Publication 505

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## Regular Method for Figuring the Penalty (Part IV)(p56) |

You can 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.

Under the regular method, figure your underpayment for each payment period in Section A, then figure your penalty using the Penalty Worksheet in the Instructions for Form 2210. Enter the results on line 27 of Section
B.

taxmap/pubs/p505-023.htm#en_us_publink1000194856## Figuring Your Underpayment |

Figure your underpayment of estimated tax for each payment period in Section A following the line-by-line instructions in the instructions for Form 2210. Complete lines 20 through 26 of the first column before going to line 20 of the next
column.

taxmap/pubs/p505-023.htm#en_us_publink1000194857## Required installments—line 18.(p56) |

Your required payment for each payment period (line 18) is usually one-fourth of your required annual payment (Part I, line 9). This method—the regular method—is the one to use if you received your income evenly throughout the year.

However, if you did not receive your income evenly throughout the year, you may be able to lower or eliminate your penalty by figuring your underpayment using the annualized income installment method. First complete Schedule AI (Form 2210), then enter the amounts from line 25 of that schedule on line 18 of Form 2210, Part IV. See
Annualized Income Installment Method (Schedule AI), later.

taxmap/pubs/p505-023.htm#en_us_publink1000194859## Payments made—line 19.(p56) |

Enter in each column the total of:
For special rules for figuring your payments, see Form 2210 instructions for line
19.

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 69. If you file Form 1040A, your withholding is the amount on line 36 plus any excess social security or tier 1 RRTA tax withholding included in line
41.

taxmap/pubs/p505-023.htm#en_us_publink1000194860Actual withholding method.(p56) |

Instead of using one-fourth 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 using the regular method (Part IV) and file it with your
return.

taxmap/pubs/p505-023.htm#en_us_publink1000194861## Worksheet for Form 2210, Part IV, Section B—Figuring Your Penalty(p57) |

Figure the amount of your penalty for Section B using the Penalty Worksheet in the Form 2210 instructions. The penalty is imposed on each underpayment shown in Section A, line 25, for the number of days that it remained
unpaid.

For 2012, there are four rate periods—April 16 through June 30, July 1 through September 30, October 1 through December 31, and January 1, 2013 through April 15, 2013. A 3% rate applies to all four
periods.

taxmap/pubs/p505-023.htm#en_us_publink1000194862## Payments.(p57) |

Before completing the Penalty Worksheet, it may be helpful to make a list of the payments you made and income tax withheld 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, 2012. 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.

If you mail your estimated tax payments, use the date of the U.S. postmark as the date of
payment.

taxmap/pubs/p505-023.htm#en_us_publink1000194863## Line 1b.(p57) |

Apply the payments listed to underpayment balance in the first column until it is fully paid. Apply payments in the order
made.

taxmap/pubs/p505-023.htm#en_us_publink1000194864## Figuring the penalty.(p57) |

If an underpayment was paid in two or more payments on different dates, you must figure the penalty separately for each payment. On line 3 of the Penalty Worksheet enter the number of days between the due date (line 2) and the date of each payment on line 1b. On line 4 figure the penalty for the amount of each payment applied on line 1b or the amount remaining unpaid. If no payments are applied, figure the penalty on the amount on line
1a.

taxmap/pubs/p505-023.htm#en_us_publink1000194865Aid for counting days.(p57) |

Table 4-1
provides a simple method for counting the number of days between a due date and
a payment date.

For example, if a payment was due on June 15 (61), but was not paid until September 1 (139), the payment was 78 (139 – 61) days
late.

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