Free Oregon 10 Form

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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.

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.

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.

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.

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

Exception No._______

PART B—Figure your required periodic payment

.00

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 )

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

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.

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.