1. What is Adjusted Gross Income (AGI)?

Adjusted Gross Income (AGI) is your total gross income minus specific adjustments. It's a key figure used to determine your taxable income and eligibility for certain tax credits and deductions for the 2023 tax year.

2. How AGI is Calculated

The basic AGI formula for 2023 is:

Where:

• Gross Income — All income you received in the form of money, goods, property, and services
• Adjustments — Specific deductions allowed by the IRS (e.g., educator expenses, student loan interest, IRA contributions)

3. Importance of AGI

Details: Your AGI affects your taxable income and determines eligibility for many tax benefits. It's used to calculate limitations on itemized deductions, qualify for certain tax credits, and determine eligibility for income-based programs.

4. Using the Calculator

Tips: Enter your total gross income and adjustments in dollars. Both values must be positive numbers. The calculator will compute your 2023 AGI.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between gross income and AGI?
A: Gross income is all your income before any deductions. AGI is gross income minus specific adjustments allowed by the IRS.

Q2: What are common adjustments to income?
A: Common 2023 adjustments include educator expenses, student loan interest, IRA contributions, self-employment tax, and health savings account contributions.

Q3: Why is AGI important for taxes?
A: AGI is used to determine your eligibility for many tax deductions and credits, and it serves as the starting point for calculating your taxable income.

Q4: Where can I find my AGI from last year?
A: Your AGI from 2022 appears on line 11 of your 2022 Form 1040.

Q5: Does AGI include standard or itemized deductions?
A: No, AGI is calculated before either standard or itemized deductions are applied.