.

10.

Enter the smaller of line﻿ ﻿7 or line﻿ ﻿9

10.

11.

Subtract line﻿ ﻿10 from line﻿ ﻿9. This amount is taxed at 0%

11.

12.

Enter the smaller of line﻿ ﻿1 or line﻿ ﻿6

12.

13.

Enter the amount from line﻿ ﻿11

13.

14.

Subtract line﻿ ﻿13 from line﻿ ﻿12

14.

15.

Enter one of the following amounts depending on your filing status.

$459,750 if single.

$258,600 if married filing separately.

$517,200 if married filing jointly or qualifying widow(er).

$488,500 if head of household.

15.

16.

Enter the smaller of line﻿ ﻿1 or line﻿ ﻿15

16.

17.

Add lines 7 and 11

17.

18.

Subtract line﻿ ﻿17 from line﻿ ﻿16. If zero or less, enter -0-

18.

19.

Enter the smaller of line﻿ ﻿14 or line﻿ ﻿18

19.

20.

Multiply line﻿ ﻿19 by 15% (0.15)

20.

21.

Add lines 11 and 19

21.

22.

Subtract line﻿ ﻿21 from line﻿ ﻿12

22.

23.

Multiply line﻿ ﻿22 by 20% (0.20)

23.

24.

Figure the tax on the amount on line﻿ ﻿7. Use the 2022 Tax Rate Schedules

24.

25.

Add lines 20, 23, and 24

25.

26.

Figure the tax on the amount on line﻿ ﻿1. Use the 2022 Tax Rate Schedules

26.

27.

Tax. Enter the smaller of line﻿ ﻿25 or line﻿ ﻿26 here and on your 2024 Schedule﻿ ﻿J, line﻿ ﻿12. If for 2022 you filed Form 2555, don't enter this amount on Schedule﻿ ﻿J, line﻿ ﻿12. Instead, enter it on line﻿ ﻿4 of the 2022 Foreign Earned Income Tax Worksheet

27.

* If for 2022 you filed Form 2555, see the footnote in the 2022 Foreign Earned Income Tax Worksheet before completing this line.

Keep for Your Records Keep for Your Records

2022 Foreign Earned Income Tax Worksheet—Line﻿ ﻿12

Use this worksheet if you claimed the foreign earned income exclusion or housing exclusion on your 2022 Form 1040 or 1040-SR using Form 2555. However, if Schedule﻿ ﻿J, line﻿ ﻿11, is zero or less, don't complete this worksheet.

1.

Enter the amount from your 2024 Schedule﻿ ﻿J, line﻿ ﻿11

1.

2a.

Enter the amount from your (and your spouse's, if filing jointly) 2022 Form 2555, lines 45 and 50

2a.

b.

Enter the total amount of any itemized deductions or exclusions you could not claim for 2022 because they were related to excluded income

b.

c.

Subtract line﻿ ﻿2b from line﻿ ﻿2a. If zero or less, enter -0-

c.

3.

Add lines 1 and 2c

3.

4.

Figure the tax on the amount on line﻿ ﻿3. Use the 2022 Tax Rate Schedules, the 2022 Qualified Dividends and Capital Gain Tax Worksheet,* or the 2022 Schedule﻿ ﻿D Tax Worksheet in the 2022 Schedule﻿ ﻿D instructions,* whichever applies

4.

5.

Figure the tax on the amount on line﻿ ﻿2c. Use the 2022 Tax Rate Schedules

5.

6.

Subtract line﻿ ﻿5 from line﻿ ﻿4. Enter the result. If zero or less, enter -0-. Also include this amount on your 2024 Schedule﻿ ﻿J, line﻿ ﻿12

6.

* Enter the amount from line﻿ ﻿3 above on line﻿ ﻿1 of the 2022 Qualified Dividends and Capital Gain Tax Worksheet or the 2022 Schedule﻿ ﻿D Tax Worksheet if you use either of those worksheets to figure the tax on line﻿ ﻿4 above. Complete the rest of that worksheet through line﻿ ﻿6 (line﻿ ﻿10 if you use the Schedule﻿ ﻿D Tax Worksheet). Next, you must determine if you had a capital gain excess. To find out if you had a capital gain excess, subtract the amount from your 2024 Schedule﻿ ﻿J, line﻿ ﻿11, from line﻿ ﻿6 of your 2022 Qualified Dividends and Capital Gain Tax Worksheet (line﻿ ﻿10 of your 2022 Schedule﻿ ﻿D Tax Worksheet). If the result is more than zero, that amount is your capital gain excess.

