Oregon 10 Template

Oregon 10 Template

The Oregon Form 10, formally documented as for 2006, is an essential guide for taxpayers needing to assess their situation regarding underpayment of estimated tax. It serves to clarify when interest on underpayments or late payments is applicable, providing a structured way to determine any owed interest based on the taxpayer's 2006 estimated tax underpayment. Detailed instructions including various methods and exceptions are outlined to assist in accurate completion and submission, ensuring compliance with Oregon tax laws.

Prepare Form Here

In the labyrinth of tax obligations that sway with the seasons, the Oregon Form 10 emerges as a beacon for taxpayers grappling with the complexities of underpayment of estimated tax. Erected on the framework of Oregon law, this form navigates through the murky waters of interest charged on underpayments or late payments, setting a clear course for taxpayers who find themselves at sea. With its roots planted in the soil of the 2006 tax year, the form and accompanying instructions throw a lifeline to those adrift, guiding them to safe harbor through a series of determinants aimed at discovering whether interest on underpayment haunts their fiscal obligations. Thrusting taxpayers into a journey through estimated payments, safe harbor provisions, and a gauntlet of exceptions, the form stands as both a tool for compliance and a testament to the intricate dance between taxpayer obligations and state mandates. This odyssey, mapped out in detail on the form, encompasses scenarios from the straightforward path of timely payments to the stormier seas of underpayment due to unusual circumstances, with provisions for farmers, fishermen, retirees, the disabled, and S corporation shareholders seeking refuge from the tempest of interest charges. Thus, Oregon Form 10 not only demands precision in its completion but also a deep understanding of its implications on one's tax journey.

Preview - Oregon 10 Form

2006

OREGON

Form 10 and Instructions for

Underpayment of Estimated Tax

GENERAL INFORMATION

Oregon law requires some taxpayers to make estimated tax payments. Interest is charged on underpayments or late pay- ments. The table below will help you determine if you owe interest on underpayment of your 2006 estimated tax.

Do I Owe Interest on Underpayment of 2006 Estimated Tax Payments?

Start here

Do you owe $1,000 or more after withholding and refund-

If no

able tax credits on your 2006 Oregon income tax return?

 

 

 

 

 

 

 

 

 

If yes

 

 

 

 

 

 

 

Method 1—Estimated—2006 Tax

 

 

 

Did your timely withholding and/or timely estimated

If yes

 

 

 

tax payments equal at least 90 percent of your 2006

 

 

 

Oregon tax after all credits?

 

 

 

 

If no

 

 

 

 

 

 

 

Method 2—Safe Harbor—2005 Tax

 

 

 

Did your timely withholding and/or timely estimated

If yes

 

 

tax payments on your 2006 income taxes equal 100

 

 

percent of your 2005 net income tax, minus the working

 

 

 

family child care credit? (You canod if

 

 

 

you didnegon return.)

 

 

 

 

 

 

 

 

 

If no

 

 

 

 

 

 

 

 

 

 

 

Method 3—Annualized—2006 Tax

 

 

 

Did your timely withholding and/or timely estimated tax

If yes

 

 

 

 

payments equal at least 90 percent of your 2006 annualized

 

 

 

income tax?

 

 

 

 

 

 

 

 

 

 

 

 

If no

If yes

 

 

 

 

 

 

Do you qualify for one of the five exceptions listed on

 

 

 

 

page 2?

If no

 

 

 

 

 

You are not required to pay interest on underpayment of 2006 estimated tax and you are not required to file Form 10.

No interest is due on your underpayment of estimated tax. However, you must complete Parts A, B, and C of Form 10 and attach it to your Oregon income tax return. Check the box on your Oregon return to show Form 10 is attached.

No interest is due on your underpayment of estimated tax. However, you must file Form 10 if you meet an exception. Write in the exception number you are claim- ing on Form 10, line 1, and on Form 40, box 51a; Form 40N, box 69a; or Form 40P, box 68a. Attach Form 10 to your Oregon income tax return. Check the box on your Oregon return to show Form 10 is attached.

You must complete Form 10 to figure the amount you underpaid and the amount of interest due. Attach Form 10 to your Oregon income tax return. Check the box on your Oregon return to show Form 10 is attached.

150-101-031 (Rev. 12-06)

INSTRUCTIONS

These instructions are for lines not fully explained on the form.

Line 1—Claiming an exception

Exception 1—Farmers and commercial fishermen.

If at least two-thirds (66.7 percent) of your 2005 or 2006 total gross income is from farming or fishing, you don

pay underpayment interest.

Gross income includes items such as wages, interest, and dividends. It also includes gross profit from rentals, royal- ties, businesses, farming, fishing, and the sale of property. When figuring gross profit, subtract only the cost of goods sold. When figuring gross profit on the sale of property, subtract only the adjusted basis or cost.

Farmers. Use the amounts on the following lines of both your 2005 and 2006 federal income tax returns to determine your gross income from farming:

Federal Schedule F, line 11;

Federal Schedule E, line 42;

Federal Form 4797, line 20. (Include only gains from sale of livestock held for drafting, breeding, dairy, or sporting purposes.)

Fishermen. Use the amounts on the following lines of both your 2005 and 2006 federal income tax returns to determine your gross income from fishing:

Federal Schedule C, line 5;

Federal Schedule C-EZ, line 1;

Federal Schedule E, line 42.

Exception 2—Prior year.

You meet this exception if all of the following are true:

Your net income tax for 2005 was -0- or you were not required to file a return for 2005.

You were a full-year Oregon resident in 2005.

Your tax year was a full 12 months.

Your 2005 net income tax is your Oregon income tax after tax credits, including refundable tax credits, but before with- holding, estimated tax payments, or payments made with an extension.

Note: If you were a nonresident or a part-year resident in 2005, you can, you may be

able to use the Safe Harbor Method to figure your required annual payment. See Part A instructions on this page.

Exception 3—Retired or disabled and have a reasonable cause for the underpayment.

You meet this exception if:

There was reasonable cause for underpaying your esti- mated tax, AND

You retired at age 62 or older during 2005 or 2006, or

You became disabled during 2005 or 2006.

