what is annualized income 
annualized income is an estimate of the amount of money that an individual a business or an investment generates over a year s time it is calculated based on less than one year s worth of data so it is only an approximation of total income for the year annualized income numbers are useful for creating a budget and for calculating estimated income tax payments understanding annualized incomeannualized income can be calculated by multiplying the earned income figure by the ratio of the number of months in a year divided by the number of months for which income data is available say for example 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 totals 44 000 to annualize the consultant s income multiply 44 000 by 12 4 to equal 132 000 