taxmap/pubs/p505024.htm#en_us_publink10007536You may use the regular method in Part IV of Form 2210 to figure your penalty for underpayment of estimated tax if you paid one or more estimated tax payments earlier than the due date.
You must use the regular method in Part IV of Form 2210 to figure your penalty for underpayment of estimated tax if any of the following apply to you.
 You paid one or more estimated tax payments on a date after the due date.
 You paid at least one, but less than four, installments of estimated tax.
 You paid estimated tax payments in un
equal amounts.  You use the annualized income installment method to figure your underpayment for each payment period.
 You use your actual withholding during each payment period to figure your payments.
If you use the regular method, figure your underpayment for each payment period in Section A, then figure your penalty for each payment period in Section B.
taxmap/pubs/p505024.htm#en_us_publink10007537Figure your underpayment of estimated tax for each payment period in Section A following the linebyline instructions. Complete lines 20 through 26 of the first column before going to line 20 of the next column.
taxmap/pubs/p505024.htm#en_us_publink10007538Your required payment for each payment period (line 18) is usually onefourth of your required annual payment (Part I, line 9). However, if you are using the annualized income installment method (described beginning on this page), first complete Schedule AI (Form 2210), and then enter the amounts from line 25 of that schedule on line 18 of Form 2210, Part IV.
taxmap/pubs/p505024.htm#en_us_publink10007539On line 19, enter in each column the total of:
 Your estimated tax paid after the due date for the previous column and by the due date shown at the top of the column, and
 Onefourth of your withholding.
For special rules for figuring your payments, see the Instructions for Form 2210.
If you file Form 1040, your withholding is the amount on line 62, plus any excess social security or tier 1 RRTA tax withholding on line 65. If you file Form 1040A, your withholding is the amount on line 38 plus any excess social security or tier 1 RRTA tax withholding included in line 43.
taxmap/pubs/p505024.htm#en_us_publink10007540Instead of using onefourth of your withholding for each quarter, you can choose to use the amounts actually withheld by each due date. You can make this choice separately for the tax withheld from your wages and for all other withholding. This includes any excess social security and tier 1 RRTA tax withheld.
Using your actual withholding may result in a smaller penalty if most of your withholding occurred early in the year.
If you use your actual withholding, you must check box D in Form 2210, Part II. Then complete Form 2210 and file it with your return.
taxmap/pubs/p505024.htm#en_us_publink10007541If you received your income evenly throughout the year, use the regular installment method to figure your estimated tax underpayment for the year.
taxmap/pubs/p505024.htm#en_us_publink10007542Ben Brown's 2008 total tax (Form 1040, line 61) is $7,031, the total of his $4,685 income tax and $2,346 selfemployment tax. His 2007 AGI was less than $150,000. He does not owe any other taxes or claim any credits other than for withholding. His 2007 tax was $6,116. See Figure 4B on page 64 to see Ben's completed Form 2210, Part I.
Ben's employer withheld $3,228 income tax during 2008. Ben paid no estimated tax for either the first or second period, but he paid $1,000 each on August 29, 2008, and January 12, 2009, for the third and fourth periods. Because the total of his withholding and estimated tax payments, $5,228 ($3,228 + $1,000 + $1,000), was less than both 90% of his 2008 tax (90% x $7,031 = $6,328), and 100% of his 2007 tax ($6,116), Ben knows he owes a penalty for underpayment of estimated tax. He decides to figure the penalty on Form 2210 and pay it with his $1,803 tax balance ($7,031 − $5,228) when he files his tax return on April 15, 2009.
Ben's required annual payment (Part I, line 9) is $6,116. Because his income and withholding were distributed evenly throughout the year, Ben enters onefourth of his required annual payment, $1,529, in each column of line 18 (see Figure 4B (Continued) on page 65). On line 19, he enters onefourth of his withholding, $807, in the first two columns and $1,807 ($807 plus $1,000 estimated tax payment) in the last two columns.
