If one lives in a locality with a progressive tax system, one's tax burden is lighter if one has an income of X over four years, rather than 4X in one year and none in the other three.

In the US, income averaging used to be generally permitted, so an engineer graduating from school and starting a job in industry might restate their taxes in order to move some of their income to prior years.

Farmers and fishermen still can income average; I am not sure if there are any more groups that qualify.

This thought often springs to mind when driving 101 in California, which seems to have sprouted an amazing number of vineyards lately, both full operations and ranchettes.

''Actually the vineyard business is quite profitable. Sonoma County (north of San Francisco in the "Wine Country") is getting more grapes all the time, for better or for worse. - RobertField''

''Well, it was for worse - the WineCountry has experienced overproduction the last two years. Too many grapes, bad economy lowering demand for premium grapes. - RobertField.''

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What if you make a bundle, let's say sell farm goods and give away software or consulting services for free? Would that count for income averaging?
-- ManfredLange

''Different concept. Income averaging applied to reducing the effect of good years by averaging with bad.''