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Department of the Treasury
Internal Revenue Service

2022 Instructions for Schedule J
Income
Averaging for
Farmers and
Fishermen

Use Schedule J (Form 1040) to elect to figure your 2022 income tax by averaging,
over the previous 3 years (base years), all or part of your 2022 taxable income from
your trade or business of farming or fishing. This election may give you a lower tax if
your 2022 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.

surviving spouse.” We will match the
term to the year of use.

Future Developments

Definitions

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.

Farming business. A farming business
is the trade or business of cultivating
land or raising or harvesting any agricultural or horticultural commodity. This
includes:
1. Operating a nursery or sod farm;
2. Raising or harvesting of trees
bearing fruits, nuts, or other crops;
3. Raising ornamental trees (but not
evergreen trees that are more than 6
years old when severed from the roots);
4. Raising, shearing, feeding, caring
for, training, and managing animals; and
5. 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.

General
Instructions
Prior Year Tax Returns
You may need copies of your original or
amended income tax returns for 2019,
2020, and 2021 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
your Instructions for Form 1040 to find
out how to get these forms.
Keep a copy of your 2022 income tax
return to use for income averaging in
2023, 2024, or 2025.
Note. Tax years 2021 and prior referred to the term “Qualifying widow(er).”
For tax years beginning in 2022, the
term will be referred to as “Qualifying

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
J-1

Oct 13, 2022

Cat. No. 25514J

enter commerce through sale, barter, or
trade. This includes:
1. The catching, taking, or harvesting of fish;
2. The attempted catching, taking,
or harvesting of fish;
3. Any other activity that can reasonably be expected to result in the
catching, taking, or harvesting of fish;
4. Any operations at sea in support
of, or in preparation for, any activity described in (1) through (3) above;
5. 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
6. 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.

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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
considered 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:
• 2022 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);
• 2022 Schedule 1 (Form 1040),
line 15, deductible part of self-employment tax, but only to the extent that de-

duction is attributable to your farming or
fishing business;
• 2022 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

TIP your taxable income from farm­
ing 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

J-2

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 2022 Tax Table, Tax Computation Worksheet, or Qualified Dividends and Capital Gain Tax Worksheet
from the 2022 Instructions for Form
1040 or the 2022 Instructions for Form
1040-NR;
• The 2022 Foreign Earned Income
Tax Worksheet from the 2022 Instructions for Form 1040; or
• The Schedule D Tax Worksheet in
the 2022 Instructions for Schedule D.
Enter the tax on line 4.

Line 5
If you used Schedule J to figure your tax
for:
• 2021 (that is, you entered the
amount from the 2021 Schedule J,
line 23, on your 2021 Form 1040,
1040-SR, or Form 1040-NR, line 16; or
on your 2021 Form 1040-X, line 6), enter on line 5 the amount from your 2021
Schedule J, line 11;
• 2020 but not 2021, enter on line 5
the amount from your 2020 Schedule J,
line 15; or
• 2019 but not 2020 or 2021, enter
on line 5 the amount from your 2019
Schedule J, line 3.
If you figured your tax for 2019,
2020, and 2021 without using Schedule J, enter on line 5 the taxable income
from your 2019 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
2019 Taxable Income Worksheet to figure the amount to enter on line 5.

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2019 Taxable Income Worksheet—Line 5

Keep for Your Records

Complete this worksheet if you didn’t use Schedule J to figure your tax for 2020 and 2021 and your 2019 taxable income was zero or
less. See the instructions for line 5 before completing this worksheet.
1. Figure the taxable income from your 2019 tax return (or as previously adjusted) without limiting it to
zero. If you had an NOL for 2019, don't include any NOL carryovers or carrybacks to 2019. Enter the
result as a positive amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. If there is a loss on your 2019 Schedule D, line 21, add that loss (as a positive
amount) and your 2019 capital loss carryover to 2020. Subtract from that sum the
amount of the loss on your 2019 Schedule D, line 16, and enter the result . . . . . . . .
2.
3. If you had an NOL for 2019, enter it as a positive amount. Otherwise, enter as a
positive amount the portion, if any, of the NOL carryovers and carrybacks to 2019
that weren't used in 2019 and were carried to years after 2019 . . . . . . . . . . . . . . . . .
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.