Ben has an underpayment (line 25) for each payment period even though his withholding and estimated tax payments for the third and fourth periods were more than his required installments (line 18). This is because the estimated tax payments made in the third and fourth periods are first applied to underpayments for the earlier periods.
taxmap/pubs/p505024.htm#en_us_publink10007543If you did not receive your income evenly throughout the year (for example, your income from a repair shop you operated was much larger in the summer than it was during the rest of the year), you may be able to lower or eliminate your penalty by figuring your underpayment using the annualized income installment method. Under this method, your required installment (line 18) for one or more payment periods may be less than onefourth of your required annual payment.
To figure your underpayment using this method, complete Schedule AI of Form 2210 (see Figure 4C on page 66 for an example). The schedule annualizes your tax at the end of each payment period based on your income, deductions, and other items relating to events that occurred from the beginning of the tax year through the end of the period.
If you use the annualized income installment method, you must check box C in Part II of Form 2210. You also must attach Form 2210 and Schedule AI to your return.
 If you use Schedule AI for any payment due date, you must use it for all payment due dates. 
taxmap/pubs/p505024.htm#en_us_publink10007545Follow the Form 2210 instructions to complete Schedule AI. For each period shown on Schedule AI, figure your income and deductions based on your method of accounting. If you use the cash method of accounting (used by most people), include all income actually or constructively received during the period and all deductions actually paid during the period.
Note.Each period includes amounts from the previous period(s).
 Period (a) includes items for January 1 through March 31.
 Period (b) includes items for January 1 through May 31.
 Period (c) includes items for January 1 through August 31.
 Period (d) includes items for the entire year.
taxmap/pubs/p505024.htm#en_us_publink10007547Laura Maple files as head of household with two exemptions. Her 2008 total tax (Form 1040, line 61) is $3,937, the total of her $1,591 income tax and $2,346 selfemployment tax. Laura also has an earned income credit (EIC) of $571, so the amount she owes is $3,366 ($3,937 less the $571 EIC). She does not owe any other taxes. Her 2007 AGI was less than $150,000. Her 2007 tax was $3,530. Her required annual payment on Form 2210, Part I, line 9, is $3,029 (the smaller of her $3,530 tax for 2007 or 90% of her $3,366 tax after credits for 2008).
Laura's employer withheld $1,488 income tax during 2008. Laura paid no estimated tax for either the first or second period, but she paid $100 on August 15, 2008, and $500 on December 3, 2008, for the third and fourth periods.
Laura did not receive her income evenly throughout the year. Therefore, she decides to figure her required installment for each period (Part IV, line 18) using the annualized income installment method. To use this method, Laura completes Schedule AI before starting Part IV. Figure 4C, beginning on page 66, shows Laura's filledin Schedule AI and Part IV.
Laura's wages during 2008 were $15,000 ($1,250 a month). Her net earnings from a business she started during the year were $16,600, received as follows.
April through May  $3,600 
June through August  5,000 
September through December  8,000 
Selfemployment tax and deduction. Before Laura can figure her AGI for each period (Schedule AI, line 1), she must figure her deduction for selfemployment tax for each period. To do this, she first completes Schedule AI, Part II, (see Figure 4C on page 66).
Laura had no selfemployment income for the first period, so she leaves the lines in that column blank. Her selfemployment income was $3,600 for the second period, $8,600 ($3,600 + $5,000) for the third period, and $16,600 ($8,600 + $8,000) for the fourth period. She multiplies each amount by 92.35% (.9235) to find the amounts to enter on line 26. She then fills out the rest of Part II. See Figure 4C on page 66.
Laura figures the deduction for onehalf of the selfemployment tax by dividing the amounts on line 34 by the annualization amounts for each period. The annualization amounts are:
 8 for the first period,
 4.8 for the second period,
 3 for the third period, and
 2 for the fourth period.
taxmap/pubs/p505024.htm#en_us_publink10007548Laura figures the amounts to enter on Schedule AI, line 1, as follows.