 If you didn't have a capital gain excess, complete the rest of either of those worksheets according to the worksheet's instructions. Then complete lines 5 and 6 above.

 If you had a capital gain excess, complete a second 2022 Qualified Dividends and Capital Gain Tax Worksheet or 2022 Schedule﻿ ﻿D Tax Worksheet (whichever applies) as instructed above but in its entirety and with the following additional modifications. Then complete lines 5 and 6 above. These modifications are to be made only for purposes of filling out the 2022 Foreign Earned Income Tax Worksheet above.

 1. Reduce (but not below zero) the amount you would otherwise enter on line﻿ ﻿3 of your 2022 Qualified Dividends and Capital Gain Tax Worksheet or line﻿ ﻿9 of your 2022 Schedule﻿ ﻿D Tax Worksheet by your capital gain excess.

 2. Reduce (but not below zero) the amount you would otherwise enter on line﻿ ﻿2 of your 2022 Qualified Dividends and Capital Gain Tax Worksheet or line﻿ ﻿6 of your 2022 Schedule﻿ ﻿D Tax Worksheet by any of your capital gain excess not used in (1) above.

 3. Reduce (but not below zero) the amount on your 2022 Schedule﻿ ﻿D (Form 1040), line﻿ ﻿18, by your capital gain excess.

 4. Include your capital gain excess as a loss on line﻿ ﻿16 of your 2022 Unrecaptured Section 1250 Gain Worksheet in the 2022 Instructions for Schedule﻿ ﻿D (Form 1040).

Line 13

If you used Schedule﻿ ﻿J to figure your tax for 2023 (that is, you entered the amount from the 2023 Schedule﻿ ﻿J, line﻿ ﻿23, on your 2023 Form 1040, 1040-SR, or 1040-NR, line﻿ ﻿16; or on Form 1040-X, line﻿ ﻿6, for 2023), enter on line﻿ ﻿13 the amount from your 2023 Schedule﻿ ﻿J, line﻿ ﻿3.

If you didn't use Schedule﻿ ﻿J to figure your tax for 2023, enter on line﻿ ﻿13 the taxable income from your 2023 tax return (or as previously adjusted by the IRS, or corrected on an amended return). But if that amount is zero or less, complete the worksheet below to figure the amount to enter on line﻿ ﻿13.

 If you didn't file a tax return for 2023, use the amount you would have reported as your taxable income had you been required to file a tax return. Be sure to keep all your records for 2023 until at least 3 years after April 15, 2025 (or the date you file your 2024 tax return, if later).

Instructions for 2023 Taxable Income Worksheet

Line﻿ ﻿2.

Any net capital loss deduction on your 2023 Schedule﻿ ﻿D, line﻿ ﻿21, isn't allowed for income averaging purposes to the extent it didn't reduce your capital loss carryover to 2024. This could happen if the taxable income—shown on your 2023 Form 1040, 1040-SR, or 1040-NR, line﻿ ﻿15 (or as previously adjusted)—would have been less than zero if you could have entered a negative amount on that line. Enter on line﻿ ﻿2 the amount by which your 2023 capital loss carryover to 2024 (the sum of your short- and long-term capital loss carryovers) exceeds the excess of the loss on your 2023 Schedule﻿ ﻿D, line﻿ ﻿16, over the loss on your 2023 Schedule﻿ ﻿D, line﻿ ﻿21.

Line﻿ ﻿3.

If you had an NOL for 2023, enter the amount of that NOL from the 2023 Form 1045, Schedule﻿ ﻿A, line﻿ ﻿24, you filed with Form 1045 or Form 1040-X. If you didn't have an NOL for 2023, enter the portion, if any, of the NOL carryovers and carrybacks to 2023 that weren't used in 2023 and were carried to years after 2023.

Example.