If you didn't file a tax return for
2019, 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 2019
for at least 3 years after April 18, 2023
(or the date you file your 2022 tax return, if later).
Instructions for 2019 Taxable
Income Worksheet
Line 2. Any net capital loss deduction
on your 2019 Schedule D, line 21, isn't
allowed for income averaging purposes
to the extent it didn't reduce your capital
loss carryover to 2020. This could happen if the taxable income—shown on
your 2019 Form 1040, line 11b, your
2019 Form 1040-NR-EZ, line 14, or
your 2019 Form 1040-NR, line 41 (or as
previously adjusted)—was less than
zero. Enter on line 2 the amount by
which your 2019 capital loss carryover
to 2020 (the sum of your short- and
long-term capital loss carryovers) exceeds the excess of the loss on your
2019 Schedule D, line 16, over the loss
on your 2019 Schedule D, line 21. If you
had any net operating loss (NOL) carrybacks to 2019, be sure you refigured
your 2019 capital loss carryover to
2020.
Line 3. If you had an NOL for 2019,
enter the amount of that NOL from the
2019 Form 1045, Schedule A, line 25,
you filed with Form 1045 or Form
1040X. If you didn't have an NOL for
2019, enter the portion, if any, of the

NOL carryovers and carrybacks to 2019
that weren't used in 2019 and were carried to years after 2019.
Example. A farmer, who is single,
didn't use income averaging for 2019,
2020, or 2021. For 2022, the farmer has
$18,000 of elected farm income on
Schedule J, line 2a. The taxable income
on the farmer’s 2019 Form 1040,
line 11b, is $850. However, the farmer
had a $14,500 NOL for 2020, $9,000 of
which was remaining to carry to 2019
after the NOL was carried back to 2018.
To complete line 1 of the 2019 Taxable
Income Worksheet, the farmer combines
the $9,000 NOL deduction with the
$850 from the farmer’s 2019 Form
1040, line 11b. The result is a negative
$8,150, the farmer’s 2019 taxable income, which the farmer enters as a positive amount on line 1 of the 2019 Taxable Income Worksheet.
When the farmer filed the 2019 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 6); a $7,000 loss on Schedule D,
line 16; and a $4,000 capital loss carryover to 2020. However, when the farmer
carried back the 2020 NOL ($9,000 of
which was carried to 2019), the farmer
refigured the 2019 capital loss carryover
to 2020 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.

J-3

1.

The farmer had $850 of taxable income in 2019 that reduced the 2020
NOL carryback. The $3,000 net capital
loss deduction reduced the amount of
the 2020 NOL carryback. As a result,
only $5,150 ($9,000 – $850 – $3,000 =
$5,150) was available to carry to 2021
and later years, as shown on the farmer’s
2020 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 negative $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.

Line 8
If line 7 is zero, enter -0- on line 8. Otherwise, figure the tax on the amount on
line 7 using:
• The 2019 Tax Rate Schedules below;
• The 2019 Qualified Dividends and
Capital Gain Tax Worksheet, later;
• The 2019 Schedule D Tax Worksheet in the 2019 Schedule D instructions (but use the 2019 Tax Rate Schedules below when figuring the tax on
lines 34 and 36 of the Schedule D Tax
Worksheet); or
• The 2019 Foreign Earned Income
Tax Worksheet, later.
If your elected farm income includes
net capital gain, you must use the 2019

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Schedule D Tax Worksheet to figure the
tax on the amount on line 7. However, if
you filed Form 2555 for 2019, you must
first complete the 2019 Foreign Earned
Income Tax Worksheet, and then use the
2019 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

2019. If for 2019 you had a capital loss
that resulted in a capital loss carryover
to 2020, don't reduce the elected farm
income allocated to 2019 by any part of
the carryover.

