Adjusted Gross Income (AGI) - Glossary (2024)

FAQs

Adjusted Gross Income (AGI) - Glossary? ›

Your total (or “gross”) income for the tax year, minus certain adjustments you're allowed to take. Adjustments include deductions for conventional IRA contributions, student loan interest, and more. Adjusted gross income appears on IRS Form 1040, line 11.

Your adjusted gross income (AGI) is your total (gross) income from all sources minus certain adjustments such as educator expenses, student loan interest, alimony payments and retirement contributions. If you use software to prepare your return, it will automatically calculate your AGI.

Adjusted gross income, also known as (AGI), is defined as total income minus deductions, or "adjustments" to income that you are eligible to take. Gross income includes wages, dividends, capital gains, business and retirement income as well as all other forms income.

The difference between "Deduction for AGI" and "Deduction from AGI" can be explained as follows: 1. Deduction for AGI is also known as an above-the-line deduction, and it is allowed even if the taxpayer does not itemize their deduction. In contrast, deduction from AGI is allowed only if taxpayer itemized deductions.

MAGI is adjusted gross income (AGI) plus these, if any: untaxed foreign income, non-taxable Social Security benefits, and tax-exempt interest. For many people, MAGI is identical or very close to adjusted gross income. MAGI doesn't include Supplemental Security Income (SSI).

If you do not have a copy of your tax return, you can get your AGI from one of the IRS self-service tools: Use your online account to immediately view your AGI on the Tax Records tab. If you're a new user, have your photo identification ready.

Your adjusted gross income (AGI) is equal to your gross income minus any eligible adjustments that you may qualify for. These adjustments to your gross income are specific expenses the IRS allows you to take that reduce your gross income to arrive at your AGI.

You generally do not include life insurance payments, child support, loan proceeds, inheritances or gifts in your AGI, though. From your gross income, you then subtract specific amounts by making “adjustments” called “above the line” deductions.

What is adjusted gross income? Adjusted gross income (AGI) is an important number on your federal income tax return. It includes all the money you made during the year, minus adjustments to income—things like retirement plan contributions, student loan interest, and some health insurance premiums.

Your MAGI (modified adjusted gross income) is your AGI plus certain deductions you must “add back.” These deductions include IRA contributions, student loan interest, one-half of self-employment tax, qualified tuition expenses, and more.

Is Social Security included in AGI? ›

Social Security benefits are included in your adjusted gross income (AGI) if your total income, which consists in half of your Social Security benefits and other sources of income, exceeds a certain threshold.

Earned income refers to all of the money that you receive. This includes money from investments and Social Security, as well as any disability money that you have been paid. Equally important is your Adjusted Gross Income, which is used to determine how much of your income is taxable.

Your adjusted gross income is the amount of money you receive each month that is subject to taxes. AGI is only used on individual tax returns. Although AGI is typically referred to as net income, they are not exactly the same. Whereas net income refers to after-tax income, AGI is total taxable income.

The AGI calculation is relatively straightforward. It is equal to the total income you report that's subject to income tax—such as earnings from your job, self-employment, dividends and interest from a bank account—minus specific deductions, or “adjustments” that you're eligible to take.

How Do I Determine My Adjust Gross Income (AGI)? If you add up your total income and then subtract the deductions you are eligible for, you will arrive at your adjusted gross income.

Capital gains can be taxed differently, but they are still included in your adjusted gross income. This can affect the tax bracket you are in and your ability to participate in income-based investments.

Your adjusted gross income acts as a guidepost for several aspects of your finances. Your AGI determines whether you're eligible for various tax credits during tax time. While you can't find AGI on the W2 your employer sent you, you'll use your Form W-2 to help calculate AGI.

Alternatively, you can calculate your gross income as (1) your monthly salary before taxes or (2) the number of hours you will work in a given month multiplied by your hourly pay rate.

To calculate your modified adjusted gross income, take your AGI and "add-back" certain deductions. Many of these deductions can be rare, so it's possible your AGI and MAGI can be identical. Different credit and deductions can have differing add-backs for your MAGI calculation.