1. What is Adjusted Gross Income (AGI)?

AGI is your gross income minus specific adjustments. It's a key number on your tax return that determines eligibility for many tax credits and deductions. Your AGI appears on line 11 of Form 1040.

2. How to Calculate AGI from W2

The basic formula to calculate AGI from your W2 is:

Where:

• W2 Box 1 — Shows your taxable wages, tips, and other compensation
• Adjustments — IRS-approved deductions that reduce your taxable income

3. Common Adjustments to Income

Common adjustments include:

• Educator expenses
• Student loan interest
• Traditional IRA contributions
• Self-employed health insurance
• Alimony payments (for pre-2019 divorces)
• Moving expenses for military

4. Using This Calculator

Instructions: Enter your W2 Box 1 amount and any adjustments to income. The calculator will compute your AGI. Note this is an estimate - consult a tax professional for exact calculations.

5. Frequently Asked Questions (FAQ)

Q1: Is W2 Box 1 the same as gross income?
A: No, Box 1 shows taxable wages after pre-tax deductions like 401(k) contributions and health insurance premiums.

Q2: Where do I find my adjustments?
A: Adjustments are listed on Schedule 1 (Form 1040), Part II.

Q3: Does this calculator account for all income sources?
A: No, it only calculates AGI from W2 wages. You may need to include other income like self-employment, rental, or investment income.

Q4: Why is my AGI important?
A: AGI affects tax credits, deductions, and eligibility for certain government programs.

Q5: How can I lower my AGI?
A: Contributing to retirement accounts, HSAs, or taking eligible deductions can reduce your AGI.