Reasonable cause will be decided on a case-by-case basis. The extent of your effort to comply with the law will be considered. Attach a statement explaining the cause to be considered for the exception. Label the statement “Form 10 Attachment” at the top center of the page.

Exception 4—Underpayment due to unusual circumstances.

No interest is due if your underpayment is due to a casualty, disaster, or other unusual circumstance. Unemployment does not qualify as an unusual circumstance. Books and records that are destroyed by fire, flood, or other natural disaster may qualify as an unusual circumstance. Unusual circumstances will be determined on a case-by-case basis. The extent of your effort to comply with the law will be considered. Attach a statement explaining the cause to be considered for the exception. Label the statement “Form 10 Attachment” at the top center of the page.

Exception 5—S corporation shareholders.

Contact the Department of Revenue to see if you meet this exception. See page 8 for numbers to call.

PART A—Figure your required annual payment

Line 2. Fill in your 2006 net income tax amount from Form 40, line 41; Form 40N, line 59; or Form 40P, line 58.

Line 3. Fill in your total 2006 refundable tax credit amounts from Form 40, lines 44–46; Form 40N, lines 62–64; or Form 40P, lines 61–63.

Line 6. Fill in only your Oregon income tax withheld from income. Don’t include any estimated tax payments.

Line 8. Enter your 2005 tax after all credits, Form 40, line 42 minus line 45; or Form 40N or 40P, line 60 minus line 63. If your 2005 tax after credits is less than zero, enter -0-.

If you didneturn for 2005, or your 2005 return was

not timely filed (including extensions), or your 2005 tax year was less than 12 months, don’t complete line 8. Enter the amount from line 5 on line 9. Note: If you were a part-year resident or nonresident in 2005 and you have a tax year of 12 months, you may use the tax shown on your 2005 Form 40N or 40P, line 60 minus line 63.

PART B—Figure your required periodic payment

Line 11. Divide line 9 by four and enter the amount in each column. If you moved into or out of Oregon in 2006, use the column(s) that correspond to the dates you lived in Oregon. Divide the amount on line 9 by the number of periods you were a resident of Oregon. This is your required payment for the period.

OR

If you annualized your income using the Annualized Income Worksheet on the back of Form 10, enter the amounts from line 31 of the worksheet.

2

PART C—Figure your interest

Interest is calculated on the balance of tax due (running balance) between event dates. The required payments due on April 17, 2006, June 15, 2006, September 15, 2006, and January 16, 2007 increase your running balance. Withhold- ing and estimated payments decrease your running balance. Underpayment interest accrues until the balance is paid in full or April 16, 2007, whichever is earlier. Interest will con- tinue to accrue on any tax due after April 16, 2007 and will be computed separately.

Lines 19, 20, and 21. Enter the dates and amounts of any estimated payments you made from June 15, 2006 until September 14, 2006 in date order.

Lines 24, 25, and 26. Enter the dates and amounts of any estimated payments you made from September 15, 2006 until January 15, 2007 in date order.

Lines 30, 31, and 32. Enter the dates and amounts of any estimated payments you made from January 16, 2007 until April 16, 2007 in date order.

Date and amount columns

Lines 12, 17, 22, and 28. Enter your required payments from line 11 in the Amount column for each corresponding period. If the required payment is zero, enter -0-.

Lines 13, 18, 23, and 29. Fill in Oregon income tax withheld from your wages, pension, or any other income. Withholding is considered to be paid in equal amounts on the required payment dates (usually four), unless you prove otherwise. If you worked all year, divide your withholding by four and enter the figure in the Amount column for the four withhold- ing payment dates. If there was no withholding during the period, enter zero.

Lines 14, 15, and 16. Enter the dates and amounts of any estimated payments you made before June 15, 2006 in date order. All payments made on or before April 17, 2006 can be added together and entered on line 14.

Running balance column

Running balance is the amount of tax due at any given time during the year. Start on line 12 and work your way down. The required payments on lines 12, 17, 22, and 28 increase your running balance. Withholding and estimated payments on the other lines decrease your running balance. If there is no withholding payment for the period, your running bal- ance will be the same as shown on the required payment line. The rate change on line 27 has no effect on your running balance. Your running balance can be positive, negative, or zero.

Example 1: Catelyn has a required payment of $5,000 every period. Her total withholding is $14,000 for 2006 ($3,500 each period). Catelyn made estimated tax payments of $2,500 on May 18, 2006 and July 15, 2006 and $3,000 on August 15, 2006. Catelynunning balance as of September 15, 2006 is negative $3,500.

Example 1. Date, Amount, and Running Balance Columns

 

 

 

 

 

No. of

Monthly

No. of

Daily

Interest

 

Date

Event

Amount

Running Balance

Months

Rate

Days

Rate

Due

12.

4/17/06

Req. Pymt.

$5,000.00

$5,000.00

 

 

 

 

 

13.

4/17/06

Withholding

$3,500.00

$1,500.00

 

0.005833

 

0.000192

 

14.

5/18/06

Payment

$2,500.00

($1,000.00)

 

0.005833

 

0.000192

 

15.

 

Payment

 

 

 

0.005833

 

0.000192

 

16.

 

Payment

 

 

 

0.005833

 

0.000192

 

17.

6/15/06

Req. Pymt.

$5,000.00

$4,000.00

 

 

 

 

 

18.

6/15/06

Withholding

$3,500.00

$500.00

 

0.005833

 

0.000192

 

19.

7/15/06

Payment

$2,500.00

($2,000.00)

 

0.005833

 

0.000192

 

20.

8/15/06

Payment

$3,000.00

($5,000.00)

 

0.005833

 

0.000192

 

21.

 

Payment

 

 

 

0.005833

 

0.000192

 

22.

9/15/06

Req. Pymt.

$5,000.00

$0.00

 

 

 

 

 

23.

