Instructions For Form 2210 - Underpayment Of Estimated Tax By Individuals, Estates, And Trusts - 2016

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2016
Department of the Treasury
Internal Revenue Service
Instructions for Form 2210
Underpayment of Estimated Tax by Individuals, Estates, and Trusts
Purpose of Form
Section references are to the Internal Revenue Code unless
otherwise noted.
Generally, use Form 2210 to see if you owe a penalty for
General Instructions
underpaying your estimated tax and, if you do, to figure the
amount of the penalty. Even if you aren't required to file Form
2210, you can use it to figure your penalty if you wish to do so. In
Future Developments
that case, enter the penalty on your return, but don't file Form
2210.
For the latest information about developments related to Form
2210 and its instructions, such as legislation enacted after they
Who Must File Form 2210
were published, go to
Use the flowchart at the top of Form 2210, page 1, to see if you
What's New
must file this form.
If box B, C, or D in Part II is checked, you must figure the
Personal exemption amount increased for certain taxpay­
penalty yourself and attach Form 2210 to your return.
ers. The personal exemption amount is increased to $4,050 for
!
2016. There is a phaseout of the exemption, the amount of
CAUTION
which is determined by the taxpayer's filing status and adjusted
The IRS Will Figure the Penalty for
gross income.
You
Limit on itemized deductions. For 2016, itemized deductions
for taxpayers with adjusted gross incomes above $155,650 may
If you didn't check box B, C, or D in Part II, you don't need to
be reduced.
figure the penalty. The IRS will figure any penalty for
underpayment of estimated tax and send you a bill. If you file
Health coverage tax credit. The health coverage tax credit
your return by April 18, 2017, no interest will be charged on the
has been extended.
penalty if you pay the penalty by the date shown on the bill. If
Reminders
you want us to figure the penalty for you, complete your return as
usual. Leave the penalty line on your return blank; don't file Form
Saturday, Sunday, or legal holiday. Generally, if a due date
2210.
for performing any act for tax purposes falls on a Saturday,
Other Methods of Figuring the
Sunday, or legal holiday, the act is considered to be performed
timely if it's performed no later than the next day that isn't a
Penalty
Saturday, Sunday, or legal holiday. A legal holiday is any legal
holiday in the District of Columbia. These instructions make the
We realize that there are different ways to figure the correct
adjustment for Saturdays, Sundays, and legal holidays.
penalty. You don't have to use the method used on Form 2210
as long as you enter the correct penalty amount on the
Additional Medicare Tax. A 0.9% Additional Medicare Tax
“Estimated tax penalty” line of your return.
applies to Medicare wages, railroad retirement act (RRTA)
compensation, and self-employment income over a threshold
However, if you are required to file Form 2210 because one
amount based on your filing status. See Form 8959.
or more of the boxes in Part II applies, you must complete
certain lines and enter the penalty on the “Estimated tax penalty”
Net Investment Income Tax. You may be subject to Net
line of your return.
Investment Income Tax (NIIT). NIIT is a 3.8% (0.038) tax on the
If you use the short method, complete Part I, check the
lesser of net investment income or the excess of your modified
box(es) that applies in Part II, and complete Part III. Enter the
adjusted gross income over a threshold amount. See Form
penalty on Form 2210, line 17, and on the “Estimated tax
8960.
penalty” line on your tax return.
Premium Tax Credit. You may be eligible to claim the premium
If you use the regular method, complete Part I, check the
tax credit (PTC). The PTC is a tax credit for certain people who
box(es) that applies in Part II, complete Part IV, Section A, and
enroll, or whose family member enrolls, in a qualified health plan
the Penalty Worksheet, later. Enter the penalty on Form 2210,
offered through a Health Insurance Marketplace (also called an
line 27, and on the “Estimated tax penalty” line on your tax
Exchange). The PTC provides financial assistance to pay the
return.
premiums by reducing the amount of tax you owe, giving you a
If you use the annualized income installment method,
refund, or increasing your refund amount. Advance payment of
complete Part I, check the box(es) that applies in Part II,
the PTC may be made through the Marketplace directly to your
complete Schedule AI, complete Part IV, Section A, and the
insurance provider. If you received premium assistance through
Penalty Worksheet, later. Enter the penalty on Form 2210,
advance payments of the PTC in 2016, and the amount
line 27, and on the “Estimated tax penalty” line on your tax
advanced exceeded the amount of PTC you can take, you could
return.
be subject to a penalty for underpaying your estimated tax. For
Who Must Pay the
example, you completed Form 8962, Premium Tax Credit, and
have additional income tax liability because too much was
Underpayment Penalty
advanced to your insurance provider. For more information
about the PTC and advance payments of the PTC, see Form
In general, you may owe the penalty for 2016 if the total of your
8962 and Pub. 974.
withholding and timely estimated tax payments didn't equal at
least the smaller of:
Dec 22, 2016
Cat. No. 63610I

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