1. What is Adjusted Gross Income (AGI)?

Adjusted Gross Income (AGI) is your total gross income minus specific adjustments. It's a key figure on your tax return that determines your eligibility for certain tax credits and deductions.

2. How AGI is Calculated

The basic AGI calculation formula is:

Where:

• Gross Income - All income you receive in the form of money, goods, property, and services
• Adjustments - Specific deductions allowed by the IRS (2024 adjustments include educator expenses, student loan interest, etc.)

3. Importance of AGI

Details: AGI is used to determine your taxable income and eligibility for various tax benefits. Many states also use federal AGI as the starting point for state income tax calculations.

4. Using the Calculator

Tips: Enter your total gross income and all applicable adjustments for 2024. The calculator will compute your AGI, which is the starting point for determining your taxable income.

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: For 2024, common adjustments include educator expenses, student loan interest, contributions to traditional IRAs, and self-employment taxes.

Q3: Why is AGI important for tax filing?
A: AGI determines eligibility for many tax credits and deductions, and is the starting point for calculating your taxable income.

Q4: Does AGI include standard or itemized deductions?
A: No, AGI is calculated before standard or itemized deductions and personal exemptions are applied.

Q5: How often does the IRS update adjustment amounts?
A: The IRS typically updates adjustment limits annually for inflation. This calculator uses 2024 limits.