2019 Tax Rate Schedules—Line 8
Schedule X—Use if your 2019 filing status was Single or you Schedule Y-2—Use if your 2019 filing status was Married filing separately
checked filing status box 2 on Form 1040NR.
or you checked filing status box 5 on Form 1040NR.
If
Schedule J,
line 7 is:
Over—

But not
over—

Enter on
Schedule J,
line 8

$0

$9,700

...........

9,700

39,475

$970

39,475

84,200

of the
amount
over—

If
Schedule J,
line 7 is:
Over—

But
not
over—

Enter on
Schedule J,
line 8

10%

$0

$0 $9,700

...........

+

12%

9,700

9,700 39,475

$970.00

4,543

+

22%

39,475

39,475 84,200

84,200 160,725

14,382.50

+

24%

84,200

160,725 204,100

32,748.50

+

32%

204,100 510,300

46,628.50

+

510,300 .............

153,798.50 +

10%

$0

+

12%

9,700

4,543.00

+

22%

39,475

84,200 160,725

14,382.50

+

24%

84,200

160,725

160,725 204,100

32,748.50

+

32%

160,725

35%

204,100

204,100 306,175

46,628.50

+

35%

204,100

37%

510,300

306,175

82,354.75

+

37%

306,175

Schedule Y-1—Use if your 2019 filing status was Married
filing jointly or Qualifying widow(er) or you checked filing
status box 5 or 6 on Form 1040NR.
If
Schedule J,
line 7, is
Over—

But not
over—

$0 $19,400
19,400

Enter on
Schedule J,
line 8
...........

of the amount
over—

of the
amount
over—

..........

Schedule Z—Use if your 2019 filing status was Head of household.

If
Schedule J,
line 7, is:
Over—

But
not
over—

10%

$0

$0 $13,850

Enter on
Schedule J,
line 8
...........

of the amount
over—
10%

$0

78,950

$1,940.00

+

12%

19,400

13,850 52,850

$1,385.00

+

12%

13,850

78,950 168,400

9,086.00

+

22%

78,950

52,850 84,200

6,065.00

+

22%

52,850

168,400 321,450

28,765.00

+

24%

168,400

84,200 160,700

12,962.00

+

24%

84,200

321,450 408,200

65,497.00

+

32%

321,450

160,700 204,100

31,322.00

+

32%

160,700

408,200 612,350

93,257.00

+

35%

408,200

204,100 510,300

45,210.00

+

35%

204,100

612,350 ............

164,709.50 +

37%

612,350

510,300 ...........

152,380.00

+

37%

510,300

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2019 Qualified Dividends and Capital Gain Tax Worksheet—Line 8

Keep for Your Records

Use this worksheet only if both of the following apply.
• Your elected farm income on your 2022 Schedule J, line 2a, doesn't include any net capital gain.
• You (a) entered qualified dividends on your 2019 Form 1040, line 3a, or 2019 Form 1040-NR, line 10b; (b) entered capital gain distributions
directly on your 2019 Form 1040, line 6, or your 2019 Form 1040-NR, line 14, and weren't required to file Schedule D; or (c) filed Schedule D in
2019 and you answered “Yes” on lines 17 and 20 of that Schedule D.
1.
2.
3.

4.
5.
6.
7.
8.

9.
10.
11.
12.
13.
14.
15.

Amount from your 2022 Schedule J, line 7. If for 2019 you filed Form 2555, enter the
amount from line 3 of the 2019 Foreign Earned Income Tax Worksheet . . . . . . . . . . . . . . . 1.
Amount from your 2019 Form 1040, line 3a* (or your 2019 Form
1040-NR, line 10b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
Did you file Schedule D in 2019?*
Enter the smaller of line 15 or 16 of your 2019
Yes. Schedule D, but don't enter less than -0-.
. . . . 3.
.
Enter the amount from your 2019 Form 1040,
No. line 6, or 2019 Form 1040-NR, line 14.
Add lines 2 and 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
Amount, if any, from your 2019 Form 4952, line 4g . . . . . . . . . . . . . . 5.
Subtract line 5 from line 4. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.
Subtract line 6 from line 1. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
Enter one of the following three amounts depending on your
filing status.
• $39,375 if single or married filing separately, or if you checked
filing status box 1, 2, 3, 4, or 5 on Form 1040NR.
. . . . . . . . . . 8.
• $78,750 if married filing jointly or qualifying widow(er), or if you
checked filing status box 6 on Form 1040NR.
• $52,750 if head of household.
Enter the smaller of line 1 or line 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.
Enter the smaller of line 7 or line 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.
Subtract line 10 from line 9. This amount is taxed at 0% . . . . . . . . . . . . . . . . . . . . . . . . . . 11.
Enter the smaller of line 1 or line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.
Enter the amount from line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.
Subtract line 13 from line 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.

