Publication 505 - Tax Withholding And Estimated Tax Page 39

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If you use your actual withholding, you must
January 12, 2003, for the third and fourth peri-
Ben has an underpayment (line 30) for each
check the box on line 1c, Part I of Form 2210 and
payment period even though his withholding and
ods. Because the total of his withholding and
complete Form 2210 and file it with your return.
estimated tax payments for the third and fourth
estimated tax payments, $5,228 ($3,228 +
periods were more than his required install-
$1,000 + $1,000), was less than 90% of his 2002
ments (line 23). This is because the estimated
tax ($6,328), and was also less than his 2001 tax
Regular Installment Method
tax payments made in the third and fourth peri-
($6,116), Ben knows he owes a penalty for un-
ods are first applied to underpayments for the
derpayment of estimated tax. He decides to fig-
The filled-in form for the following example is
earlier periods. Part IV, Section A, of Ben’s Form
ure the penalty on Form 2210 and pay it with his
shown at the end of this chapter.
2210 is shown at the end of this chapter.
$1,803 tax balance ($7,031 − $5,228) when he
Example 4.6. Ben Brown’s 2002 total tax
files his tax return on April 15, 2003.
(Form 1040, line 61) is $7,031, the total of his
Annualized Income Installment
Ben’s required annual payment (Part II, line
$4,685 income tax and $2,346 self-employment
Method (Schedule AI)
15) is $6,116. Because his income and withhold-
tax. (His 2001 AGI was less than $150,000.) He
ing were distributed evenly throughout the year,
does not owe any other taxes or claim any cred-
If you did not receive your income evenly
Ben enters one-fourth of his required annual
its other than for withholding. His 2001 tax was
throughout the year (for example, your income
payment, $1,529, in each column of line 23. On
$6,116.
from a repair shop you operated was much
line 24, he enters one-fourth of his withholding,
Ben’s employer withheld $3,228 income tax
larger in the summer than it was during the rest
$807 in the first two columns and $1,807 ($807
during 2002. Ben made no estimated tax pay-
of the year), you may be able to lower or elimi-
plus $1,000 estimated tax payment) in the last
ment for either the first or second period, but he
nate your penalty by figuring your underpayment
paid $1,000 each on September 2, 2002, and
two columns.
using the annualized income installment
Table 4 – 1. Calendar to Determine the Number of Days a Payment is Late
Instructions. First, find the number for the payment due date. Then, find the number for the date the payment was made. Finally, subtract
the payment due date number from the payment due date number. The result is the number of days the payment is late.
Example. The payment due date is June 15 (61). The payment was made on November 4 (203). The payment is 142 days late (203 – 61).
Tax Year 2002
Day of
2002
2002
2002
2002
2002
2002
2002
2002
2002
2003
2003
2003
2003
Month
April
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
1
16
47
77
108
139
169
200
230
261
292
320
351
2
17
48
78
109
140
170
201
231
262
293
321
352
3
18
49
79
110
141
171
202
232
263
294
322
353
4
19
50
80
111
142
172
203
233
264
295
323
354
5
20
51
81
112
143
173
204
234
265
296
324
355
6
21
52
82
113
144
174
205
235
266
297
325
356
7
22
53
83
114
145
175
206
236
267
298
326
357
8
23
54
84
115
146
176
207
237
268
299
327
358
9
24
55
85
116
147
177
208
238
269
300
328
359
10
25
56
86
117
148
178
209
239
270
301
329
360
11
26
57
87
118
149
179
210
240
271
302
330
361
12
27
58
88
119
150
180
211
241
272
303
331
362
13
28
59
89
120
151
181
212
242
273
304
332
363
14
29
60
90
121
152
182
213
243
274
305
333
364
15
0
30
61
91
122
153
183
214
244
275
306
334
365
16
1
31
62
92
123
154
184
215
245
276
307
335
17
2
32
63
93
124
155
185
216
246
277
308
336
18
3
33
64
94
125
156
186
217
247
278
309
337
19
4
34
65
95
126
157
187
218
248
279
310
338
20
5
35
66
96
127
158
188
219
249
280
311
339
21
6
36
67
97
128
159
189
220
250
281
312
340
22
7
37
68
98
129
160
190
221
251
282
313
341
23
8
38
69
99
130
161
191
222
252
283
314
342
24
9
39
70
100
131
162
192
223
253
284
315
343
25
10
40
71
101
132
163
193
224
254
285
316
344
26
11
41
72
102
133
164
194
225
255
286
317
345
27
12
42
73
103
134
165
195
226
256
287
318
346
28
13
43
74
104
135
166
196
227
257
288
319
347
29
14
44
75
105
136
167
197
228
258
289
348
30
15
45
76
106
137
168
198
229
259
290
349
31
46
107
138
199
260
291
350
Chapter 4 Underpayment Penalty for 2002
Page 39

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