The farmer didn't use income averaging for 2021, 2022, or 2023. The taxable income on the farmer’s 2023 Form 1040, line﻿ ﻿15, would have been a negative $1,000 if the farmer could have entered a negative number on that line. This amount includes an NOL deduction on the farmer’s 2023 Schedule 1 (Form 1040), line﻿ ﻿8a, of $5,150. The $5,150 is the portion of the 2022 NOL that was remaining from 2021 to be carried to 2023. See the examples earlier. The farmer’s taxable income is limited to zero and the farmer doesn’t have an NOL for 2023. The result is a negative $1,000, the farmer’s 2023 taxable income, which the farmer enters as a positive amount on line﻿ ﻿1 of the 2023 Taxable Income Worksheet.

When the farmer filed the 2023 tax return, the farmer had a $3,000 net capital loss deduction on Schedule﻿ ﻿D, line﻿ ﻿21 (which was also entered on Form 1040, line﻿ ﻿7); a $7,000 loss on Schedule﻿ ﻿D, line﻿ ﻿16; and a $5,000 capital loss carryover to 2024 (the farmer’s 2023 capital loss carryover to 2024 was $5,000, not $4,000, because the amount on the Form 1040, line﻿ ﻿15, would have been a negative $1,000 if the farmer could have entered a negative number on that line). The farmer adds the $3,000 from Schedule﻿ ﻿D, line﻿ ﻿21, and the $5,000 carryover. The farmer subtracts from the $8,000 result the $7,000 loss on the Schedule﻿ ﻿D, line﻿ ﻿16, and enters $1,000 on line﻿ ﻿2 of the worksheet.

The farmer enters -0- on line﻿ ﻿3 of the worksheet because the farmer doesn't have an NOL for 2023 and didn't have an NOL carryover from 2023 available to carry to 2024 and later years. The NOL deduction for 2023 of $5,150 was reduced to zero because it didn't exceed the farmer’s modified taxable income of $7,150. Modified taxable income is figured by adding back the $3,000 net capital loss deduction to taxable income (figured without regard to the NOL deduction) of $4,150. The farmer enters $1,000 on line﻿ ﻿4 and $0 on line﻿ ﻿5 of the worksheet. The farmer enters $0 on Schedule﻿ ﻿J, line﻿ ﻿13. The farmer enters $6,000 on Schedule﻿ ﻿J, line﻿ ﻿14, and $6,000 on Schedule﻿ ﻿J, line﻿ ﻿15. If the farmer uses Schedule﻿ ﻿J to figure the farmer’s tax for 2025, the farmer will enter $6,000 on the farmer’s 2025 Schedule﻿ ﻿J as the 2023 taxable income for income averaging purposes.

Keep for Your Records Keep for Your Records

2023 Taxable Income Worksheet—Line﻿ ﻿13

Complete this worksheet if your 2023 taxable income was zero or less. See the instructions above before completing this worksheet.

1.

Figure the taxable income from your 2023 tax return (or as previously adjusted) without limiting it to zero. If you had an NOL for 2023, don't include any NOL carryovers or carrybacks to 2023. Enter the result as a positive amount

1.

2.

If there is a loss on your 2023 Schedule﻿ ﻿D, line﻿ ﻿21, add that loss (as a positive amount) and your 2023 capital loss carryover to 2024. Subtract from that sum the amount of the loss on your 2023 Schedule﻿ ﻿D, line﻿ ﻿16, and enter the result

2.

3.

If you had an NOL for 2023, enter it as a positive amount. Otherwise, enter as a positive amount the portion, if any, of the NOL carryovers and carrybacks to 2023 that weren't used in 2023 and were carried to years after 2023

3.

4.

Add lines 2 and 3

4.

5.

Subtract line﻿ ﻿4 from line﻿ ﻿1. Enter the result as a negative amount on Schedule﻿ ﻿J, line﻿ ﻿13

5.

