Instructions For Form Cf-2210, Underpayment Of Estimated Tax - 2004 Page 4
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42004 INSTRUCTIONS FOR FORM CF-2210, UNDERPAYMENT OF ESTIMATED TAX
53 x 0.0003366 (second payment) and $200 x 61days x
(May), 2 (May and June) and 2 (May and June)
0.0003366 (remaining underpayment balance).
respectively.
Line 36
Then figure the interest for Rate Period 2 (lines 27 and
Figure line 36 in the same manner as the interest was
29) on the remaining $200 balance.
calculated, except use the new penalty rate of 1% per
Rate Period 2
month listed on line 35.
You will have a penalty
If an underpayment balance remains after applying the
computation for each payment listed in Tables 1, 2 and 3
payments in Table 1, figure the interest attributable to
and for the remaining balance of the underpayment at
that balance on lines 27 and 29. Generally, use the
4/30/2005.
same steps as explained under the instructions for Rate
Period 1. But use the dates and interest rate shown on
Example 8. Use the same facts as in Example 6. Line
lines 27 and 28 and use only the payments listed in
36 will each show three entries in column (a), $3.00
Table 2.
($300 x 1 month x .01), $6.00 ($300 x 2 months x .01)
and $4.00 ($200 x 2 months x 1) respectively.
Line 27
Enter on line 27, column (a), the number of days from
SCHEDULE
A1
–
Annualized
Income
6/30/2004 to the date of the first payment listed in Table
Installment Method
2. If no payments are listed in table 2, enter “184.”
Line 29
If your income varied during the year because, for
Figure line 29 in the same manner as explained for line
example, you operated your own business on a
26, except use the new interest rate listed in Line 28.
seasonal basis, you may be able to lower or eliminate
the amount of one or more required installments by
Rate Period 3
using the annualized income installment method. Use
If an underpayment balance remains after applying any
Schedule A1 to figure the required installments to enter
payments in Tables 1 and 2, figure the interest
on Form CF-2210, Line 13.
attributable to that balance on lines 30 and 32.
Generally, use the same steps as explained under the
If you use Schedule A1 for any payment due date, you
instructions for Rate Period 1. But use the dates and
must use it for all payment due dates. When figuring the
interest rate shown on lines 30 and 31 and use only the
amount of each required installment, Schedule A1
payments listed in Table 3
automatically selects the smaller of the annualized
income installment or the regular installment.
For
Line 30
installment periods two, three or four, the regular
Enter on line 30, column (a), the number of days from
installment is increased by the amount saved from using
12/31/2004 to the date of the first payment listed in
the annualized income installment method in figuring any
Table 3. If no payments are listed in table 3, enter “89.”
earlier installments.
Line 32
To use the annualized income installment method, you
Figure line 32 in the same manner as explained for line
must do all three of the following.
26, except use the new daily interest rate listed on line
1. Enter the amount from Schedule A1, line 20, in each
31.
column of Form CF-2210, line 13.
2. Check box 1b in Part I.
Section C – Figure the penalty
3. Attach both Form CF-2210 and Schedule A1 to your
return.
Chart of Total Months
Rate Period
(a)
(b)
(c)
(d)
Annualized Income Installments
1 (Line 34)
12
10
7
3
Line 1
Figure your total income for the period minus any
The first day of a month that there is an underpayment
allowable deductions for the period.
counts as the first month for penalty purposes.
An
additional month is added to the total of the months on
All other lines
the first day of the next month and each month thereafter
Follow the instructions on each separate line.
that the underpayment remains unpaid.
Line 34
Enter on line 34, column (a), the number of months from
4/30/2004 to the date of the first payment listed in Tables
1, 2 or 3. If no payments are made enter “12.”
Example 7. Use the same facts as in Example 6. Lines
34 will show three entries in column (a), and the total
number of months for each penalty computation is 1
Page 4 of 4
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