Income Averaging
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5 year income averaging is still possible?
Answer
There is a Schedule J for farmers and fisherman which uses income averaging. Pro Series has the form. I do not think it is for five years, but it does use income averaging. Each year you use it and it saves dollars, it will lower your income and this will then give lower average income in the future.
If I had any farmers or fisherman, I would closely read the instructions and try to save the customer as much as possible.
I do not know of any other income averaging.
Answer
If you are referring to lump sum retirement payments, the 5 year averaging is gone, but
the 10 year still exists provided the recipeint is at least a few days older than me. Most
people who would qualify took these pensions years ago.
Answer
If you're talking about the old 5-year income averaging for total taxable income (was Schedule G), it's been gone for about 20 years.
Answer
The law was repealed like most responses stated several year ago and is not avilable for use now
Comment
Though it hasn't been available for most people for quite a while, I still get questions about it frequently.
Answer
I get questions about it too, and the last Sch G was 1984!
Comment
For those of you new to tax preparation, 5 year lump sum averaging was repealed for all tax years beginning after December 31, 1999. You must have missed that law.