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 2025 tax year.

2. How AGI is Calculated

The basic formula for calculating AGI is:

Where:

• Gross Income — All income you receive in the form of money, goods, property, and services that isn't exempt from tax
• Adjustments — Specific deductions allowed by the IRS to reduce your gross income

Common Adjustments for 2025 may include:

• Educator expenses
• Certain business expenses
• Health savings account contributions
• Moving expenses for military
• Self-employment tax
• Student loan interest
• Tuition and fees

3. Importance of AGI

Details: Your AGI affects many aspects of your tax return including:

• Determining your taxable income after standard or itemized deductions
• Eligibility for certain tax credits and deductions
• Calculation of alternative minimum tax (AMT)
• Income thresholds for various tax provisions

4. Using the Calculator

Tips:

• Enter your total gross income for 2025
• Enter the sum of all adjustments you qualify for
• The calculator will compute your Adjusted Gross Income
• Consult a tax professional for specific advice about your situation

5. Frequently Asked Questions (FAQ)

Q1: Is AGI the same as taxable income?
A: No, AGI is calculated before standard or itemized deductions and personal exemptions are subtracted to arrive at taxable income.

Q2: Where can I find my AGI from last year?
A: Your AGI from the previous year appears on line 11 of your 2024 Form 1040.

Q3: Can my AGI be negative?
A: While possible in rare cases, this calculator shows $0 for negative results as negative AGI is unusual and may require special tax treatment.

Q4: Are all deductions considered adjustments?
A: No, only specific "above-the-line" deductions qualify as adjustments to calculate AGI. Other deductions come later in the tax calculation.

Q5: Will this calculator work for state taxes?
A: Most states start with federal AGI but may have state-specific adjustments. Check with your state's tax authority.