Enter on line 18, columns (a)–(d), the amount of your required installment for the due date shown in each column heading. For most taxpayers, this is ¼ of the required annual payment shown on line 9 of Part I. However, it may be to your benefit to figure your required installments by using the annualized income installment method. See the Schedule AI instructions beginning on page 4.

Enter the estimated tax payments you made plus any withheld Federal income tax and excess social security and railroad retirement tax, for the 2003 tax year. If you are a household employer and made advance EIC payments, include those payments as estimated tax payments as of the date you paid the wages to your employees.

In column (a), enter the tax payments you made by April 15, 2003; in column (b), enter payments you made after April 15 through June 15, 2003; in column (c), enter payments you made after June 15 through September 15, 2003; and in column (d), enter payments you made after September 15, 2003, through January 15, 2004.

When figuring your payment dates and the amounts to enter on line 19 of each column, apply the following rules.

If line 25 is zero for all payment periods, you do not owe a penalty. But if you checked box C or D in Part II, you must file Form 2210 with your return. If you checked box E, you must file page 1 of Form 2210 with your return.

In certain circumstances, the IRS will waive all or part of the penalty if you have an underpayment on line 25. See Waiver of Penalty on page 1.

List your payments after 4/15/03.   Before figuring your penalty in Section B, it will be helpful to list the payments you made after April 15, 2003, as shown in the tables below.

  In each table, list only the payments made during the dates shown in the table heading. Also, apply the following rules.

Total days per rate period.   If an underpayment remained unpaid for an entire rate period, use the chart below to determine the number of days to enter in each column. The chart is organized in the same format as Form 2210, Part IV, Section B.

  For example, if you have an underpayment on line 25, column (a), but show no payments in Table 1, you would enter “168” on line 27, column (a).

  The following line-by-line instructions apply only to column (a) of Section B. If there is an underpayment shown in column (b), (c), or (d) on line 25, complete lines 27 through 32 for those columns in a similar manner.

Enter on line 27, column (a), the number of days from 4/15/03 to the date of the first payment listed in Table 1. If no payments are listed, enter “168.”

Make the computation requested on line 28 and enter the result. Note that the computation calls for the “underpayment on line 25.” The amount you use as the “underpayment” depends on whether or not a payment is listed in Table 1.

Enter on line 29, column (a), the number of days from 9/30/03 to the date of the first payment listed in Table 2. If no payments are listed in Table 2, enter “92.”

Figure line 30 in the same manner as explained for line 28, except use 4% instead of 5%.

Enter on line 31, column (a), the number of days from 12/31/03 to the date of the first payment listed in Table 3. If no payments are listed in Table 3, enter “106.”

Figure line 32 in the same manner as explained for line 28, except use 4% instead of 5% and a denominator of 366 instead of 365.

Figure your total income for the period minus your adjustments to income for the period. Include your share of partnership or S corporation income or loss items for the period.

If you are self-employed, be sure to take into account the deduction for one-half of your self-employment tax. To figure this amount for each period, complete Part II of Schedule AI and divide the amount in each column on line 34 by 8, 4.8, 3, and 2, respectively.

Estates and trusts, do not use the amounts shown in columns (a)–(d). Instead, use 6, 3, 1.71429, and 1.09091, respectively, as the annualization amounts.

Multiply line 4 by line 5 and enter the result on line 6. But if line 3 is more than $139,500 ($69,750 if married filing separately), use the following worksheet to figure the amount to enter on line 6.

Multiply $3,050 by your total exemptions. But if line 3 is more than the amount shown for your filing status in the table below, use the following worksheet to figure the amount to enter on line 10.

To compute the tax, use the Tax Table, Tax Rate Schedules, Qualified Dividends and Capital Gain Tax Worksheet, Schedule D or J, or Form 8615.

Enter all of the other taxes you owed because of events that occurred during the months shown in the column headings. Include the same taxes used to figure line 2 of Form 2210 (except self-employment tax), the tax from Form 4972, Tax on Lump-Sum Distributions, and any alternative minimum tax (AMT). Individuals, use Form 6251, Alternative Minimum Tax—Individuals, to figure AMT; estates and trusts, use Schedule I of Form 1041, U.S. Income Tax Return for Estates and Trusts. Figure alternative minimum taxable income based on your income and deductions during the period shown in the column headings. Multiply this amount by the annualization amounts shown on line 2 of Schedule AI before subtracting the AMT exemption.

Enter the credits you are entitled to because of events that occurred during the months shown in the column headings. Do not annualize any credit. However, when figuring your credits, you must annualize any item of income or deduction used to figure the credit. For details, see Rev. Rul. 79-179, 1979-1 C.B. 436.

To figure your net earnings from self-employment on line 26, multiply your net profit from all trades or businesses for each period by 92.35%. If you completed the 2003 Annualized Estimated Tax Worksheet on pages 25 and 26 of Pub. 505 (Rev. December 2003), carry the amounts from line 26 of that worksheet to line 26 of Schedule AI.