Line 16

If line﻿ ﻿15 is zero or less, enter -0- on line﻿ ﻿16. Otherwise, figure the tax on the amount on line﻿ ﻿15 using:

The 2023 Tax Rate Schedules below;

The 2023 Qualified Dividends and Capital Gain Tax Worksheet, later;

The 2023 Schedule﻿ ﻿D Tax Worksheet in the 2023 Schedule﻿ ﻿D instructions (but use the 2023 Tax Rate Schedules when figuring the tax on the Schedule﻿ ﻿D Tax Worksheet, lines 44 and 46); or

The 2023 Foreign Earned Income Tax Worksheet, later.

If your elected farm income includes net capital gain, you must use the 2023 Schedule﻿ ﻿D Tax Worksheet to figure the tax on the amount on line﻿ ﻿15. However, if you filed Form 2555 for 2023, you must first complete the 2023 Foreign Earned Income Tax Worksheet and then use the 2023 Schedule﻿ ﻿D Tax Worksheet to figure the tax on the amount on line﻿ ﻿3 of the Foreign Earned Income Tax Worksheet.

When completing the Schedule﻿ ﻿D Tax Worksheet, you must allocate 1/3 of the amount on Schedule﻿ ﻿J, line﻿ ﻿2b, (and 1/3 of the amount on line﻿ ﻿2c, if any) to 2023. If for 2023 you had a capital loss that resulted in a capital loss carryover to 2024, don't reduce the elected farm income allocated to 2023 by any part of the carryover.

2023 Tax Rate Schedules—Line﻿ ﻿16

Schedule﻿ ﻿X—Use if your 2023 filing status was Single.

Schedule﻿ ﻿Y-2—Use if your 2023 filing status was Married filing separately.

If Schedule﻿ ﻿J, line﻿ ﻿15, is:
Over—

But not over—

Enter on     
Schedule﻿ ﻿J,     
line﻿ ﻿16     

of the amount over—

If Schedule﻿ ﻿J, line﻿ ﻿15, is:
Over—

But not over—

Enter on     
Schedule﻿ ﻿J,     
line﻿ ﻿16     

of the amount over—

 $0

$11,000

...........

10%

$0

 $0

$11,000

...........

10%

$0

11,000

44,725

$1,100

+

12%

11,000

11,000

44,725

$1,100

+

12%

11,000

44,725

95,375

5,147.00

+

22%

44,725

44,725

95,375

5,147.00

+

22%

44,725

95,375

182,100

16,290.00

+

24%

95,375

95,375

182,100

16,290.00

+

24%

95,375

182,100

231,250

37,104.00

+

32%

182,100

182,100

231,250

37,104.00

+

32%

182,100

231,250

578,125

52,832.00

+

35%

231,250

231,250

346,875

52,832.00

+

35%

231,250

578,125

.............

174,238.25

+

37%

578,125

346,875

..........

93,300.75

+

37%

346,875

Schedule﻿ ﻿Y-1—Use if your 2023 filing status was Married filing jointly or Qualifying surviving spouse.

Schedule﻿ ﻿Z—Use if your 2023 filing status was Head of household.

If Schedule﻿ ﻿J, line﻿ ﻿15, is:
Over—

But not over—

Enter on     
Schedule﻿ ﻿J,     
line﻿ ﻿16     

of the amount over—

If Schedule﻿ ﻿J, line﻿ ﻿15, is:
Over—

But not over—

Enter on     
Schedule﻿ ﻿J,     
line﻿ ﻿16     

of the amount over—

$0

$22,000

...........

10%

$0

$0

$15,700

...........

10%

$0

22,000

89,450

$2,200.00

+

12%

22,000

15,700

59,850

$1,570.00

+

12%

15,700

89,450

190,750

10,294.00

+

22%

89,450

59,850

95,350

6,868.00

+

22%

59,850

190,750

364,200

32,580.00

+

24%

190,750

95,350

182,100

14,678.00

+

24%

95,350

364,200

462,500

74,208.00

+

32%

364,200

182,100

231,250

35,498.00

+

32%

182,100

462,500

693,750

105,664.00

+

35%

462,500

231,250

578,100

51,226.00

+

35%

231,250

693,750

............

186,601.50

+

37%

693,750

578,100

...........

172,623.50

+

37%

578,100

Keep for Your Records Keep for Your Records

2023 Qualified Dividends and Capital Gain Tax Worksheet—Line﻿ ﻿16

Use this worksheet only if both of the following apply.