9/15/06

Withholding

$3,500.00

($3,500.00)

 

0.005833

 

0.000192

 

 

 

 

 

 

 

 

 

 

 

3

Months and days columns

Count the number of full months and days between the first event that creates a positive running balance and the next event that changes your running balance. You will not count the number of days between required payments and with- holding payments because they are on the same day. Enter the months and days in the same row as your first event. Continue entering the number of full months and days between events down the column until you reach the last event that affects your running balance. Count the number of full months and days between the last event in your column and April 16, 2007. Underpayment interest is not calculated past April 16, 2007, the due date of the return.

If the running balance is negative or zero, do not calculate the number of days between the day the running balance becomes negative or zero and the next event.

Example 2: Using the information on page 3, Catelyn does not calculate the number of days between her first required payment and first withholding payment. The department recognizes her required payment and withholding on the same day. There is one full month and one day between Catelyn

payment. Catelyn will enter “1” in the month column on line 13 and “1” in the days column on line 13.

Example 3: Using the information on page 3, Catelyn estimated tax payment on May 18, 2006 creates a negative running balance on line 14. Because she has met the required payments to date, she will not owe further underpayment interest this period. It is not necessary for her to calculate the number of days between her estimated tax payment and her required payment on June 15, 2006.

Interest column

To calculate your interest, multiply your positive running balance by the number of full months and the monthly rate. Add to this your positive running balance multiplied by the number of days and the daily rate. Do not calculate interest on a negative or zero running balance.

Example 4: On line 13, Catelyn has a running balance of $1,500 for one month and one day. The interest that accrues during this period totals $9.04 ([1,500 × 1 × 0.005833] + [1,500

×1 × 0.000192]). Catelyn later has a balance of $500 for 28 days. The interest that accrues during that period totals $2.69 (500 x 28 x 0.000192).

Line 34. Add the amounts in the interest column. Round to the nearest whole dollar and enter here and on Form 40, line 51; Form 40N, line 69; or Form 40P, line 68.

Examples 2, 3, and 4. Months, Days, and Interest Columns

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

No. of

Monthly

No. of

Daily

Interest

 

Date

Event

Amount

Running Balance

Months

Rate

Days

Rate

Due

12.

4/17/06

Req. Pymt.

$5,000.00

$5,000.00

 

 

 

 

 

13.

4/17/06

Withholding

$3,500.00

$1,500.00

1

0.005833

1

0.000192

9.04

14.

5/18/06

Payment

$2,500.00

($1,000.00)

0.005833

0.000192

 

15.

 

Payment

 

 

 

0.005833

 

0.000192

 

16.

 

Payment

 

 

 

0.005833

 

0.000192

 

17.

6/15/06

Req. Pymt.

$5,000.00

$4,000.00

 

 

 

 

 

18.

6/15/06

Withholding

$3,500.00

$500.00

0.005833

28

0.000192

2.69

19.

7/15/06

Payment

$2,500.00

($2,000.00)

0.005833

0.000192

 

20.

8/15/06

Payment

$3,000.00

($5,000.00)

0.005833

0.000192

 

21.

 

Payment

 

 

 

0.005833

 

0.000192

 

22.

9/15/06

Req. Pymt.

$5,000.00

$0.00

 

 

 

 

 

23.

9/15/06

Withholding

$3,500.00

($3,500.00)

0.005833

0.000192

 

 

 

 

 

 

 

 

 

 

 

 

Continued on page 7...

4

FORM

UNDERPAYMENT OF

2006

10

OREGON ESTIMATED TAX

File with your 2006 Oregon individual income tax return

For Office Use Only

Date Received

Name

Social Security Number

– –

EXCEPTION TO PAYING INTEREST

1.I am claiming an exception to the imposition of estimated payment interest because I qualified for relief under ORS 316.573 or 316.587. See instructions and write in the exception number

you are claiming here and on Form 40, box 51a; Form 40N, box 69a; or Form 40P, box 68a

1

Exception No._______

PART A—Figure your required annual payment

2.

2006 net income tax from Form 40, line 41; Form 40N, line 59; or Form 40P, line 58

......................................

 

2

 

.00

3.

2006 refundable tax credit amounts you claimed on Form 40, lines 44–46; Form 40N, lines 62–64;

 

 

 

 

or Form 40P, lines 61–63

 

3

 

.00

4.

Line 2 minus line 3

 

4

 

.00

5.

Multiply line 4 by 90% (0.90)

5

 

.00

 

 

6.

2006 Oregon income tax withheld from income

 

6

 

.00

7.

Line 4 minus line 6. If less than $1,000, stop here! You do not owe underpayment interest

7

 

.00

8.

Enter your 2005 tax after credits, including the working family child care credit (see instructions)

8

 

.00

9.

Required annual payment. Enter the smaller of line 5 or line 8

 

9

 

.00

Note: If line 6 is equal to or more than line 9, stop here! You do not owe underpayment interest. Attach this form to your return.

PART B—Figure your required periodic payment

10.

Payment period due date

10

11.

Divide the amount on line 9 by four and enter the amount

 

 

in each column, or if you use the Annualized Income

 

 

Worksheet on the back of this form, enter the amounts

 

 

from line 31 here (see instructions)

11

A

B

C

D

April 17, 2006

June 15, 2006

Sept. 15, 2006

Jan. 16, 2007

 

 

 

 

 

 

 

 

PART C — Figure your interest (See instructions on page 2)

 

 

 

 

 

No. of

Monthly

No. of

Daily

Interest

 

Date

Event

Amount

Running Balance

Months

Rate

Days

Rate

Due

 

 

 

 

 

 

 

 

 

 

12.

4/17/06

Req. Pymt.

.

.

 

 

 

 

 

13.

4/17/06

Withholding

.

.

 

0.005833

 

0.000192

.

14.

 

Payment

.

.

 

0.005833

 

0.000192

.

15.

 

Payment

.

.

 

0.005833

 

0.000192

.

16.

 

Payment

.

.

 

0.005833

 

0.000192

.

17.

6/15/06

Req. Pymt.

.

.

 

 

 

 

 

18.

6/15/06

Withholding

.

.

 

0.005833

 

0.000192

.

19.

 

Payment

.

.

 

0.005833

 

0.000192

.

20.