Column (a)—1/1/08 to 3/31/08:  
$1,250 per month × 3 months  $ 3,750 
Column (b)—1/1/08 to 5/31/08: $1,250 per month × 5 months  $6,250 
Plus:  Selfemployment income through 5/31/08  3,600 
Less:  Selfemployment tax deduction ($1,221 ÷ 4.8)  (254) 
   $9,596 
Column (c)—1/1/08 to 8/31/08: $1,250 per month × 8 months  $10,000 
Plus:  Selfemployment income through 8/31/08  8,600 
Less:  Selfemployment tax deduction ($1,822 ÷ 3)  (607) 
   $17,993 
Column (d)—1/1/08 to 12/31/08:  
$1,250 per month × 12 months  $15,000 
Plus:  Selfemployment income through 12/31/08  16,600 
Less:  Selfemployment tax deduction ($2,346 ÷ 2)  (1,173) 
   $30,427 
taxmap/pubs/p505024.htm#en_us_publink10007549 Laura had $9,000 in itemized deductions for 2008—$200 per month withheld for state and local taxes, and $550 per month for mortgage interest—for a total of $750 each month. She divided them by period in the following manner.
 1st period: $2,250 ($750 × 3 months).
 2nd period: $3,750 ($750 × 5 months).
 3rd period: $6,000 ($750 × 8 months).
 4th period: $9,000 ($750 × 12 months).
She enters each amount on line 4 in the proper column for that period.
Now that Laura has figured her entries for lines 1 and 4, she can complete the rest of Schedule AI to determine the amounts to put on Form 2210, Part IV, line 18. Laura figures her EIC on Schedule AI, line 16, for each period using her annualized earned income for that period. Figure 4C on page 66 shows her completed Parts I and II of Schedule AI.
taxmap/pubs/p505024.htm#en_us_publink10007550Laura then figures her underpayment in Part IV, Section A (see Figure 4C (Continued) on page 67). She finds that she overpaid her estimated tax for the first three payment periods, but underpaid her estimated tax for the last payment period.
taxmap/pubs/p505024.htm#en_us_publink10007551Figure the amount of your penalty in Section B following the instructions. The penalty is imposed on each underpayment shown in Section A, line 25, for the number of days that it remained unpaid. (You may find it helpful to show the date of payment beside each amount on line 25.)
For 2008, there are four rate periods to figure the penalty. Use Rate Period 1 (lines 27 and 28) to apply the 6% rate in effect from April 16, 2008, through June 30, 2008. Use Rate Period 2 (lines 29 and 30) to apply the 5% rate in effect from July 1, 2008, through September 30, 2008. Use Rate Period 3 (lines 31 and 32) to apply the 6% rate in effect from October 1, 2008, through December 31, 2008. Use Rate Period 4 (lines 33 and 34) to apply the 5% rate in effect from January 1, 2009, through April 15, 2009.
taxmap/pubs/p505024.htm#en_us_publink10007552Table 41 (see page 61) provides a simple method for counting the number of days between payment dates or between a due date and a payment date.
 Find the number for the date the payment was due by going across to the column of the month the payment was due and moving down the column to the due date.
 In the same manner, find the number for the date the payment was made.
 Subtract the due date "number" from the payment date "number."
For example, if a payment was due on June 15 (61), but was not paid until November 4 (203), the payment was 142 (203 − 61) days late.
taxmap/pubs/p505024.htm#w15008e28 Table 41. Calendar To Determine the Number of Days a Payment Is Late Instructions. Use this table with Form 2210 if you are completing Part IV, Section B. First, find the number for the payment due date by going across to the column of the month the payment was due and moving down the column to the due date. Then, in the same manner, find the number for the date the payment was made. Finally, subtract the due date number from the payment 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 2008  Day of  2008  2008  2008  2008  2008  2008  2008  2008  2008  2009  2009  2009  2009  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  

taxmap/pubs/p505024.htm#en_us_publink10007553Before completing Section B, make a list of the payments you made after the due date (or the last day payments could be made on time) for the earliest payment period an underpayment occurred. For example, if you had an underpayment for the first payment period, list your payments after April 15, 2008. You can use the table in the Form 2210 instructions to make your list. Follow those instructions for listing income tax withheld and payments made with your return. Use the list to determine when each underpayment was paid.
