Instructions For Form 2210 - 2008 (Page 5 of 6) in pdf

second rate period. If there are no unapplied payments, enter

4. Enter on line 22, column (b), one-half of the amount from

“92” (see Table 2 earlier).

Form 2210, Part I, line 9. In columns (c) and (d), enter

one-fourth of that amount.

Line 30

5. Skip column (b), lines 20 and 23.

Figure line 30 in the same manner as line 28.

Example 7. Assume the same facts as in Example 6. The

Part I—Annualized Income Installments

$2,000 underpayment for column (b) was paid in full when the

To figure the amount of each required installment, Schedule AI

third estimated tax payment was made on 9/15/08.

selects the smaller of the annualized income installment or the

Enter “77” on line 29, column (b) — the number of days from

regular installment (that has been increased by the amount

6/30/08 to 9/15/08. In the same column, enter $21.04 on line 30

saved by using the annualized income installment method in

($2,000 × (77 ÷ 366) × .05). See illustration below.

figuring any earlier installments).

(a)

(b)

Line 1

6/30/08

For each period (column), figure your total income minus your

Days:

adjustments to income. Include your share of partnership or S

corporation income or loss items for the period.

If you are self-employed, be sure to take into account the

21.04

deduction for one-half of your self-employment tax. To figure

30 $

this amount for each period, complete Schedule AI, Part II, and

divide the amount in columns (a) through (d) on line 34 by 8,

Rate Periods 3 and 4

4.8, 3, and 2, respectively.

If an underpayment balance remains for these rate periods,

calculate the penalty using the same steps as explained under

Line 2

the instructions for Rate Period 1, but use the dates and interest

rate on lines 31 and 32 for rate period 3 and lines 33 and 34 for

Estates and trusts, do not use the amounts shown in columns

rate period 4.

(a) through (d). Instead, use 6, 3, 1.71429, and 1.09091,

respectively, as the annualization amounts.

Schedule AI—Annualized Income

Line 6

Installment Method

If you itemized your deductions, multiply line 4 of each column

If your income varied during the year because, for example, you

by line 5 and enter the result on line 6. But if line 3 is more than

operated your business on a seasonal basis, you may be able

$159,950 ($79,975 if married filing separately), use the

to lower or eliminate the amount of one or more required

worksheet below to figure the amount to enter on line 6.

installments by using the annualized income installment

Complete the worksheet for each period, as necessary.

method. Use Schedule AI to figure the required installments to

enter on Form 2210, Part IV, line 18.

Itemized Deductions Worksheet —Line 6

If you use Schedule AI for any payment due date, you

1. Enter line 4 of Schedule AI . . . . . . . . . . . . . .

must use it for all payment due dates.

2. Enter the amount included in line 1 for medical

CAUTION

and dental expenses, investment interest,

To use the annualized income installment method to figure

casualty or theft losses, and gambling losses

the penalty, you must do all of the following.

(after applying the same limits used in line 1) . .

1. Complete Schedule AI, Part I (and Part II, if necessary).

3. Subtract line 2 from line 1 . . . . . . . . . . . . . . .

Enter the amounts from Schedule AI, Part I, line 25, columns

4. Enter line 5 of Schedule AI . . . . . . . . . . . . . .

(a) through (d), in the corresponding columns of Form 2210,

Part IV, line 18.

5. Multiply line 1 by line 4 . . . . . . . . . . . . . . . . .

2. Complete Part IV to figure the penalty.

Note. If line 3 is zero, your deduction is not

3. Check box C in Part II.

limited. Stop here and enter line 5 above on

4. Attach Form 2210, Parts I, II, IV, and Schedule AI to your

Schedule AI, line 6.

return.

6. Multiply line 3 by line 4 . . . . . . . . . . . . . . . . .

Additional information. See Pub. 505, chapter 4, for more

7. Multiply line 6 by 80% (.80) . . . . . . . . . . . . . .

details about the annualized income installment method and a

8. Enter line 3 of Schedule AI . . . . . . . . . . . . . .

completed example. Estates and trusts, see Notice 87-32.

9. Enter $159,950 ($79,975 if married filing

Individuals filing Form 1040NR or 1040NR-EZ. If you are

separately) . . . . . . . . . . . . . . . . . . . . . . . . .

filing Form 1040NR or 1040NR-EZ and you did not receive

wages as an employee subject to U.S. income tax withholding,

10. Subtract line 9 from line 8 . . . . . . . . . . . . . . .

10.

follow these modified instructions for Schedule AI.

Note. If line 10 is zero or less, your deduction is

1. Skip column (a).

not limited. Stop here and enter line 5 above on

2. Enter on line 1 your income for the period that is

Schedule AI, line 6.

effectively connected with a U.S. trade or business.

11. Multiply line 10 by 3% (.03). Enter the result as

3. Increase the amount on line 17 by the amount

a decimal . . . . . . . . . . . . . . . . . . . . . . . . . .

11.

determined by multiplying your income for the period that is not

effectively connected with a U.S. trade or business by the

12. Enter the smaller of line 7 or line 11 . . . . . . . .

12.

following.

13. Divide line 12 by 1.5 . . . . . . . . . . . . . . . . . .

13.

•

In column (b), 72%.

•

In column (c), 45%.

14. Subtract line 13 from line 12 . . . . . . . . . . . . .

14.

•

In column (d), 30%.

15. Subtract line 14 from line 5. Enter the result

However, if you can use a treaty rate lower than 30%, use

here and in the appropriate columns of

the percentages determined by multiplying your treaty rate by

Schedule AI, line 6 . . . . . . . . . . . . . . . . . . .

15.

2.4, 1.5, and 1, respectively.

-5-

Instructions For Form 2210 - 2008 Page 5

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