Your elected farm income on your 2024 Schedule﻿ ﻿J, line﻿ ﻿2a, doesn't include any net capital gain.

You (a) entered qualified dividends on your 2023 Form 1040, 1040-SR, or 1040-NR, line﻿ ﻿3a; (b) entered capital gain distributions directly on your 2023 Form 1040, 1040-SR, or 1040-NR, line﻿ ﻿7, and weren't required to file Schedule﻿ ﻿D; or (c) filed Schedule﻿ ﻿D in 2023 and you answered “Yes” on lines 17 and 20 of that Schedule﻿ ﻿D.

1.

Amount from your 2024 Schedule﻿ ﻿J, line﻿ ﻿15. If for 2023 you filed Form 2555, enter the amount from line﻿ ﻿3 of the 2023 Foreign Earned Income Tax Worksheet

1.

2.

Amount from your 2023 Form 1040, 1040-SR, or 1040-NR, line﻿ ﻿3a*

2.

3.

Did you file Schedule﻿ ﻿D in 2023?*

⎕Yes.

Enter the smaller of line﻿ ﻿15 or 16 of your 2023 Schedule﻿ ﻿D, but don't enter less than -0-.

3.

⎕No.

Enter the amount from your 2023 Form 1040, 1040-SR, or 1040-NR, line﻿ ﻿7.

4.

Add lines 2 and 3

4.

5.

Amount, if any, from your 2023 Form 4952, line﻿ ﻿4g

5.

6.

Subtract line﻿ ﻿5 from line﻿ ﻿4. If zero or less, enter -0-

6.

7.

Subtract line﻿ ﻿6 from line﻿ ﻿1. If zero or less, enter -0-

7.

8.

Enter one of the following three amounts depending on your
filing status.

$44,625 if single or married filing separately.

$89,250 if married filing jointly or qualifying surviving spouse.

$59,750 if head of household.

8.

9.

Enter the smaller of line﻿ ﻿1 or line﻿ ﻿8

9.

10.

Enter the smaller of line﻿ ﻿7 or line﻿ ﻿9

10.

11.

Subtract line﻿ ﻿10 from line﻿ ﻿9. This amount is taxed at 0%

11.

12.

Enter the smaller of line﻿ ﻿1 or line﻿ ﻿6

12.

13.

Enter the amount from line﻿ ﻿11

13.

14.

Subtract line﻿ ﻿13 from line﻿ ﻿12

14.

15.

Enter one of the following amounts depending on your filing status.

$492,300 if single.

$276,900 if married filing separately.

$553,850 if married filing jointly or qualifying surviving spouse.

$523,050 if head of household.

15.

16.

Enter the smaller of line﻿ ﻿1 or line﻿ ﻿15

16.

17.

Add lines 7 and 11

17.

18.

Subtract line﻿ ﻿17 from line﻿ ﻿16. If zero or less, enter -0-

18.

19.

Enter the smaller of line﻿ ﻿14 or line﻿ ﻿18

19.

20.

Multiply line﻿ ﻿19 by 15% (0.15)

20.

21.

Add lines 11 and 19

21.

22.

Subtract line﻿ ﻿21 from line﻿ ﻿12

22.

23.

Multiply line﻿ ﻿22 by 20% (0.20)

23.

24.

Figure the tax on the amount on line﻿ ﻿7. Use the 2023 Tax Rate Schedules

24.

25.

Add lines 20, 23, and 24

25.

26.

Figure the tax on the amount on line﻿ ﻿1. Use the 2023 Tax Rate Schedules

26.

27.

Tax. Enter the smaller of line﻿ ﻿25 or line﻿ ﻿26 here and on your 2024 Schedule﻿ ﻿J, line﻿ ﻿16. If for 2023 you filed Form 2555, don't enter this amount on Schedule﻿ ﻿J, line﻿ ﻿16. Instead, enter it on line﻿ ﻿4 of the 2023 Foreign Earned Income Tax Worksheet

27.

* If for 2023 you filed Form 2555, see the footnote in the 2023 Foreign Earned Income Tax Worksheet before completing this line.