16.

Enter one of the following amounts depending on your filing status.
• $434,550 if single, or if you checked filing status box 2 on Form
1040NR.
• $244,425 if married filing separately, or if you checked filing status
. . . . . . . . . . 15.
box 5 on Form 1040NR.
• $488,850 if married filing jointly or qualifying widow(er), or if you
checked filing status box 5 or 6 on Form 1040NR.
• $461,700 if head of household.
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 2019 Tax Rate Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.

25.

Add lines 20, 23, and 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.

26.

Figure the tax on the amount on line 1. Use the 2019 Tax Rate Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.

27.

Tax. Enter the smaller of line 25 or line 26 here and on your 2022 Schedule J, line 8. If for 2019 you filed Form
2555, don't enter this amount on Schedule J, line 8. Instead, enter it on line 4 of the 2019 Foreign Earned Income Tax
Worksheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.

*If for 2019 you filed Form 2555, see the footnote in the 2019 Foreign Earned Income Tax Worksheet before completing this line.

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2019 Foreign Earned Income Tax Worksheet—Line 8

Keep for Your Records

Use this worksheet if you claimed the foreign earned income exclusion or housing exclusion on your 2019 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 2022 Schedule J, line 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
2a. Enter the amount from your (and your spouse's, if filing jointly) 2019 Form 2555, lines 45 and
50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2a.
b. Enter the total amount of any itemized deductions or exclusions you could not claim for 2019
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 2019 Tax Rate Schedules, the 2019 Qualified
Dividends and Capital Gain Tax Worksheet,* or the 2019 Schedule D Tax Worksheet in the 2019
Schedule D instructions,* whichever applies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5. Figure the tax on the amount on line 2c. Use the 2019 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 2022 Schedule J, line 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.
* Enter the amount from line 3 above on line 1 of the 2019 Qualified Dividends and Capital Gain Tax Worksheet or the 2019 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 2022 Schedule J, line 7, from line 6 of your 2019 Qualified Dividends and Capital Gain Tax Worksheet (line 10
of your 2019 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 2019 Qualified Dividends and Capital Gain Tax Worksheet or 2019 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 2019 Foreign Earned Income Tax Worksheet above.
1. Reduce (but not below zero) the amount you would otherwise enter on line 3 of your 2019 Qualified Dividends and Capital Gain Tax
Worksheet or line 9 of your 2019 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 2019 Qualified Dividends and Capital Gain Tax
Worksheet or line 6 of your 2019 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 2019 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 2019 Unrecaptured Section 1250 Gain Worksheet in the 2019 Instructions for
Schedule D (Form 1040).

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Line 9
If you used Schedule J to figure your tax
for:
• 2021 (that is, you entered the
amount from the 2021 Schedule J,
line 23, on your 2021 Form 1040,
1040-SR, or Form 1040-NR, line 16; or
2021 Form 1040-X, line 6), enter on
line 9 the amount from your 2021
Schedule J, line 15; or
• 2020 but not 2021, enter on line 9
the amount from your 2020 Schedule J,
line 3.
If you figured your tax for both 2020
and 2021 without using Schedule J, enter on line 9 the taxable income from
your 2020 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
2020, 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 2020
until at least 3 years after April 18, 2023
(or the date you file your 2022 tax return, if later).
Instructions for 2020 Taxable
Income Worksheet
Line 2. Any net capital loss deduction
on your 2020 Schedule D, line 21, isn't
allowed for income averaging purposes
to the extent it didn't reduce your capital

