Form 502 Up Draft - Underpayment Of Estimated Maryland Income Tax By Individuals - 1998

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UNDERPAYMENT OF ESTIMATED
INSTRUCTIONS
PAGE 2
FOR
MARYLAND INCOME TAX
FORM 502UP
1998
BY INDIVIDUALS
GENERAL INSTRUCTIONS
Lines 16 through 18 determine the amount of interest due for each
underpaid quarter.
Section 10-815 of the Tax-General Article of the Annotated Code
Line 16
of Maryland requires every individual, or individuals filing jointly, who
The factors represent the interest rate for the portion of the year
receives taxable income which is not subject to Maryland withholding
between the due date of each quarter and the due date of the next
or from which not enough Maryland tax is withheld to file a Declara-
quarter. If your estimated tax payment was not timely, but was paid
tion of Estimated Tax if the income can be expected to develop a tax
earlier than the due date of the next quarter, you may adjust the
of more than $500.00 in excess of the Maryland withholding. Fur-
factor by dividing the number of days from the date the payment was
thermore, Sections 13-602 and 13-702 stipulate that any individual so
due to the date it was paid by 365 and multiplying the result by 13%.
required to file, who either (1) fails to file on the date or dates pre-
Apply this adjusted factor to the underpaid amount on line 15.
scribed; (2) fails to pay the installment or installments when due; or
(3) estimates a tax less than ninety (90) percent of the developed tax
Line 17
shown on the return for the current taxable year and less than the
Using the factors on line 16 or the adjusted factor described
tax paid for the prior year, shall be subject to penalty and interest.
above, determine the amount of interest due for each quarter and
enter the amounts in the appropriate columns.
WHO MUST FILE
Line 18
Add all interest amounts in Columns 1 through 4 on line 17. Enter
If you believe that you are liable for interest for one of the reasons
the total interest on the appropriate line of your tax return.
outlined above, please complete and submit this form with your tax
If the interest calculated on line 18 is zero because your income
return.
was not received evenly throughout the year, enter code number 301
If you meet one of the exceptions shown on page 1, you are not
in the box marked “code number” on page 2 of Form 502. Attach this
required to file this form.
form to your Form 502 or 505.
If you want us to figure the interest for you, complete your return as
usual. Do not file Form 502UP. You will be notified of any interest due.
FARMERS AND FISHERMEN
SPECIFIC INSTRUCTIONS
If your gross income from farming or fishing is at least two-thirds
of your total estimated gross income for the year, the 1998 declaration
Lines 1 through 10 are used to determine the minimum amount
and full payment of the estimated tax is due on or before January 15,
required to be paid by estimated or withholding tax to avoid interest.
1999. In lieu of filing the declaration, you may elect to file your full
and complete annual return on or before March 1, 1999 and make full
Lines 1– 4
payment of the developed tax at that time.
Enter the amounts specified from your 1998 Form 502 or 505.
If you fail to do either of the above, and the income not subject to
Line 5
withholding or from which not enough Maryland tax is withheld would
Multiply the amount on line 5 of Form 502TP by 4.875% (.04875).
be expected to develop a tax of more than $500.00, then you are
Apply the local tax rate in effect for your return and enter the sum
subject to interest. To compute the applicable interest charge, com-
on this line.
plete lines 1 through 10 of this form. Enter the amount from line 10 on
line 13, column 4 and complete the rest of the form. Only column 4
Line 9
will have entries.
If your 1997 tax was corrected or amended, be sure to include any
To claim exemption from this interest charge or to use the special
additional tax when calculating your total tax for the year.
calculation, enter code number 300 in the box marked “code number”
Lines 11 through 15 will determine which periods are underpaid
on page 2 of Form 502.
and the amount of underpayment.
Line 11
INCOME TAXABLE BY ANOTHER STATE
Enter in each column the income received for the period of the
year covered by that column. If your income was received evenly
If at least 90% of your taxable income is taxable by another state,
throughout the year, enter one-fourth of line 1 in column 1, one-half
and the underpayment is not greater than the local tax, no interest is
of line 1 in column 2, three-fourths of line 1 in column 3 and an
due and you are not required to file this form.
amount equal to line 1 in column 4. Otherwise, allocate to each
To claim exemption from this interest charge, enter code number
period the amount of income received between the dates for each
302 in the box marked “code number” on page 2 of Form 502.
installment shown at the top of each column. NOTE: Regardless of
whether you use an even distribution or base your entries on the
actual receipt dates, each successive column will include the
amount from the prior columns. See the example in the instructions
for line 14.
Line 14
Enter in each column the sum of any estimated payments you
have made and any Maryland tax withheld for the period covered by
that column. NOTE: Just as in line 11, each successive entry will
include the amount from the prior columns. For example, if you paid
$500 in estimated payments each quarter, the first column will con-
tain $500, the second $1,000, the third $1,500 and the fourth $2,000.

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