1. What is MAGI?

MAGI (Modified Adjusted Gross Income) is your AGI plus certain deductions and exclusions. It's used to determine eligibility for various tax benefits, health insurance subsidies, and retirement account contributions.

2. How MAGI is Calculated

The basic MAGI formula is:

Where:

• AGI — Your Adjusted Gross Income from line 11 of Form 1040
• Additions — Certain tax-exempt income and deductions you previously claimed

3. Importance of MAGI

Details: MAGI determines eligibility for premium tax credits under the Affordable Care Act, Roth IRA contributions, student loan interest deductions, and other tax benefits.

4. Common Additions to AGI

Common items added back to AGI to calculate MAGI include:

• Tax-exempt foreign income
• Tax-exempt Social Security benefits
• Tax-exempt interest
• Deductible IRA contributions
• Student loan interest deduction
• Tuition and fees deduction

5. Frequently Asked Questions (FAQ)

Q1: Is MAGI the same as taxable income?
A: No, MAGI includes some income that isn't taxable and adds back certain deductions.

Q2: Where do I find my AGI?
A: AGI appears on line 11 of your Form 1040 tax return.

Q3: Why do different programs use different MAGI calculations?
A: Different programs may add different items back to AGI, so always check the specific requirements.

Q4: Does MAGI include standard or itemized deductions?
A: No, MAGI is calculated before these deductions are applied.

Q5: How often should I calculate my MAGI?
A: You should calculate it annually when preparing your taxes or when applying for health insurance.