 

Payment

.

.

 

0.005833

 

0.000192

.

21.

 

Payment

.

.

 

0.005833

 

0.000192

.

22.

9/15/06

Req. Pymt.

.

.

 

 

 

 

 

23.

9/15/06

Withholding

.

.

 

0.005833

 

0.000192

.

24.

 

Payment

.

.

 

0.005833

 

0.000192

.

25.

 

Payment

.

.

 

0.005833

 

0.000192

.

26.

 

Payment

.

.

 

0.005833

 

0.000192

.

27.

1/16/07

Rate Chg.

 

.

 

 

 

 

 

28.

1/16/07

Req. Pymt.

.

.

 

 

 

 

 

29.

1/16/07

Withholding

.

.

 

0.0075

 

0.000247

.

30.

 

Payment

.

.

 

0.0075

 

0.000247

.

31.

 

Payment

.

.

 

0.0075

 

0.000247

.

32.

 

Payment

.

.

 

0.0075

 

0.000247

.

33.

4/16/07

 

Do not calculate interest after April 16, 2007 —

 

 

34. Total interest due. Add the amounts in the interest column. Round to the nearest

 

whole dollar and enter here and on Form 40, line 51; Form 40N, line 69; or Form 40P, line 68

34

.00

150-101-028 (Rev. 12-06) Web

2006 Form 10

Page 2

ANNUALIZED INCOME WORKSHEET

Read the instructions on page 7 before completing this worksheet. Note: Start with column A. Work down the column, and complete lines 1 through 31 before going on to columns B, C, and D.

1.

Enter your adjusted gross income for each period

 

 

(see instructions)

1

2.

Oregon additions for each period (see instructions)

2

3.

Add lines 1 and 2

3

4.

Annualization multiplier

4

5.

Annualized Oregon income. Multiply line 3 by line 4

5

6.

Oregon subtractions for each period (except federal tax)

6

7.

Annualization multiplier

7

8

Annualized Oregon subtractions. Multiply line 6 by line 7

8

9.

Federal tax from the worksheet on page 7 of the instructions

9

10.

Total subtractions. Add lines 8 and 9

10

11.

Enter your net Oregon itemized deductions for each

 

 

period. If you do not itemize, enter -0- and skip to line 14

 

 

(see instructions)

11

12.

Annualization multiplier

12

13.

Annualized net Oregon itemized deductions.

 

 

Multiply line 11 by line 12

13

14.

In each column, enter the full amount of your Oregon

 

 

standard deduction

14

15.

Enter line 13 or 14, whichever is larger

15

16.

Total deductions. Add lines 10 and 15

16

17.

Annualized Oregon taxable income. Line 5 minus line 16

17

18.

Oregon tax for the amount on line 17 (see tax tables or

 

 

tax rate chart in the 2006 tax booklet)

18

19.

Exemption credit (not annualized) from Form 40, line 33;

 

 

Form 40N, line 54; or Form 40P, line 53

19

20.

Enter the credits for each period. Do not include

 

 

exemption credits (see instructions)

20

21.

Total credits. Add lines 19 and 20

21

22.

Net annualized income tax. Line 18 minus line 21

22

23.

Percentage that applies for each period

23

24.

Multiply line 22 by line 23

24

25.

Enter the sum of all amounts from the prior columns of

 

 

line 31 below (i.e., column A, line 31 amount goes in

 

 

column B, line 25)

25

26.

Line 24 minus line 25. If less than zero, enter -0-

26

27.

*Divide line 9, Part A, by four and enter results in each column...

27

28.

Enter the amount from the previous column of line 30 below

 

 

(i.e., column A, line 30 amount goes in column B, line 28)

28

29.

Add lines 27 and 28

29

30.

If line 29 is more than line 26, line 29 minus line 26.

 

 

If line 29 is less than line 26, enter -0-

30

31.

Enter the smaller of line 26 or line 29 here and on Part B,

 

 

line 11 (see front of the form). Go to line 1 in next column

31

 

A

 

B

 

C

 

D

 

1/1/06

 

1/1/06

 

1/1/06

 

1/1/06

 

to

 

to

 

to

 

to

 

3/31/06

 

5/31/06

 

8/31/06

 

12/31/06

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4

 

2.4

 

1.5

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4

 

2.4

 

1.5

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4

 

2.4

 

1.5

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(

)

(

)

(

)

(

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(

)

(

)

(

)

(

)

 

 

 

 

 

 

 

 

 

22.5%

 

45%

 

67.5%

 

90%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(

)

(

)

(

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* If you are a part-year filer, divide by the number of periods you resided in Oregon, if less than 4. (See instructions for Part B, line 11.)

File this form with your 2006 Oregon Individual Income Tax Return

Have questions? See page 8 of the instructions for numbers to call.

150-101-028 (Rev. 12-06) Web

Continued from page 4...

INSTRUCTIONS FOR ANNUALIZED INCOME WORKSHEET (Form 10, page 2)

Note: Are you using the Annualized Income Worksheet to compute your 2007 estimated tax payments? If so, see page 8 for further instructions.

Part-year residents. If you moved into or out of Oregon dur- ing the year, use only the columns that include the dates you lived in Oregon. You must multiply your Oregon tax (line 18), exemption credit (line 19), and prorated credits (line 20) by your annualized Oregon percentage.

Nonresidents. You must multiply your federal tax sub- traction (line 9), itemized deductions or standard deduction (line 11 or 14), exemption credit (line 19), and prorated cred- its (line 20) by your annualized Oregon percentage.

Line 1. Enter your adjusted gross income (AGI) (Form 40, line 8; Form 40N, line 30S; or Form 40P, line 30F) received during the period shown at the top of each column.

Example 1: Carley received wages for the entire year of 2006. Three months wages belong in column A, five months in column B, eight months in column C, and all 12 months in column D. She also received a lump sum distribution of $25,000 from her IRA on July 19, 2006. Carley includes the total amount of the distribution in columns C and D only. If Carley received the lump sum distribution on April 26, 2006 instead, she includes it in columns B, C, and D.

