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Subject Author Date
Form 2210 & Est Tax Payments wangold386@yahoo.com 05-12-2008
Posted by removeps-groups@yahoo.com on May 14, 2008, 12:35 am
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 wrote:
> removeps-gro...@yahoo.com wrote:

> > Form2210is for delayed payments. See the long method of form2210
> > (part 4), lines 27 to 30, which ask for the number of days the payment
> > was late. So if you owe $1000 for April 15, but paid $1200 on May 15,
> > then the extra $200 is a free loan for the government on which you
> > don't receive interest, and you have penalty/interest on $1000 from
> > April 15 to May 15 which is 30 days, and at 6% a year we're looking at
> > 0.06/12*1000=$5.
>
> I see your logic, but the form doesn't seem to apply to an overpayment
> situation.
>
> I filled out the whole form, but when I got to the penalty section, it asks
> for the amount UNDERpaid, and since I OVERpaid, there was no place for me
> to put the amount. That's why I'm confused.

The instructions for line 19 say "In column (a), enter the tax
payments you made by April 15, 2007", and it will be zero in your
case.

Say you owe $1000 each quarter.
Then all columns of line 18 ("Required Installments") will be $1000.
Say you paid your April 15 installment on May 15 but overpaid by $200,
but will be on time for June 15 at $1000.
So line 19 ("Tax withheld by due date") column (a) will be 0, column
(b) will be $2200.
So line 25 ("Underpayment) column (a) will be $1000, column (b) will
be 0.
And line 26 ("Overpayment") column (a) will be $0, column (b) will be
$200.
Line 27, column (a) will be 30 days.
Line 28, column (a) will be 1000*30/465*0.08 =
5.1612903225806451612903225806452
Line 29, column (a) will be 0.
Line 30, column (a) will be 0.

http://www.irs.gov/pub/irs-pdf/f2210.pdf
http://www.irs.gov/pub/irs-pdf/i2210.pdf

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<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
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Posted by scott s. on May 14, 2008, 1:30 am
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> wrote:
>> removeps-gro...@yahoo.com wrote:
>> I see your logic, but the form doesn't seem to apply to an
>> overpayment situation.
>>
>> I filled out the whole form, but when I got to the penalty section,
>> it asks for the amount UNDERpaid, and since I OVERpaid, there was
>> no place for me to put the amount. That's why I'm confused.
>
> The instructions for line 19 say "In column (a), enter the tax
> payments you made by April 15, 2007", and it will be zero in your
> case.

I use an estimated tax excel worksheet sold on the internet. The
benefit is in looking at the various ways to reduce the required
quarterly estimate. In my case the AI method often works best,
but sometimes I switch to 110% prior year, depending on the actual
numbers. Once you are late on a payment, the only way out is if
you have witholding, and increase it, since you have the option of
spreading your witholding equally along the year vice when actually
witheld.

I agree that when you fill out 2210, you can see the effect of
paying a few days late when you use the long method. Consumer
tax software I have used also figures it correctly.

scott s.
..

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by wangold386@yahoo.com on May 15, 2008, 4:16 am
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removeps-groups@yahoo.com wrote:

> The instructions for line 19 say "In column (a), enter the tax
> payments you made by April 15, 2007", and it will be zero in your
> case.

Okay, I see where my confusion was. I had read it as "enter the tax
payments you made FOR April 15" instead of "BY April 15." That changes
things. I'll have to fill out the form again and see how it works out.

Thank you very much for your help.

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

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