What is the Annualized Income Installment Method?

If your income varied during the year because, for example, you operated your business on a seasonal basis or had a large capital gain late in the year, you may be able to lower or eliminate the amount of one or more required installments by using the annualized income installment method.

We'll guide you through this method if your income varied during the year and you want to try to reduce your penalty using this method. This method is most beneficial if you had more income near the end of the year.