Line 2. Enter the amount of Oregon additions (Form 40, line 11; Forms 40N or 40P, line 34S) claimed during the period shown at the top of each column.

Example 2: Payton has an Oregon addition of $6,000 for California bond interest received in September 2006. Payton enters the $6,000 in column D. If she received the interest at

$500 a month, she would enter $1,500 (for three months) in column A, $2,500 (for five months) in column B, $4,000 (for eight months) in column C, and all $6,000 (for 12 months) in column D.

Line 6. Enter the amount of Oregon subtractions (Form 40, line 19; Forms 40N or 40P, line 37S) claimed during the period shown at the top of each column.

Line 9. Compute your federal tax subtraction on your annu- alized income using the Federal Tax Subtraction Worksheet below.

If you are filing Form 40N, multiply your federal tax subtraction by your Oregon percentage from Form 40N, line 39.

Line 11. Enter only the amount of your net Oregon itemized deductions claimed for the period shown at the top of each column.

Example 3: Generally, home mortgage interest is a deduction paid evenly throughout the year. Three months of home mortgage interest belong in column A (January, February, and March), five months in column B, eight months in col- umn C, and all 12 months of interest in column D.

Example 4: Medical expenses claimed as medical deductions generally are not incurred evenly throughout the tax year. For example, Jill made deductible payments on a hospital bill in 2006. She made a payment of $990 in April, another of $1,995 in June, and the final payment of $2,271 in October. (All amounts are after the 7.5 percent federal AGI limitation.) Jill will enter the $990 payment in column B. The April pay- ment plus the June $1,995 payment (totaling $2,985) will go

FEDERAL TAX SUBTRACTION WORKSHEET (line 9 )

1.

Enter the amount of your federal AGI for each period

1

2.

Annualization multiplier

2

3.

Multiply line 1 by line 2

3

4.

Actual federal itemized deductions for each period.

 

 

If you do not itemize, skip to line 7 of this worksheet

4

5.

Annualization multiplier

5

6.

Multiply line 4 by line 5

6

7.

Enter the full amount of your 2006 federal standard

 

 

deduction in each column

7

8.

Enter line 6 or line 7, whichever is larger

8

9.

Line 3 minus line 8

9

10. 2006 federal exemption amount (Form 1040, line 42,

 

 

or Form 1040A, line 26)

10

11. Annualized federal taxable income. Line 9 minus line 10

11

12. Federal tax on line 11 amount for each

 

 

period (use the federal tax tables)

12

13. Enter $2,500 if you are married filing separately

 

 

or $5,000 for any other filing status in each column

13

14. Enter the smaller of line 12 or 13. Also enter this amount in

 

 

each column on line 9 of the Annualized Income Worksheet

14

(A)

 

(B)

 

(C)

 

 

(D)

Jan 1

 

Jan 1

 

Jan 1

 

 

Jan 1

to

 

to

 

to

 

 

to

Mar 31

 

May 31

 

Aug 31

 

 

Dec 31

 

 

 

 

 

 

 

 

4

 

2.4

 

1.5

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4

 

2.4

 

1.5

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(

)

(

)

(

)

(

)

 

 

 

 

 

 

 

 

(

)

(

)

(

)

(

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7

in column C. In column D, she will enter $5,256, the total deductible amount of all three payments.

Line 14. If you are married filing separately, and your spouse itemizes deductions, the amount on this line is -0-. You must itemize your deductions.

Line 18. Use the tax tables or tax rate chart in your 2006 Oregon income tax booklet. Line 17 is your annualized Oregon taxable income for each column.

Line 20. Enter credit amounts that apply only to each period.

Example 5: Sam installed a residential alternative energy device on September 4. He qualifies for a credit of $160. Sam includes $160 in column D only.

Estimating your 2007 tax payments

You can use the Annualized Income Worksheet as a guide to compute your 2007 annualized estimated tax payments. Follow the instructions provided for the worksheet. When completing the worksheet, be sure to use the 2007 figures for the Oregon exemption credit, federal tax subtraction, and tax rate charts. You can find these in our publication, Oregon 2007 Instructions for Estimated Income Tax and Form 40-ESV Payment Voucher. To order, call the numbers listed below.

When completing the Annualized Income Worksheet, line 25, enter all previous 2007 estimated tax payments in col- umns B, C, and D. Do not complete the worksheet past line

26.This is your required estimated tax payment for each period of 2007. Questions? See below for numbers to call.

Taxpayer assistance

Internet www.oregon.gov/DOR

Download forms and publications

Get up-to-date tax information

E-mail: questions.dor@state.or.us

This e-mail address is not secure. Do not send any personal information. General questions only.

Correspondence

Write to: Oregon Department of Revenue, 955 Center St NE, Salem OR 97301-2555. Include your Social Security number and a daytime telephone number for faster service.

Field offices

Get forms and assistance at these offices. Don’t send your return to these addresses.

Bend 951 SW Simpson Avenue, Suite 100

Eugene 1600 Valley River Drive, Suite 310 Gresham 1550 NW Eastman Parkway, Suite 220 Medford 3613 Aviation Way, #102 Newport 119 NE 4th Street, Suite 4

North Bend 3030 Broadway Pendleton 700 SE Emigrant, Suite 310 Portland 800 NE Oregon Street, Suite 505

Salem Revenue Building, 955 Center Street NE, Room 135 Salem 4275 Commercial Street SE, Suite 180

Tualatin 6405 SW Rosewood Street, Suite A

Telephone

Salem

503-378-4988

Toll-free from Oregon prefix

1-800-356-4222

Call one of the numbers above to:

Check on the status of your 2006 personal income tax refund (beginning February 1).

Order tax forms.

Hear recorded tax information.

For help from Tax Services, call one of the numbers above:

Monday through Friday ......................................7:30 a.m.–5:00 p.m.

Closed Thursdays from 9:00 a.m.–11:00 a.m. Closed on holidays.

Extended hours during tax season:

 

April 2–April 16, Monday–Friday

7:00 a.m.–7:00 p.m.

Saturday, April 14

9:00 a.m.–4:00 p.m.

