1. What is Adjusted Gross Income (AGI)?

Adjusted Gross Income (AGI) is your total gross income minus specific adjustments. In Florida, AGI is used to determine eligibility for certain tax deductions and credits, even though Florida doesn't have a state income tax.

2. How AGI is Calculated

The basic formula for calculating AGI is:

Where:

• Gross Income - All income from all sources before any deductions
• Adjustments - Specific deductions allowed by the IRS to arrive at AGI

Common adjustments include: Educator expenses, student loan interest, alimony payments (for agreements before 2019), contributions to retirement accounts, and self-employment taxes.

3. Importance of AGI in Florida

Details: While Florida doesn't have a state income tax, AGI is still important for federal tax purposes, qualifying for certain federal programs, and financial planning. Many lenders and financial institutions also use AGI to evaluate loan applications.

4. Using the Calculator

Tips: Enter your total gross income and all applicable adjustments in dollars. The calculator will compute your AGI, which you can then use for tax planning and financial decision-making.

5. Frequently Asked Questions (FAQ)

Q1: Is Florida AGI different from federal AGI?
A: No, Florida uses the same AGI calculation as the federal government since there's no state income tax.

Q2: What's the difference between AGI and taxable income?
A: Taxable income is your AGI minus either the standard deduction or itemized deductions and any qualified business income deduction.

Q3: Why is AGI important if Florida has no income tax?
A: AGI is still used for federal taxes, financial aid applications, and qualifying for certain tax credits and deductions.

Q4: What counts as an adjustment to income?
A: Common adjustments include IRA contributions, student loan interest, educator expenses, and health savings account contributions.

Q5: Can AGI be negative?
A: Yes, if your adjustments exceed your gross income, resulting in a negative AGI.