Keep for Your Records Keep for Your Records

2023 Foreign Earned Income Tax Worksheet—Line﻿ ﻿16

Use this worksheet if you claimed the foreign earned income exclusion or housing exclusion on your 2023 Form 1040 or 1040-SR using Form 2555. However, if Schedule﻿ ﻿J, line﻿ ﻿15, is zero or less, don't complete this worksheet.

1.

Enter the amount from your 2024 Schedule﻿ ﻿J, line﻿ ﻿15

1.

2a.

Enter the amount from your (and your spouse's, if filing jointly) 2023 Form 2555, lines 45 and 50

2a.

b.

Enter the total amount of any itemized deductions or exclusions you could not claim for 2023 because they were related to excluded income

b.

c.

Subtract line﻿ ﻿2b from line﻿ ﻿2a. If zero or less, enter -0-

c.

3.

Add lines 1 and 2c

3.

4.

Figure the tax on the amount on line﻿ ﻿3. Use the 2023 Tax Rate Schedules, the 2023 Qualified Dividends and Capital Gain Tax Worksheet,* or the 2023 Schedule﻿ ﻿D Tax Worksheet in the 2023 Schedule﻿ ﻿D instructions,* whichever applies

4.

5.

Figure the tax on the amount on line﻿ ﻿2c. Use the 2023 Tax Rate Schedules

5.

6.

Subtract line﻿ ﻿5 from line﻿ ﻿4. Enter the result. If zero or less, enter -0-. Also include this amount on your 2024 Schedule﻿ ﻿J, line﻿ ﻿16

6.

* Enter the amount from line﻿ ﻿3 above on line﻿ ﻿1 of the 2023 Qualified Dividends and Capital Gain Tax Worksheet or the 2023 Schedule﻿ ﻿D Tax Worksheet if you use either of those worksheets to figure the tax on line﻿ ﻿4 above. Complete the rest of that worksheet through line﻿ ﻿6 (line﻿ ﻿10 if you use the Schedule﻿ ﻿D Tax Worksheet). Next, you must determine if you had a capital gain excess. To find out if you had a capital gain excess, subtract the amount from your 2024 Schedule﻿ ﻿J, line﻿ ﻿15, from line﻿ ﻿6 of your 2023 Qualified Dividends and Capital Gain Tax Worksheet (line﻿ ﻿10 of your 2023 Schedule﻿ ﻿D Tax Worksheet). If the result is more than zero, that amount is your capital gain excess.

 If you didn't have a capital gain excess, complete the rest of either of those worksheets according to the worksheet's instructions. Then complete lines 5 and 6 above.

 If you had a capital gain excess, complete a second 2023 Qualified Dividends and Capital Gain Tax Worksheet or 2023 Schedule﻿ ﻿D Tax Worksheet (whichever applies) as instructed above but in its entirety and with the following additional modifications. Then complete lines 5 and 6 above. These modifications are to be made only for purposes of filling out the 2023 Foreign Earned Income Tax Worksheet above.

 1. Reduce (but not below zero) the amount you would otherwise enter on line﻿ ﻿3 of your 2023 Qualified Dividends and Capital Gain Tax Worksheet or line﻿ ﻿9 of your 2023 Schedule﻿ ﻿D Tax Worksheet by your capital gain excess.

 2. Reduce (but not below zero) the amount you would otherwise enter on line﻿ ﻿2 of your 2023 Qualified Dividends and Capital Gain Tax Worksheet or line﻿ ﻿6 of your 2023 Schedule﻿ ﻿D Tax Worksheet by any of your capital gain excess not used in (1) above.

 3. Reduce (but not below zero) the amount on your 2023 Schedule﻿ ﻿D (Form 1040), line﻿ ﻿18, by your capital gain excess.

 4. Include your capital gain excess as a loss on line﻿ ﻿16 of your 2023 Unrecaptured Section 1250 Gain Worksheet in the 2023 Instructions for Schedule﻿ ﻿D (Form 1040).

Lines 19, 20, and 21

For example, your “tax” line may, in addition to the tax imposed by section 1, include amounts from Form 8814 or 4972; amounts from the recapture of an education credit; or a repayment amount for any excess of advance monthly payments of the health coverage tax credit.

If you amended your return or the IRS made changes to it, make sure you enter the corrected amount.