Wait times may vary.

 

Asistencia en español:

 

Salem

503-945-8618

Gratis de preijo de Oregon

1-800-356-4222

TTY (hearing or speech impaired; machine only):

Salem

503-945-8617

Toll-free from Oregon preix

1-800-886-7204

Americans with Disabilities Act (ADA): Call one of the help numbers for information in alternative formats

To get forms

Income tax booklets are available at many post offices, banks, and libraries. For booklets and other forms and publications, you can also access our website, order by telephone, or write to: Forms, Oregon Department of Revenue, PO Box 14999, Salem OR 97309-0990.

150-101-031 (Rev. 12-06)

8

File Features

Fact Detail
Purpose of Form 10 Used to determine if interest is owed on underpayment of 2006 estimated tax in Oregon.
Interest Calculation Interest is charged on underpayments or late payments of estimated tax.
Threshold for Interest Interest is a consideration if owing $1,000 or more after withholdings and refundable tax credits.
Methods for Determining Underpayment Includes Estimated 2006 Tax, Safe Harbor 2005 Tax, and Annualized 2006 Tax methods.
Exceptions Farmers/fishermen, prior year's net income tax, retired/disabled individuals, underpayment due to unusual circumstances, and S corporation shareholders may qualify for exceptions.
Governing Law Form 10's requirements and exceptions are governed by Oregon Revised Statutes (ORS) 316.573 and 316.587.

Detailed Steps for Using Oregon 10

Filling out the Oregon Form 10 for underpayment of estimated tax requires careful attention to ensure correct calculation and reporting. This process is designed to assist taxpayers in identifying if they owe interest on underpayments of estimated tax for the year 2006, by following a sequence of methods based on their financial situation and timely tax payments. Here is a straightforward guide to navigate through the form.

  1. Begin by determining if you owe more than $1,000 after withholding and refundable tax credits on your 2006 Oregon income tax return.
  2. If you owe more than $1,000, choose the calculation method most relevant to your situation (Estimated 2006 Tax, Safe Harbor 2005 Tax, or Annualized 2006 Tax).
  3. If claiming an exception due to specific circumstances such as being a farmer, commercial fishermen, newly retired, or disabled, identify the applicable exception category under Part A, Line 1, and indicate the exception number you are claiming.
  4. For Part A—Figure your required annual payment, calculate your net income tax for 2006 and deduct any refundable tax credits you're entitled to. Enter these amounts on lines 2 and 3, respectively.
  5. Subtract the total refundable tax credits from your net income tax to determine if you must make estimated tax payments for underpayment interest.
  6. Enter your total Oregon income tax withheld from income on Line 6. If this amount is equal to or greater than the smaller of lines 5 or 8, you do not owe underpayment interest, and should attach this form to your return without completing the sections for calculating interest.
  7. Under Part B, divide the smaller of line 5 or line 8 by four to determine your required periodic payment and enter these amounts in the corresponding columns for each due date.
  8. In Part C, for calculating interest due, enter the dates and amounts of any estimated payments made across the specified intervals. Remember to calculate your running balance, considering required payments and any withholdings or estimated payments made.
  9. Count the number of full months and days between the event dates that affect your running balance to calculate the underpayment interest accurately. Use the provided interest rates for monthly and daily calculations.
  10. Finally, sum the calculated interest amounts and round to the nearest whole dollar. Enter this total on Line 34 and also on your Oregon income tax return as indicated.

Upon completing Form 10, attach it to your Oregon income tax return, ensuring to check the appropriate box on the return to indicate that Form 10 is included. This process ensures compliance with Oregon's estimated tax payment requirements and helps to avoid any potential penalties for underpayment.

Important Points on This Form

Who is required to make estimated tax payments in Oregon?

Under Oregon law, some taxpayers are required to make estimated tax payments. Specifically, you may need to make payments if you owe $1,000 or more after withholding and refundable tax credits on your Oregon income tax return for the year. Tax payments must be made periodically throughout the year to avoid underpayment interest charges.

How do I know if I owe interest on underpayment of 2006 estimated taxes?

Interest on underpayment of 2006 estimated taxes is determined by several methods. If you owe more than $1,000 after withholding and refundable credits, you'll need to check if your payments met one of the following criteria:

  1. Your timely payments were at least 90% of your 2006 Oregon tax liability after all credits (Estimated—2006 Tax).
  2. Your timely payments were 100% of your 2005 net income tax, minus the working family child care credit (Safe Harbor—2005 Tax).
  3. Your timely payments were at least 90% of your 2006 annualized income tax (Annualized—2006 Tax).
If you don't meet any of the above criteria but qualify for an exception, you may not owe underpayment interest. Ensure to complete and attach Form 10 to your Oregon income tax return if required.

What are the exceptions that allow a taxpayer to avoid underpayment interest?

There are five exceptions that can exempt taxpayers from underpayment interest:

  • Farmers and commercial fishermen with at least two-thirds of their income from these activities.
  • Taxpayers who had no tax liability in the previous year and were full-year Oregon residents.
  • Retirees or disabled individuals who underpaid due to reasonable cause.
  • Underpayment due to casualty, disaster, or other unusual circumstance.
  • S corporation shareholders (specific conditions apply).
To claim an exception, complete the relevant sections of Form 10, including the exception number on Line 1, and attach it to your Oregon tax return.

How do I calculate the interest on underpayment of estimated tax?

To calculate interest on underpayment, complete Part C of Form 10, which involves:

  1. Identifying the amount and dates of required payments due and actual payments made.
  2. Calculating the balance of tax due between events and applying the correct interest rate for the period.
  3. Summing the interest due across all periods, accurately reflecting payments and required amounts for each segment of the year.
Interest calculations are based on the running balance of underpaid tax from the payment periods up to April 16, 2007. Any underpaid tax beyond this date may incur additional interest, calculated separately.

Common mistakes

  1. One common mistake is not accurately determining if they owe underpayment interest on their 2006 estimated taxes. Taxpayers may overlook the criteria in the initial assessment section, erroneously believing they do not need to pay interest because they owe less than $1,000 after withholdings and refundable credits, or because they incorrectly judge their payments against their tax obligations. It's essential to follow the flowchart diligently to ensure accurate determination.