loss carryover to 2021. This could happen if the taxable income—shown on
your 2020 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 2020
capital loss carryover to 2021 (the sum
of your short- and long-term capital loss
carryovers) exceeds the excess of the
loss on your 2020 Schedule D, line 16,
over the loss on your 2020 Schedule D,
line 21. If you had any NOL carrybacks
to 2020, be sure you refigured your 2020
capital loss carryover to 2021.
Line 3. If you had an NOL for 2020,
enter the amount of that NOL from the
2020 Form 1045, Schedule A, line 24,
you filed with Form 1045 or Form
1040-X. If you didn't have an NOL for
2020, enter the portion, if any, of the
NOL carryovers and carrybacks to 2020
that weren't used in 2020 and were carried to years after 2020.
Example. The farmer didn't use income averaging for 2019, 2020, or 2021.
The taxable income on the farmer’s
2020 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 2020 taxable income, which the
farmer enters as a positive amount on
line 1 of the 2020 Taxable Income
Worksheet.
When the farmer filed their 2020 tax
return, the farmer had a $3,000 net capi-

J-7

tal 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 2021.
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 2020 NOL from
their 2020 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 2020 Schedule F,
the only other item on the farmer’s 2020
tax return.
The farmer enters $17,500 (the
$3,000 line 2 amount plus the $14,700
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 2023, the farmer will
enter the negative $6,200 amount on
their 2023 Schedule J as the farmer’s
2020 taxable income for income averaging purposes.

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2020 Taxable Income Worksheet—Line 9

Keep for Your Records

Complete this worksheet if you didn’t use Schedule J to figure your tax for 2021 and your 2020 taxable income was zero or less. See
the instructions above before completing this worksheet.
1. Figure the taxable income from your 2020 tax return (or as previously adjusted) without limiting it to
zero. If you had an NOL for 2020, don't include any NOL carryovers or carrybacks to 2020. Enter the
result as a positive amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. If there is a loss on your 2020 Schedule D, line 21, add that loss (as a positive
amount) and your 2020 capital loss carryover to 2021. Subtract from that sum the
amount of the loss on your 2020 Schedule D, line 16, and enter the result . . . . . . . .
2.
3. If you had an NOL for 2020, enter it as a positive amount. Otherwise, enter as a
positive amount the portion, if any, of the NOL carryovers and carrybacks to 2020
that weren't used in 2020 and were carried to years after 2020 . . . . . . . . . . . . . . . . .
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.

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1.

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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 2020 Tax Rate Schedules below;
• The 2020 Qualified Dividends and
Capital Gain Tax Worksheet, later;
• The 2020 Schedule D Tax Worksheet in the 2020 Schedule D instructions (but use the 2020 Tax Rate Schedules below when figuring the tax on the

Schedule D Tax Worksheet, lines 42 and
44); or
• The 2020 Foreign Earned Income
Tax Worksheet, later.
If your elected farm income includes
net capital gain, you must use the 2020
Schedule D Tax Worksheet to figure the
tax on the amount on line 11. However,
if you filed Form 2555 for 2020, you
must first complete the 2020 Foreign
Earned Income Tax Worksheet, and then
use the 2020 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
2020. If for 2020 you had a capital loss
that resulted in a capital loss carryover
to 2021, don't reduce the elected farm
income allocated to 2020 by any part of
the carryover.

2020 Tax Rate Schedules—Line 12
Schedule X—Use if your 2020 filing status was Single on
Form 1040-NR.
If
Schedule J,
line 11, is: But not
Over—
over—

Enter on
Schedule J,
line 12

$0 $9,875

...........

9,875 40,125

$987.50

40,125 85,525

Schedule Y-2—Use if your 2020 filing status was Married filing separately
on Form 1040-NR.

of the
amount
over—

If
Schedule J,
line 11, is:
Over—

But not
over—

Enter on
Schedule J,
line 12

10%

$0

$0

$9,875

...........

+

12%

9,875

9,875

40,125

$987.50

4,617.50

+

22%

40,125

40,125

85,525

85,525 163,300

14,605.50

+

24%

85,525

163,300 207,350

33,271.50

+

32%

207,350 518,400

47,367.50

+

518,400 .............

