Annualized Income

Annualized Income

An estimate of the amount of money that an individual, business or asset will earn over the course of a year. Annualized income is usually calculated with less than one year's worth of data, so it is only an estimate of how much income will actually be earned for the year. Nonetheless, annualized income figures can be helpful for creating budgets and making estimated income tax payments.

To calculate annualized income, multiply the earned income figure by the number of months in a year divided by the number of months of income data available. For example, if a consultant earned $10,000 in January, $12,000 in February, $9,000 in March and $13,000 in April, the earned income figure for those four months would be $44,000. To annualize the consultant's income, multiply $44,000 by 12/4 to get $132,000.


Investment dictionary. . 2012.

Игры ⚽ Поможем сделать НИР

Look at other dictionaries:

  • 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… …   Investment dictionary

  • Annualize — 1. To convert a rate of any length into a rate that reflects the rate on an annual (yearly) basis. This is most often done on rates of less than one year, and usually does not take into account the effects of compounding. The annualized rate is… …   Investment dictionary

  • return on assets — ( ROA) A percentage calculated by dividing net income after tax by total assets. Annual income is usually used in the numerator; however, the annualized income for a month, quarter, or half year can be used. Period end assets is often used in… …   Financial and business terms

  • ROA — return on assets (ROA) A percentage calculated by dividing net income after tax by total assets. Annual income is usually used in the numerator; however, the annualized income for a month, quarter, or half year can be used. Period end assets is… …   Financial and business terms

  • annualize — ˈanyə(wə)ˌlīz transitive verb ( ed/ ing/ s) Etymology: annual (I) + ize : to compute for periods of less than a year on a basis corresponding to that applicable to a full year annualized income …   Useful english dictionary

  • Constant Percent Prepayment — Annualized estimate of mortgage loan prepayments, computed by multiplying the average monthly prepayment rate by 12. This is used to determine cash flow in structured finance transactions, often referred to as the secondary mortgage market. It… …   Investment dictionary

  • Economic Affairs — ▪ 2006 Introduction In 2005 rising U.S. deficits, tight monetary policies, and higher oil prices triggered by hurricane damage in the Gulf of Mexico were moderating influences on the world economy and on U.S. stock markets, but some other… …   Universalium

  • Rate of return — In finance, rate of return (ROR), also known as return on investment (ROI), rate of profit or sometimes just return, is the ratio of money gained or lost (whether realized or unrealized) on an investment relative to the amount of money invested.… …   Wikipedia

  • japan — japanner, n. /jeuh pan /, n., adj., v., japanned, japanning. n. 1. any of various hard, durable, black varnishes, originally from Japan, for coating wood, metal, or other surfaces. 2. work varnished and figured in the Japanese manner. 3. Japans,… …   Universalium

  • Japan — /jeuh pan /, n. 1. a constitutional monarchy on a chain of islands off the E coast of Asia: main islands, Hokkaido, Honshu, Kyushu, and Shikoku. 125,716,637; 141,529 sq. mi. (366,560 sq. km). Cap.: Tokyo. Japanese, Nihon, Nippon. 2. Sea of, the… …   Universalium

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”