Income Averaging

Income Averaging means:
a method of computing personal income tax whereby the tax is figured on the average of the total income for the current year and the total incomes for the 3 preceding years. Income averaging was eliminated by the Tax Reform Act of 1986, so bunching of income is not relieved when there is a concentration of income in a single tax year.

See the entries Income Tax and State Income Tax in the American Encyclopedia of Law.