  2. Another mistake involves incorrectly filling out the exception section on Line 1. Taxpayers frequently claim an exemption without thoroughly understanding or meeting the specified conditions. Each exception, from being a farmer or commercial fisherman to experiencing unusual circumstances like a natural disaster, mandates specific criteria and documentation. Without proper substantiation or if criteria are not met, claiming such an exemption invalidates the attempt to waive underpayment interest.

  3. Incorrect calculation of the required annual payment in Part A is also a common error. Taxpayers might not properly subtract their 2006 refundable tax credit amounts from their net income tax, leading to inaccuracies in the multiplication by 90% or the comparison against their 2005 tax situation. Such mistakes can influence the determination of whether they owe underpayment interest, making this step particularly critical for accurate completion.

  4. Finally, in Part C, failure to accurately calculate interest due causes completion problems. This calculation error often stems from mishandling the no. of monthly or daily interest rates and improperly adjusting the running balance through each event and payment date. Moreover, neglecting to stop interest calculation after April 16, 2007, or misunderstanding the impact of withholding and estimated payments on the running balance exacerbates the inaccuracies.

In summary, when completing the Oregon 10 Form, understanding the specific requirements and accurately conducting calculations at each step ensures compliance and avoids common pitfalls. Careful attention to detail, particularly regarding eligibility for exceptions and the correct calculation of interest due, is paramount.

Documents used along the form

When navigating the intricate terrain of tax obligations, particularly in Oregon, understanding the Forms and documents associated with Oregon Form 10 becomes indispensable. Form 10, essential for individuals with underpayment of estimated tax, is a significant piece of the puzzle, but it indeed doesn't stand alone. Alongside it, several other forms and documents play vital roles in ensuring compliance and optimizing an individual's tax situation. Let's peel back the layers and explore these companions to Form 10, each serving its unique purpose in the broader context of tax planning and compliance.

  • Form 40: This is Oregon's Individual Income Tax Return form for residents. It's where you consolidate all your income, deductions, and taxes paid throughout the year. Attached Form 10 would complement this by addressing any estimated tax underpayment.
  • Form 40N: This form is designed for nonresidents or part-year residents of Oregon. It's akin to Form 40 but tailored to account for income earned inside and outside of Oregon. Again, Form 10 would be used alongside this to correct any shortfall in estimated tax payments.
  • Form 40P: Similar to Form 40N, this form is for part-year residents but focuses on pensions and annuities. Individuals fitting this category and needing to adjust their estimated tax payments would use Form 10.
  • Schedule OR-ASC: The Oregon Adjustments for Form 40 filers allows taxpayers to make additions or subtractions to their taxable income, which could influence the amount of estimated tax due.
  • Federal Schedule F: For taxpayers in the farming or fishing sectors, this schedule aids in determining gross income from these activities, which is crucial for Form 10's exception criteria.
  • Federal Schedule E: This form reports income from rental property, royalties, partnerships, S corporations, estates, trusts, and residual interests in REMICs, impacting the taxpayer's overall income assessment and estimated tax considerations.
  • Federal Schedule C/C-EZ: Utilized by individuals who operate a business or engage in profession as a sole proprietor, these schedules inform the gross income computation, affecting estimated tax payments.
  • Federal Form 4797: Reporting the sale of business property, this form can affect a taxpayer's capital gains and, subsequently, their estimated tax calculations and potential underpayment.
  • Annualized Income Worksheet: This document, often attached to Form 10, helps taxpayers who experience fluctuating income throughout the year calculate their required estimated tax payment more accurately.
  • Working Family Child Care Credit Form: An Oregon-specific credit that could lower the total tax liability, indirectly affecting the estimation of tax payments and considerations for underpayment.

The web of tax forms and their interconnected roles illustrate the complexity of tax planning and compliance. Forms like Oregon's Form 10 and its counterparts don't exist in isolation; they interact, shaping a taxpayer's responsibilities and strategies. As such, a comprehensive understanding of these forms, beyond their superficial use, becomes critical in navigating the tax landscape effectively and efficiently.

Similar forms

The Internal Revenue Service (IRS) Form 1040-ES, "Estimated Tax for Individuals," is quite similar to Oregon's Form 10. Both are designed for taxpayers who need to pay estimated taxes on income not subject to withholding, such as earnings from self-employment, interest, dividends, and rental income. These forms help calculate and pay estimated taxes quarterly to avoid underpayment penalties. The key similarity lies in their purpose to assist taxpayers in estimating their tax liability for the year and making periodic payments.

The IRS Form 2210, "Underpayment of Estimated Tax by Individuals, Estates, and Trusts," bears a resemblance to the Oregon Form 10 as well. This form is used to determine if an individual has paid enough tax through withholding or estimated tax payments and to calculate any penalty for underpayment. Like Oregon's Form 10, IRS Form 2210 includes provisions for special situations that might lead to a waiver of the penalty, such as significant changes in income or unusual events.

Form IT-2105, "Estimated Tax Payment Voucher for Individuals," from the New York State Department of Taxation and Finance, shares functionalities with Oregon Form 10. While the Oregon form is specific to its state's residents, both forms serve the same primary function: they allow individuals to submit estimated tax payments. These estimated payments are necessary when the amount withheld from wages or other payments is not sufficient to cover the taxpayer's expected tax liability for the year.

The California Form 540-ES, "Estimated Tax for Individuals," is another document comparable to the Oregon Form 10. Both are state-specific forms intended for residents to calculate and pay their estimated taxes throughout the year. These documents are particularly relevant for individuals with income not subject to regular withholding, ensuring they meet their tax obligations and avoid possible penalties for underpayment.

Michigan's Form MI-1040ES, "Michigan Estimated Income Tax for Individuals," also aligns closely with the purpose of Oregon's Form 10. Each of these state-specific forms provides a mechanism for individuals to prepay their estimated tax liability. The need for such forms typically arises from earning income that is not subject to immediate tax withholding, necessitating the taxpayer to estimate and remit periodic payments manually.

