Create the annotated bibliography first. Once you've listed all of your sources, indenting the page is an easy step.
Format the annotated bibliography page. It should be on its own page with the title of "References". Remember to list entries alphabetically and to use double spacing, not single spacing.
Use a hanging indent for annotated bibliographies. The first line should be flush with the paper's left margin. All other lines on the paper should be indented six spaces from the margin. Some professors allow you to use the tab key to create an indentation in your paper. If this is the case, tab over once then add two spaces for the bibliography.