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.

2. How AGI is Calculated from W2 Income

The basic formula for calculating AGI from W2 income is:

Where:

• W2 Income — Your total taxable wages from all W2 forms
• Adjustments — Eligible deductions that reduce your taxable income (e.g., student loan interest, IRA contributions, educator expenses)

3. Importance of AGI Calculation

Details: AGI is used to determine your eligibility for many tax benefits, including Roth IRA contributions, education credits, and the earned income tax credit. It also affects your ability to deduct medical expenses and charitable contributions.

4. Using the Calculator

Tips: Enter your total W2 income (Box 1 of all W2 forms combined) and any adjustments you're eligible for. The calculator will compute your AGI.

5. Frequently Asked Questions (FAQ)

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

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

Q3: Where can I find my W2 income?
A: W2 income is reported in Box 1 of your W2 form(s) from your employer(s).

Q4: Is AGI the same as taxable income?
A: No, taxable income is AGI minus either the standard deduction or itemized deductions.

Q5: Why is my AGI important for next year's taxes?
A: Your prior year's AGI is often used to verify your identity when e-filing your tax return.