Instructions For Form Mi-2210 - Underpayment Of Estimated Income Tax - 2006

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2006 MI-2210, Page 3
Instructions for Form MI-2210
Underpayment of Estimated Income Tax
GENERAL INSTRUCTIONS
Complete the MI-2210 form and the annualization
worksheet and attach them to your Michigan annual tax
Use this form to determine if you owe penalty and interest
return (individual or fiduciary).
for failing to make estimated payments or for underpaying
Completing the Worksheet
the estimated tax due. You can be charged interest (and
possibly penalty) if your payment was insufficient or late
You must annualize for the entire year by completing all
in any quarter. This is true even if you are due a refund
four columns.
when you file your tax return. The interest and penalty
Complete one column at a time. Line 1 must be the year-
are figured separately for each due date; you could still
to-date total for each period in the appropriate column.
owe interest and penalty even if you made up an earlier
Each column is an accumulating total and should include
underpayment with an overpayment later.
the amount from the previous column plus any additional
The estimated tax payments must be made timely, in four
income earned to date. The last column should equal the
equal installments, and the sum of the installments must
amount on your MI-1040, line 14.
equal:
Example: You earned $5,000 in the first three months of
• 90 percent of the tax shown on your 2006 tax return,
the year. You earned an additional $4,000 during April
or
and May. Enter on worksheet line 1, $5,000 in the first
column and $9,000 in the second column.
• 100 percent of the tax shown on your 2005 tax return,
or
Each entry on worksheet line 12 will be MI-2210, Part 1,
• 110 percent of the tax shown on your 2005 return if
line 8, divided by four regardless of how the income is
Adjusted Gross Income (AGI) was $150,000 or more
earned. If you add worksheet line 16 across the columns,
for joint or single filers or $75,000 or more for married
the sum should equal the total shown on MI-2210, line 8.
filing separately.
Taxpayers who annualize must also enter 25 percent of
Because this is a complicated form, you may choose to
tax withheld in each column of the MI-2210, line 11, or
have Treasury compute your interest and penalty and send
submit documentation to substantiate uneven distribution
you a bill instead of filing the form yourself. If you want
of withholding.
Treasury to figure your interest, complete your MI-1040
Special Rules for Farmers, Fishermen and
form as usual, leaving the interest line blank and do not
Seafarers
attach form MI-2210. Interest computed on this form and
Do not file this form if BOTH of these apply:
penalty charged for failing to file or underpaying estimates
• Your gross income from farming, fishing or seafaring
will be the same regardless of whether you pay with your
is at least 2/3 of your annual gross income for 2005 or
return or if Treasury bills you.
2006, AND
You may avoid penalty and interest and should not
• You filed your MI-1040 and paid the entire tax due by
file this form IF:
March 1, 2007.
• You had no tax liability for 2005 (if you had to file), or
Where to Get Forms
you were not required to file a 2005 return and your
2005 federal tax return was for a full 12 months.
If you need to file estimated tax, a 2007 Michigan estimated
• The total tax on your 2006 return minus the amount you
income tax formset (MI-1040ES for individuals, MI-1041ES
for fiduciaries) is available on the Treasury Web site at
paid in withholding and all your credits is $500 or less.
or
by
calling
• You made timely estimated tax payments.
toll-free 1-800-827-4000 to have tax forms mailed to you.
• No penalty is charged if estimates were not required in
LINE-BY-LINE INSTRUCTIONS
the immediately preceding year, however interest may
still be due.
Before completing Part 1, add MI-1040 lines 34, 35, 36,
37 and 38. Subtract this sum from MI-1040, line 28. If
Annualizing
the result is $500 or less, do not complete this form. For
If you receive income unevenly during the year (i.e., from
MI-1041, subtract line 23 from line 22. If the result is
a seasonal business, capital gain, severance pay or bonus)
$500 or less, do not complete this form.
you may annualize your income.

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