taxmap/pubs/p505024.htm#en_us_publink10007554If an underpayment was paid in two or more parts on different dates, you must figure the penalty separately for each part. You may find it helpful to show the underpayment on Section A, line 25, broken down into the amounts paid on different dates. See lines 29 and 30 of Figure 4B (Continued) on page 65 for an example of this.
taxmap/pubs/p505024.htm#en_us_publink10007555For each underpayment on line 25, columns (a)–(d), figure the penalty by:
 Determining the date(s) an underpayment was paid,
 Determining the number of days between the due date and the payment date(s), and
 Multiplying the amount of underpayment by the number of days unpaid and the appropriate penalty rate.
If an underpayment remained unpaid for more than one rate period, the penalty on that underpayment will be figured using more than one rate.
Use lines 27, 29, 31, and 33 to figure the number of days the underpayment remained unpaid. Use lines 28, 30, 32, and 34 to figure the actual penalty amount by applying the rate against the underpayment for the number of days it remained unpaid.
If an underpayment remained unpaid for the entire period, use Table 42 to determine the number of days to enter for each period.
Table 42. Chart of Total Days 
 Column (a)  Column (b)  Column (c)  Column (d) 
line 27  76  15  —  — 
line 29  92  92  15  — 
line 31  92  92  92  — 
line 33  105  105  105  90 
To figure the total penalty, add the amounts on lines 28, 30, 32, and 34 in all columns. Enter the total on line 35.
taxmap/pubs/p505024.htm#en_us_publink10007556In the previous example for Ben Brown (see Regular Installment Method on page 57), he determined that he had an underpayment for all four payment periods. See Ben's completed Section A in Figure 4B (Continued) on page 65.
Ben's 2008 tax is $7,031. His minimum required payment for each period is $1,529 ($6,116 ÷ 4). His $3,228 withholding is considered paid in four equal installments of $807, one on each payment due date. Therefore, he must make estimated tax payments of $722 ($1,529 − $807) each period. However, Ben made only two estimated tax payments—$1,000 on August 29, 2008, and $1,000 on January 12, 2009. He plans to file his return and pay his balance due on April 15, 2009. He is considered to have made the following payments for tax year 2008.
April 15, 2008^{1}  $ 807 
June 15, 2008^{1}  807 
August 29, 2008^{2}  1,000 
September 15, 2008^{1}  807 
January 12, 2009^{2}  1,000 
January 15, 2009^{1}  807 
^{1} Onefourth of withholding 
^{2} Estimated tax payment 
taxmap/pubs/p505024.htm#en_us_publink10007557Ben's $722 underpayment for the first payment period was paid by applying $722 of his $807 payment on June 15, 2008. The $722 remained unpaid 61 days (April 16 through June 15, 2008). Ben enters "61" on line 27 and figures this part of the penalty on line 28 ($722 × (61 ÷ 366) × .06 = $7.22). See his completed Section B in Figure 4B (Continued) on page 65.
taxmap/pubs/p505024.htm#en_us_publink10007558Ben figures his second period underpayment as follows.
 Of the $807 he paid for the second period, $722 is applied to the underpayment remaining from the first period.
 That leaves $85 ($807 – $722) to apply to his second period required installment of $1,529.
 The result, $1,444 ($1,529 − $85), is Ben's underpayment for the second period.
The $1,444 underpayment is paid in two parts by applying the $1,000 paid on August 29 and $444 of his $807 September 15 payment. To help him figure his penalty, Ben shows the date of each payment on line 25.
All of the underpayment remained unpaid for 15 days (June 16 through June 30). $1,000 of the underpayment remained unpaid for 60 additional days (July 1 through August 29) and $444 remained unpaid for 77 additional days (July 1 through September 15). Ben enters "15" on line 27, column (b), and "60" and "77" on line 29, column (b). He shows the result of all penalty computations on lines 28 and 30 (see Figure 4B (Continued) on page 65).
taxmap/pubs/p505024.htm#en_us_publink10007559Ben figures his third period underpayment as follows.