156,235.00 +

10%

$0

+

12%

9,875

4,617.50

+

22%

40,125

85,525 163,300

14,605.50

+

24%

85,525

163,300

163,300 207,350

33,271.50

+

32%

163,300

35%

207,350

207,350 311,025

47,367.50

+

35%

207,350

37%

518,400

311,025

83,653.75

+

37%

311,025

Schedule Y-1—Use if your 2020 filing status was Qualifying
widow(er) on Form 1040-NR.
If
Schedule J,
line 11, is: But not
Over—
over—
$0 $19,750

Enter on
Schedule J,
line 12
...........

of the amount
over—

of the
amount
over—

..........

Schedule Z—Use if your 2020 filing status was Head of household.
If
Schedule J,
line 11, is:
Over—

But not
over—

$0 $14,100

Enter on
Schedule J,
line 12

10%

$0

10%

$0

19,750 80,250

$1,975.00

+

12%

19,750

14,100

53,700

$1,410.00

+

12%

14,100

80,250 171,050

9,235.00

+

22%

80,250

53,700

85,500

6,162.00

+

22%

53,700

171,050 326,600

29,211.00

+

24%

171,050

85,500 163,300

13,158.00

+

24%

85,500

326,600 414,700

66,543.00

+

32%

326,600

163,300 207,350

31,830.00

+

32%

163,300

414,700 622,050

94,735.00

+

35%

414,700

207,350 518,400

45,926.00

+

35%

207,350

622,050 ............

167,307.50 +

37%

622,050

518,400

154,793.50

+

37%

518,400

J-9

...........

...........

of the amount
over—

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Keep for Your Records

2020 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 2022 Schedule J, line 2a, doesn't include any net capital gain.
• You (a) entered qualified dividends on your 2020 Form 1040, 1040-SR, or Form 1040-NR line 3a; (b) entered capital gain distributions
directly on your 2020 Form 1040, 1040-SR, or 1040-NR, line 7, and weren't required to file Schedule D; or (c) filed Schedule D in 2020 and you
answered “Yes” on lines 17 and 20 of that Schedule D.
1.

4.

Amount from your 2022 Schedule J, line 11. If for 2020 you filed Form 2555, enter the
amount from line 3 of the 2020 Foreign Earned Income Tax Worksheet . . . . . . . . . . . . . .
Amount from your 2020 Form 1040, 1040-SR, or 1040-NR,
line 3a* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
Did you file Schedule D in 2020?*
Enter the smaller of line 15 or 16 of your 2020
Yes. Schedule D, but don't enter less than -0-.
. . . . . 3.
Enter the amount from your 2020 Form 1040,
No. 1040-SR, or 1040-NR, line 7.
Add lines 2 and 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.

5.

Amount, if any, from your 2020 Form 4952, line 4g . . . . . . . . . . .

2.
3.

6.

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

7.

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

8.

9.
10.
11.
12.
13.
14.
15.

1.

6.

7.
Enter one of the following three amounts depending on your
filing status.
• $40,000 if single or married filing separately, or if you checked
filing status Single on Form 1040-NR.
• $80,000 if married filing jointly or qualifying widow(er) or if you . . . . . . . . . . . 8.
checked filing status Qualifying widow(er) on Form 1040-NR.
• $53,600 if head of household.
Enter the smaller of line 1 or line 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.
Enter the smaller of line 7 or line 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.
Subtract line 10 from line 9. This amount is taxed at 0% . . . . . . . . . . . . . . . . . . . . . . . . . 11.
Enter the smaller of line 1 or line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.
Enter the amount from line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.
Subtract line 13 from line 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.

16.

Enter one of the following amounts depending on your filing status:
• $441,450 if single.
. . . . . . . . . . . 15.
• $248,300 if married filing separately.
• $496,600 if married filing jointly or qualifying widow(er).
• $469,050 if head of household.
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 2020 Tax Rate Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.

25.

Add lines 20, 23, and 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.

26.

