Investopedia

Continue to Site »

Annualized Income Installment Method

Filed Under »
Dictionary Says

Definition of 'Annualized Income Installment Method'

A method through which a taxpayer may reduce or eliminate any estimated tax underpayment penalty owed. The annualized income installment method calculates the installment payment that would be due if the income minus deductions earned before the due date were annualized. This exception to the underpayment penalty gives some relief to taxpayers who receive unexpected or uneven income during the year and so cannot accurately estimate their tax liability.
Investopedia Says

Investopedia explains 'Annualized Income Installment Method'

The annualized method can be calculated using Internal Revenue Service (IRS) Form 2210, with additional worksheets in IRS Publication 505. The actual calculations are quite complex, so consulting a tax professional may be a good idea for many taxpayers.

Articles Of Interest

  1.

    Avoiding A Big Tax Bill On Real Estate Gains

    Installment sales allow sellers to defer taxes on real estate profits.

  2. Financial New Year's Resolutions You Can Keep

    Start the year off right by evaluating your financial health and setting new goals.

  3. 10 Money-Saving Year-End Tax Tips

    Getting organized well before the deadline will curb your frustration and your tax liability.

  4. 3 Common Tax Questions Answered

    We clarify some rules that often puzzle taxpayers.

  5. When You Can't Pay Uncle Sam

    If you can't pay your taxes, there are some steps you can take to protect yourself. Discover your options here.

  6. Cut Your Tax Bill

    Paying your bills early or giving an extra donation now can help you come tax time.

  7. What are some commonly missed deductions for business owners?

    If you own a business, you are eligible to deduct certain business-related expenses. These include deductions for the following: Home office: If you use a part of your home regularly and ...

  8. Has Income Tax Become A Class Tax On The Poor?

    With more than 33% of American families falling close to the poverty line despite their adult members holding full-time employment, a rising number of citizens are being forced to pay a rate ...

  9. Possible Effects Of The Online Retail Tax

    The U.S. Senate has passed a bill that will impose a sales tax on online retailers. Discover how the Marketplace Fairness Act could affect your bottom line.

  10. How To Get The Most Out Of Hiring An Accountant

    When you hire an accountant, getting good tax advice going forward is as valuable as – or perhaps even more valuable than - getting the previous year’s taxes filed correctly. Learn what you need ...
comments powered by Disqus
Marketplace
Hot Definitions

  1. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.

  2. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.

  3. Icarus Factor

    The term Icarus factor describes a situation where managers or executives initiate an overly ambitious project which then fails. Fueled by excitement for the project, the executives are unable to reign in their misguided enthusiasm before it is too late to avoid the failure.

  4. Angelina Jolie Stock Index

    An index made up of a selection of stocks from companies associated with actress Angela Jolie.

  5. Consequential Loss

    The amount of loss incurred as a result of being unable to use business property or equipment.

  6. Lease To Own

    An arrangement where an individual enters into a lease agreement with an owner with the inclusion of a clause that typically gives the individual the right, but not the obligation, to purchase the item leased at a predefined price and time.
Trading Center