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Short Method

Line 2 – Form 541 filers. Do not use amounts

Line 10 – Form 541 filers. Figure the tax on the

shown in column (a) through column (d). Instead,

amount in each column of line 9 using the tax

You may use the short method only if you are a

use 6, 3, 1.71429, and 1.09091, respectively, as

table or tax rate schedule in your tax booklet.

calendar year taxpayer and:

the annualization amounts.

Also, include any tax from:

1. You made no estimated tax payments or your

•

Line 6 – Multiply line 4 by line 5 and enter the

FTB 5870A, Tax on Accumulation Distribution

only payments were withheld California

result on line 6. Your annualized itemized deduc-

of Trusts;

income tax; or

•

tions are limited if, in any quarter, line 3 is

IRC Section 644, tax on trusts; or

2. You paid estimated tax in four equal amounts

•

greater than:

IRC Section 453A tax.

on the due dates.

•

$233,556 (married filing joint or qualifying

Line 11 – If your exemption credits were limited

Note: If any payment was made earlier than the

widow(er)); or

by adjusted gross income (AGI), it may be to

due date, you may use the short method, but

•

$116,777 (single or married filing separate);

your advantage to make a separate computation

using it may cause you to pay a larger penalty

for each period. If you choose, you may com-

than using the regular method. If the payment

•

$175,166 (head of household).

plete the exemption credit worksheet in your tax

was only a few days early, the difference is likely

booklet for each period.

to be small.

Use the following worksheet to figure the amount

to enter on line 6 for each period line 3 reaches

Line 13 – Enter the special credits you are enti-

You may not use the short method if either of

the above amounts.

tled to because of events that occurred during

the following apply:

the months shown in the column headings.

1 Enter the amount from Part III,

1. You made any estimated tax payment late; or

line 4 . . . . . . . . . . . . .

Credit Limitation – If your special credits were

2. You answered ‘‘Yes’’ to Part I, Question 3.

2 Using California amounts, add

limited by tentative minimum tax (TMT), it may be

If you can use the short method, use Part II,

the amounts on federal Schedule

to your advantage to make a separate computa-

line 1 through line 10 to figure your total under-

A, line 4, line 13 and line 19 plus

tion for each period. If you choose, you may

payment for the year, and line 11 through line 13

any gambling losses included

complete a separate Schedule P (540 or 541) for

to figure the penalty.

on line 27 . . . . . . . . . . .

each period.

3 Subtract line 2 from line 1 . .

Part III – Annualized Income

Form 540NR Instructions for Part III

4 Enter the number from Part III,

Use these instructions only if you are filing

Installment Method

line 5 . . . . . . . . . . . . .

Form 540NR.

If your income varied during the year, you may

5 Multiply the amount on line 1

Line 1 – Enter your total adjusted gross income

be able to lower or eliminate the amount of one

by line 4 . . . . . . . . . . . .

(AGI) for each period. Your total AGI is your AGI

or more required installments by using the

Note: If the amount on line 3 is

for the period from all sources.

annualized income installment method. Use

zero, stop here and enter the

Line 12 – As a nonresident or part-year resident,

Part III to figure the required installment amount

amount from line 5 on Part III,

you must figure your tax based on your total

to enter on Worksheet II – Regular Method to

line 6.

income. You then must determine your California

Figure Your Underpayment and Penalty, line 1.

6 Multiply the amount on line 3

tax liability by multiplying the tax by the ratio of

Use line 1 through line 16 to compute your cur-

by the number on line 4 . . .

California AGI to total AGI. To do this, complete

rent year tax, per quarter, based on your income

7 Multiply the amount on line 6 by

Worksheet I below.

as you earned it. Then, use line 17 through

80% (.80) . . . . . . . . . . .

California AGI is all of the income you earned

line 23 to compute your required installment for

8 Enter the amount from Part III,

while you were a California resident plus any

each quarter. (The total of all amounts entered

line 3 . . . . . . . . . . . . .

income received from sources within California

on line 23 should equal the amount from Part II,

while you were a nonresident, less applicable

line 6.)

9 Enter the amount shown above

income adjustments. For more information, see

for your filing status . . . . .

If you use the annualized income installment

the instructions for Schedule CA (540NR), Cali-

method for any payment due date, you must use

10 Subtract line 9 from line 8 . .

fornia Adjustments – Nonresident or Part-Year

it for all payment due dates. To figure the

11 Multiply the amount on line 10

Residents, column E.

amount of each required installment, Part III

by 6% (.06) . . . . . . . . . .

Line 13 – Refigure Form 540NR, line 31 through

automatically selects the smaller of the

12 Enter the smaller of line 7 or

line 42 prorating the credits on line 31 through

annualized income installment or the regular

line 11 . . . . . . . . . . . . .

line 36 using the ratio from Line D of Worksheet I

installment (increased by the amount saved by

below.

using the annualized income installment method

13 Subtract line 12 from line 5.

in figuring earlier installments).

Enter the result here and on

Part III, line 6 . . . . . . . .

Note: If you are filing Form 540NR, see

Form 540NR Instructions for Part III at the end of

this section.

Line 1 – Figure your total income for the period

minus your adjustments to income for the period.

Include your share of partnership or S corpora-

tion income or loss items for the period.

Worksheet I – Prorated Tax for Form 540NR Filers

1/1/98 to

3/31/98

5/31/98

8/31/98

12/31/98

A California AGI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.4

1.5

B Annualization amounts . . . . . . . . . . . . . . . . . . . . . . . . . . .

C Multiply line A by line B . . . . . . . . . . . . . . . . . . . . . . . . . .

D Ratio. Divide line C by Part III, line 3. . . . . . . . . . . . . . . . . . .

E Subtract Part III, line 11 from Part III, line 10 . . . . . . . . . . . . . .

F Multiply line D by line E. Enter the result here and on Part III,

line 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page 2

FTB 5805 Instructions 1998

Instructions For Form Ftb 5805 - Underpayment Of Estimated Tax By Individuals And Fiduciaries - 1998 Page 2

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