 Of the $1,807 he paid for the third period, $1,444 is applied to the underpayment remaining from the second period.
 That leaves $363 ($1,807 − $1,444) to apply to his third period required installment of $1,529.
 The result, $1,166 ($1,529 − $363), is Ben's underpayment for the third period.
The $1,166 underpayment is paid in two parts by applying his $1,000 payment on January 12, 2009, and $166 of his $807 payment on January 15. On line 25, Ben shows the date of each payment.
For Rate Period 2, the entire underpayment ($1,166) remained unpaid 15 days (September 16 through September 30). Ben enters "15" on line 29. He shows the result of the penalty computation on line 30 (see Figure 4B (Continued) on page 65).
For Rate Period 3, the entire underpayment ($1,166) remained unpaid 92 days (October 1 through December 31). Ben enters "92" on line 31. He shows the result of the penalty computation on line 32 (see Figure 4B (Continued) on page 65).
For Rate Period 4, $1,000 of the underpayment remained unpaid for 12 days (January 1 through January 12) and $166 remained unpaid for 15 days (January 1 through January 15). Ben enters "12" and "15" on line 33. He shows the result of both penalty computations on line 34 (see Figure 4B (Continued) on page 65).
taxmap/pubs/p505024.htm#en_us_publink10007560Ben figures his fourth period underpayment as follows.
 Of the $1,807 he paid for the fourth period, $1,166 is applied to the underpayment remaining from the third period.
 That leaves $641 ($1,807 − $1,166) to apply to his fourth period required installment of $1,529.
 The result, $888 ($1,529 − $641) is Ben's underpayment for the fourth period.
The $888 underpayment was paid April 15, 2009, with his tax return. The $888 remained unpaid 90 days (January 16 through April 15, 2009). Ben enters that number on line 33 and shows the result of the penalty computation on line 34 (see Figure 4B (Continued) on page 65).
taxmap/pubs/p505024.htm#en_us_publink10007561Ben's total penalty for 2008 on line 35 is $56.55, the total of all amounts on lines 28, 30, 32, and 34 in all columns. Ben enters that amount on line 76 of his Form 1040. He also adds $57 to his $1,803 tax balance and enters the $1,860 total on line 75. He files his return on April 15 and includes a check for $1,860. He keeps his completed Form 2210 for his records.
taxmap/pubs/p505024.htm#en_us_publink10007562In the previous example for Laura Maple (under Completing Schedule AI on page 58), her first underpayment was for the last payment period. See Laura's completed Section A in Figure 4C (Continued) on page 67.
This example illustrates completion of Part IV, Section B, of Laura's Form 2210 under the annualized income installment method.
Laura made the following payments for tax year 2008.
April 15, 2008^{1}  $ 372 
June 15, 2008^{1}  372 
August 15, 2008^{2}  100 
September 15, 2008^{1}  372 
December 3, 2008^{2}  500 
January 15, 2009^{1}  372 
^{1} Onefourth of withholding 
^{2} Estimated tax payment 
taxmap/pubs/p505024.htm#en_us_publink10007564Laura's $940 underpayment for the fourth payment period was paid on April 15, 2009, with her tax return. The entire amount remained unpaid 90 days (January 16 through April 15, 2009). Laura enters that number on line 33. She shows the result of the penalty computation on line 34 (see Figure 4C (Continued) on page 67).
taxmap/pubs/p505024.htm#en_us_publink10007565Laura's total penalty for 2008 on line 35 is $11.59, the amount on line 34. Laura enters that amount on line 76 of her Form 1040. She also adds $12 to her $1,278 tax balance and enters the $1,290 total on line 75. She files her return on April 15 and includes a check for $1,290. Because she used the annualized income installment method, she must attach Form 2210, including Schedule AI, to her return and check box C in Part II.