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Department of the Treasury
Internal Revenue Service
Instructions for Form 2210
Underpayment of Estimated Tax by Individuals, Estates, and Trusts
complete Schedule AI and Part IV. Enter the penalty on line 31
Section references are to the Internal Revenue Code unless
and on the “Estimated tax penalty” line on your tax return.
otherwise noted.
General Instructions
Who Must Pay the
Underpayment Penalty
What’s New
In general, you may owe the penalty for 2009 if the total of your
Decreased estimated tax payments for qualified individuals
withholding and timely estimated tax payments did not equal at
with small businesses. For 2009, qualified individuals with
least the smaller of:
small businesses may be eligible to make smaller estimated tax
1. 90% of your 2009 tax, or
payments. If you qualify, your required annual payment for 2009
2. 100% of your 2008 tax. (Your 2008 tax return must cover
is the smaller of 90% of the tax shown on your 2008 tax return
a 12-month period.)
or 90% of the tax shown on your 2009 tax return.
For more information, see Qualified individuals with small
Special rules for certain individuals. Different percentages
businesses, on this page.
are used for farmers and fishermen, certain higher income
taxpayers, and qualified individuals with small businesses.
Purpose of Form
Farmers and fishermen. If at least two-thirds of your gross
Generally, use Form 2210 to see if you owe a penalty for
income for 2008 or 2009 is from farming and fishing, substitute
underpaying your estimated tax and, if you do, to figure the
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% for 90% in (1) above. See Farmers and fishermen on
amount of the penalty. If you are not required to file Form 2210,
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page 2 to see if you qualify.
you can use it to figure your penalty if you wish to do so. In that
case, enter the penalty on your return, but do not file Form
Higher income taxpayers. If your adjusted gross income
2210.
(AGI) for 2008 was more than $150,000 ($75,000 if your 2009
filing status is married filing separately), substitute 110% for
Who Must File Form 2210
100% in (2) above.
Use the flowchart at the top of page 1 of Form 2210 to see if
Qualified individuals with small businesses. If you meet
you must file this form.
the qualifications listed below and checked box “F” in Part II,
If box B, C, or D in Part II is checked, you must figure
substitute 90% for 100% in (2) above.
•
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the penalty yourself and attach Form 2210 to your
Your AGI in 2008 was less than $500,000 ($250,000 if
return.
married filing separately in 2009).
CAUTION
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More than 50% of your gross income in 2008 was from a
The IRS Will Figure the Penalty for You
small business, which is defined as a trade or business in which
you were an owner during the calendar year 2008 and that
If you did not check box B, C, or D in Part II, you do not need to
averaged less than 500 employees for 2008.
figure the penalty or file Form 2210. The IRS will figure any
penalty for underpayment of estimated tax and send you a bill.
Penalty figured separately for each required payment. The
If you file your return by April 15, 2010, no interest will be
penalty is figured separately for each installment due date.
charged on the penalty if you pay the penalty by the date shown
Therefore, you may owe the penalty for an earlier due date
on the bill.
even if you paid enough tax later to make up the underpayment.
This is true even if you are due a refund when you file your tax
If you want us to figure the penalty for you, complete your
return. However, you may be able to reduce or eliminate the
return as usual. Leave the penalty line on your return blank; do
penalty by using the annualized income installment method. For
not file Form 2210.
details, see the Schedule AI instructions beginning on page 5.
Other Methods of Figuring the Penalty
Return. In these instructions, “return” refers to your original
We realize that there are different ways to figure the correct
return. However, an amended return is considered the original
penalty. You do not have to use the method used on Form 2210
return if it is filed by the due date (including extensions) of the
as long as you enter the correct penalty amount on the
original return. Also, a joint return that replaces previously filed
“Estimated tax penalty” line of your return.
separate returns is considered the original return.
However, if you are required to file Form 2210 because one
Exceptions to the Penalty
or more of the boxes in Part II applies to you, you must
complete certain lines and enter the penalty on the “Estimated
You will not have to pay the penalty if either of the following
tax penalty” line of your return.
applies.
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If you use the short method, complete Part I, check the
You had no tax liability for 2008, you were a U.S. citizen or
box(es) that applies in Part II, and complete Part III. Enter the
resident alien for the entire year (or an estate of a domestic
penalty on line 17 and on the “Estimated tax penalty” line on
decedent or a domestic trust), and your 2008 tax return was (or
your tax return.
would have been had you been required to file) for a full 12
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If you use the regular method, complete Part I, check the
months.
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box(es) that applies in Part II, and complete Part IV. Enter the
The total tax shown on your 2009 return minus the amount of
penalty on line 31 and on the “Estimated tax penalty” line on
tax you paid through withholding is less than $1,000. To
your tax return.
determine whether the total tax is less than $1,000, complete
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If you use the annualized income installment method,
lines 1 through 7.
complete Part I, check the box(es) that applies in Part II, and
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