Figure the tax on the amount on line 1. Use the 2020 Tax Rate Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.

27.

Tax. Enter the smaller of line 25 or line 26 here and on your 2022 Schedule J, line 12. If for 2020 you filed Form
2555, don't enter this amount on Schedule J, line 12. Instead, enter it on line 4 of the 2020 Foreign Earned Income
Tax Worksheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.

* If for 2020 you filed Form 2555, see the footnote in the 2020 Foreign Earned Income Tax Worksheet before completing this line.

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2020 Foreign Earned Income Tax Worksheet—Line 12

Keep for Your Records

Use this worksheet if you claimed the foreign earned income exclusion or housing exclusion on your 2020 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 2022 Schedule J, line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2a. Enter the amount from your (and your spouse's, if filing jointly) 2020 Form 2555, lines 45 and
50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
b. Enter the total amount of any itemized deductions or exclusions you could not claim for 2020
because they were related to excluded income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
c. Subtract line 2b from line 2a. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3. Add lines 1 and 2c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4. Figure the tax on the amount on line 3. Use the 2020 Tax Rate Schedules, the 2020 Qualified
Dividends and Capital Gain Tax Worksheet,* or the 2020 Schedule D Tax Worksheet in the 2020
Schedule D instructions,* whichever applies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5. Figure the tax on the amount on line 2c. Use the 2020 Tax Rate Schedules . . . . . . . . . . . . . . . . . . .
6. Subtract line 5 from line 4. Enter the result. If zero or less, enter -0-. Also include this amount on
your 2022 Schedule J, line 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.
2a.
b.
c.
3.
4.
5.
6.

* Enter the amount from line 3 above on line 1 of the 2020 Qualified Dividends and Capital Gain Tax Worksheet or the 2020 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 2022 Schedule J, line 11, from line 6 of your 2020 Qualified Dividends and Capital Gain Tax Worksheet
(line 10 of your 2020 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 2020 Qualified Dividends and Capital Gain Tax Worksheet or 2020 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 2020 Foreign Earned Income Tax Worksheet above.
1. Reduce (but not below zero) the amount you would otherwise enter on line 3 of your 2020 Qualified Dividends and Capital Gain Tax
Worksheet or line 9 of your 2020 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 2020 Qualified Dividends and Capital Gain Tax
Worksheet or line 6 of your 2020 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 2020 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 2020 Unrecaptured Section 1250 Gain Worksheet in the 2020 Instructions for
Schedule D (Form 1040).

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Line 13
If you used Schedule J to figure your tax
for 2021 (that is, you entered the amount
from the 2021 Schedule J, line 23, on
your 2021 Form 1040, 1040-SR, or
1040-NR, line 16; or on Form 1040-X,
line 6, for 2021), enter on line 13 the
amount from your 2021 Schedule J,
line 3.
If you didn't use Schedule J to figure
your tax for 2021, enter on line 13 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 worksheet below to figure the
amount to enter on line 13.
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
until at least 3 years after April 18, 2023
(or the date you file your 2022 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, 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 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.
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
1040-X. 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. The farmer didn't use income averaging for 2019, 2020, or 2021.
The taxable income on the farmer’s
2021 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 2021
Schedule 1 (Form 1040), line 8a, of
$5,150. The $5,150 is the portion of the
2020 NOL that was remaining from
2019 to be carried to 2021. See the examples earlier. The farmer’s taxable income is limited to zero and the farmer
doesn’t have an NOL for 2021. The result is a negative $1,000, 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 capi-

2021 Taxable Income Worksheet—Line 13

tal 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 2022 (the farmer’s 2021 capital
loss carryover to 2022 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 2021 and didn't have
an NOL carryover from 2021 available
to carry to 2022 and later years. The
NOL deduction for 2021 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 2023, the farmer will
enter $6,000 on the farmer’s 2023
Schedule J as the 2021 taxable income
for income averaging purposes.
Keep for Your Records

Complete this worksheet if your 2021 taxable income was zero or less. See the instructions above 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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 13 . . . . . . . . . . . . . .

5.

