Income Spreading

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Definition: Income Spreading

Income Spreading
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Full Definition of Income Spreading

The practice of reporting income over a period of several years rather than in a single year to avoid being taxed in a higher income bracket. The IRS tax code permits this type of income spreading in certain situations. For example, if a business owner sells a business for $20,000 but receives payments from the buyer in installments of $4,000 per year over a period of 5 years, the income from the sale might be spread over that time period.

Cite Term

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https://payrollheaven.com/define/income-spreading/
Modern Language Association (MLA):
Income Spreading. PayrollHeaven.com. Payroll & Accounting Heaven Ltd.
February 22, 2025 https://payrollheaven.com/define/income-spreading/.
Chicago Manual of Style (CMS):
Income Spreading. PayrollHeaven.com. Payroll & Accounting Heaven Ltd.
https://payrollheaven.com/define/income-spreading/ (accessed: February 22, 2025).
American Psychological Association (APA):
Income Spreading. PayrollHeaven.com. Retrieved February 22, 2025
, from PayrollHeaven.com website: https://payrollheaven.com/define/income-spreading/

Definition Sources

Definitions for Income Spreading are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 20th November, 2021 | 0 Views.