The Virginia Form 760ES, "Estimated Income Tax Payment Vouchers for Individuals," compares to the Oregon Form 10 in its utility and audience. Tailored for Virginia residents, it serves the same essential function: facilitating the quarterly payment of estimated taxes. Particularly for those who do not have taxes withheld from their income sources, such forms are vital in managing tax liabilities efficiently throughout the year.

IRS Form 8801, "Credit for Prior Year Minimum Tax - Individuals, Estates, and Trusts," while addressing a different aspect of tax payments, shares a conceptual similarity with Oregon Form 10 concerning tax adjustments. Oregon's Form 10 is primarily focused on estimated tax payments for the current year and addressing underpayment. In contrast, Form 8801 deals with calculating credits based on minimum tax payments from previous years. However, both forms ultimately aid in ensuring taxpayers' payments align correctly with their tax liabilities, minimizing discrepancies and potential penalties.

Dos and Don'ts

When it comes to filling out the Oregon 10 form for underpayment of estimated tax, it's pivotal to follow a set of dos and don'ts to ensure accuracy and compliance. Here's a comprehensive guide:

  • Do ensure you meet the criteria for needing to file the form by reviewing the initial questions about owing $1,000 or more.
  • Do accurately calculate your required annual payment by carefully filling out Parts A and B with details from your income tax returns.
  • Do keep track of all estimated tax payments you've made throughout the year to accurately report them in Parts B and C.
  • Do use the instructions provided for special situations, such as if you're a farmer or fisherman, to see if you qualify for an exception.
  • Do attach any required documentation, such as statements explaining reasonable cause for underpayment if claiming an exception.
  • Don't forget to sign and date the form before attaching it to your Oregon income tax return.
  • Don't leave any sections blank that apply to you. If uncertain about how to fill out a part, refer back to the instructions or consult a professional.

Correct and careful completion of the Oregon 10 form helps avoid potential penalties for underpayment of estimated taxes and ensures that your tax obligations are fully met.

Misconceptions

When it comes to handling taxes, misinformation can lead to unexpected penalties, interest, or both. This is particularly true with the Oregon Form 10, which pertains to the underpayment of estimated tax. Let’s debunk some common misconceptions to ensure you stay on the right side of Oregon tax law.

  • Misconception 1: Every taxpayer in Oregon must file Form 10.

    This is not the case. Only those who owe $1,000 or more after withholdings and refundable tax credits need to worry about filing Form 10. If your withholdings and credits cover 90% or more of your 2006 Oregon tax liability, or equal 100% of your 2005 tax, you may not need to submit this form.

  • Misconception 2: Form 10 only applies if you underpay your estimated tax.

    While underpayment is a central concern, Form 10 is also necessary for taxpayers claiming certain exceptions to underpayment penalties. These exceptions range from income primarily from farming or fishing to retirement or disability situations.

  • Misconception 3: You can wait until April 16 to figure out if you owe interest on underpayments.

    In reality, Form 10 and any accompanying calculations need to be attached to your Oregon income tax return, which may be due earlier. Procrastination could lead to missed exceptions or errors in calculation.

  • Misconception 4: Penalties are unavoidable if you underpaid throughout the year.

    Not necessarily. The Oregon Department of Revenue provides several methods to calculate whether you owe interest on an underpayment, along with exceptions that might absolve you of penalties.

  • Misconception 5: Oregon residents are the only ones who need to be concerned with Form 10.

    Even if you were a nonresident or part-year resident with Oregon-sourced income, you might need to file Form 10, especially if your situation matches any of the described conditions for owing underpayment interest or qualify for exceptions.

  • Misconception 6: Withholdings don't matter as long as you make estimated payments.

    Incorrect. Withholdings are considered in the calculation of underpayment interest and penalties, as they can help satisfy payment requirements and reduce or eliminate the need for estimated payments altogether.

  • Misconception 7: If you didn’t need to file Form 10 last year, you don’t need to this year.

    Your financial situation can change from year to year, requiring you to stay vigilant. Factors such as changes in income, tax laws, or personal circumstances can all influence the need to file Form 10, even if it wasn't required in a preceding year.

Understanding these nuances is crucial to effectively navigate the complexities of Oregon’s tax system. Whenever in doubt, consulting with a tax professional can provide clarity, ensure compliance, and possibly save you from unnecessary payments.

Key takeaways

Understanding the Oregon 10 form involves recognizing it as a tool for individuals who potentially underpaid their estimated taxes for the year. The form provides a structured approach to calculate any owed interest due to these underpayments. Here are some key takeaways to keep in mind when dealing with the Oregon 10 form:

  • The necessity to fill out this form hinges on whether an individual owes $1,000 or more in taxes after withholdings and refundable credits. If the owed amount is less, the form's completion isn't required.
  • There are several methods provided to determine if underpayment interest is due. These methods offer taxpayers multiple ways to evaluate their tax situation, considering their current year’s tax, the previous year’s tax, and what percentage of their income has been taxed throughout the year.
  • The form outlines exceptions that allow certain taxpayers to avoid paying interest on underpayments. These exceptions include specific cases such as income derived from farming or fishing, being a new resident, or not being required to file a return previously. It’s critical for taxpayers to review these exceptions carefully, as they may be relieved from additional interest charges if qualified.
  • Estimating the required payment and accurately calculating potential interest necessitates precise attention to the dates and amounts of taxes paid throughout the year. The form guides the taxpayer through this process, from determining the required annual payment to figuring out periodic payments, and ultimately calculating the interest on any underpaid tax.

The structured format of the Oregon 10 form, along with its instructions, is designed to assist taxpayers in navigating the complexities of estimated tax payments and underpayment scenarios. By following the guidelines and accurately reporting payment information, taxpayers can ensure compliance with Oregon’s tax laws and potentially mitigate additional interest charges. Remember, it’s crucial to review your entire tax situation, or consult with a tax professional, to make the best decisions regarding the use of this form.

Please rate Oregon 10 Template Form
4.72
(Stellar)
236 Votes