Instructions 540 Es - 2017

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2017 Instructions for Form 540-ES
Estimated Tax For Individuals
General Information
If you and your spouse/RDP paid joint estimated tax payments, but
are now filing separate income tax returns, either of you may claim all
Installment Payments – Installments due shall be 30% of the required
of the amount paid, or you may each claim part of the joint estimated
annual payment for the 1st required installment, 40% of the required
payments. If you want the estimated tax payments to be divided, notify
annual payment for the 2nd required installment, no installment is due for
the FTB before you file the income tax returns so that the payments can
the 3rd required installment, and 30% of the required annual payment for
be applied to the proper account. The FTB will accept in writing, any
the 4th required installment.
divorce agreement (or court ordered settlement) or a statement showing
You are required to remit all your payments electronically once you make
the allocation of the payments along with a notarized signature of both
an estimate or extension payment exceeding $20,000 or you file an
taxpayers. The statements should be sent to:
original tax return with a total tax liability over $80,000. Once you meet
JOINT ESTIMATE CREDIT ALLOCATION MS F225
the threshold, all subsequent payments regardless of amount, tax type,
TAXPAYER SERVICES CENTER
or taxable year must be remitted electronically. Individuals who do not
FRANCHISE TAX BOARD
send the payment electronically will be subject to a 1% noncompliance
PO BOX 942840
penalty. For more information go to ftb.ca.gov and search for mandatory
SACRAMENTO CA 94240-0040
epay. Electronic payments can be made using Web Pay on the Franchise
Tax Board’s (FTB’s) website, electronic funds withdrawal (EFW) using tax
C
Limit on the Use of Prior Year’s Tax
preparation software, or your credit card.
Individuals who are required to make estimated tax payments, and
A
Purpose
whose 2016 California adjusted gross income is more than $150,000
(or $75,000 if married/RDP filing separately), must figure estimated tax
Use Form 540-ES, Estimated Tax for Individuals, and the 2017 CA
based on the lesser of 90% of their tax for 2017 or 110% of their tax for
Estimated Tax Worksheet, to determine if you owe estimated tax for 2017
2016 including AMT. This rule does not apply to farmers or fishermen.
and to figure the required amounts. Estimated tax is the tax you expect
Taxpayers with 2017 California adjusted gross income equal to or greater
to owe in 2017 after subtracting the credits you plan to take and tax you
than $1,000,000 (or $500,000 if married/RDP filing separately), must
expect to have withheld.
figure estimated tax based on their tax for 2017.
If you need to make a payment for your 2016 tax liability or make a
separate payment for any balance due on your 2016 tax return, use
D
When to Make Your Estimated Tax Payments
form FTB 3519, Payment for Automatic Extension for Individuals.
Pay your estimated payments by the dates shown below:
Certain taxpayers are limited in their use of the prior year’s tax as a basis
1st payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . April 18, 2017
for figuring their estimated tax. See Section C for more information.
2nd payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . June 15, 2017
Check for estimated payments we’ve received at ftb.ca.gov and search
3rd payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . September 15, 2017
for myftb account.
4th payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . January 16, 2018
Increasing your withholding could eliminate the need to make a large
*Due to the federal Emancipation Day holiday observed on April 17, 2017,
payment with your tax return. To increase your withholding, complete
tax returns filed and payments mailed or submitted on April 18, 2017, will
Employment Development Department (EDD) Form DE 4, Employee’s
be considered timely.
Withholding Allowance Certificate, and give it to your employer’s
Filing an Early Tax Return In Place of the 4th Installment. If you file
appropriate payroll staff. You can get this form from your employer, or
your 2017 tax return by January 31, 2018, and pay the entire balance
by calling EDD at 888.745.3886. You can download the Form DE 4 from
due, you do not have to make your last estimated tax payment. In
EDD’s website at edd.ca.gov or go to ftb.ca.gov and search for de 4.
addition, you will not owe a penalty for the fourth installment.
Form DE 4 specifically adjusts your California state withholding and is not
Annualization Option. If you do not receive your taxable income
the same as the federal Form W-4, Employee’s Withholding Allowance
evenly during the year, it may be to your advantage to annualize
Certificate.
your income. This method allows you to match your estimated tax
B
Who Must Make Estimated Tax Payments
payments to the actual period when you earned the income. You may
use the annualization schedule included with the 2016 form FTB 5805,
Generally, you must make estimated tax payments if you expect to owe at
Underpayment of Estimated Tax by Individuals and Fiduciaries.
least $500 ($250 if married/RDP filing separately) in tax for 2017 (after
subtracting withholding and credits) and you expect your withholding
Farmers and Fishermen. If you are a farmer or fisherman, and at least
two-thirds of your 2016 and 2017 gross income is from farming or
and credits to be less than the smaller of:
fishing, you may do either of the following:
1. 90% of the tax shown on your 2017 tax return; or
2. 100% of the tax shown on your 2016 tax return including Alternative
y Pay all of your estimated tax by January 16, 2018.
y File your tax return for 2017 on or before March 5, 2018, and pay the
Minimum Tax (AMT).
total tax due. In this case, you need not make estimated tax payments
Note:
for 2017. Use the 2016 form FTB 5805F, Underpayment of Estimated
y You do not have to make estimated tax payments if you are a
Tax by Farmers and Fishermen, to determine if you paid the required
nonresident or new resident of California in 2017 and did not have a
estimated tax. If the estimated tax is underpaid, attach the completed
California tax liability in 2016, see Section C for more information.
form FTB 5805F to the back of your tax return.
y If you are a military servicemember not domiciled in California, do
not include your military pay in your computation of estimated tax
Fiscal Year. If you file your tax return on a fiscal year basis, your due
payments. If you are the nonmilitary spouse of a servicemember
dates will be the 15th day of the 4th, 6th, and 9th months of your fiscal
year and the 1st month of the following fiscal year. If the due date falls on
you may or may not need to include your pay in your computation of
estimated tax payments. For more information, get FTB Pub. 1032,
a weekend, or legal holiday, use the next business day.
Tax Information for Military Personnel.
Form 540-ES Instructions 2016 Page 1

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