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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 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 when figuring the tax on the Sched-

ule D Tax Worksheet, lines 44 and 46);
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 15. 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 16
Schedule X—Use if your 2021 filing status was Single.
If
Schedule J,
line 15, is:
Over—

But not
over—

Enter on
Schedule J,
line 16

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

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

$9,950

...........

10%

$0

$0 $9,950

...........

10%

$0

9,950

40,525

$995.00

+

12%

9,950

9,950 40,525

$995.00

+

12%

9,950

40,525

86,375

4,664.00

+

22%

40,525

40,525 86,375

4,664.00

+

22%

40,525

86,375 164,925

14,751.00

+

24%

86,375

86,375 164,925

14,751.00

+

24%

86,375

164,925 209,425

33,603.00

+

32%

164,925

164,925 209,425

33,603.00

+

32%

164,925

209,425 523,600

47,843.00

+

35%

209,425

209,425 314,150

47,843.00

+

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).
If
Schedule J,
line 15, is:
Over—

But not
over—

$0 $19,900
19,900

Enter on
Schedule J,
line 16
...........

..........

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

of the
amount
over—

If
Schedule J,
line 15, is:
Over—

But
not
over—

10%

$0

$0 $14,200

Enter on
Schedule J,
line 16
...........

of the amount
over—
10%

$0

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

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Keep for Your Records

2021 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 2022 Schedule J, line 2a, doesn't include any net capital gain.
• You (a) entered qualified dividends on your 2021 Form 1040, 1040-SR, or 1040-NR, line 3a; (b) entered capital gain distributions directly on
your 2021 Form 1040, 1040-SR, or 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.

4.

Amount from your 2022 Schedule J, line 15. If for 2021 you filed Form 2555, enter the
amount from line 3 of the 2021 Foreign Earned Income Tax Worksheet . . . . . . . . . . . . . . .
Amount from your 2021 Form 1040, 1040-SR, or 1040-NR,
line 3a* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
Did you file Schedule D in 2021?*
Enter the smaller of line 15 or 16 of your 2021
Yes. Schedule D, but don't enter less than -0-.
. . . . . 3.
Enter the amount from your 2021 Form 1040,
No. 1040-SR, or 1040-NR, line 7.
Add lines 2 and 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.

5.

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

2.
3.

1.

6.

5.
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.
. . . . . . . . . . 8.
• $80,800 if married filing jointly or qualifying widow(er).
• $54,100 if head of household.
Enter the smaller of line 1 or line 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.
Enter the smaller of line 7 or line 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.

9.
10.
11.
12.
13.
14.
15.

Subtract line 10 from line 9. This amount is taxed at 0% . . . . . . . . . . . . . . . . . . . . . . . . . . 11.
Enter the smaller of line 1 or line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.
Enter the amount from line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.
Subtract line 13 from line 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.

16.

Enter one of the following amounts depending on your filing status:
• $445,850 if single.
. . . . . . . . . . 15.
• $250,800 if married filing separately.
• $501,600 if married filing jointly or qualifying widow(er).
• $473,750 if head of household.
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 2022 Schedule J, line 16. If for 2021 you filed Form
2555, don't enter this amount on Schedule J, line 16. 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.

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2021 Foreign Earned Income Tax Worksheet—Line 16

Keep for Your Records

Use this worksheet if you claimed the foreign earned income exclusion or housing exclusion on your 2021 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 2022 Schedule J, line 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2a. Enter the amount from your (and your spouse's, if filing jointly) 2021 Form 2555, lines 45 and
50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
b. Enter the total amount of any itemized deductions or exclusions you could not claim for 2021
because they were related to excluded income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
c. Subtract line 2b from line 2a. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3. Add lines 1 and 2c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5. Figure the tax on the amount on line 2c. Use the 2021 Tax Rate Schedules . . . . . . . . . . . . . . . . . . .
6. Subtract line 5 from line 4. Enter the result. If zero or less, enter -0-. Also include this amount on
your 2022 Schedule J, line 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.
2a.
b.
c.
3.
4.
5.
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 2022 Schedule J, line 15, 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).

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.

J-15

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