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

The basic formula for AGI is:

Where:

• Gross Income — All income you receive in the form of money, goods, property, and services
• Adjustments — Specific deductions allowed by the IRS (e.g., educator expenses, student loan interest, IRA contributions)

3. Importance of AGI

Details: Your AGI affects your taxable income and determines your eligibility for many tax benefits. It's used to calculate limitations on itemized deductions, tax credits, and retirement account contributions.

4. Using the Calculator

Tips: Enter your total gross income and the sum of all adjustments to income. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

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

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

Q3: How does AGI affect my taxes?
A: Many tax credits and deductions have AGI phase-out ranges. A lower AGI may qualify you for more tax benefits.

Q4: Where can I find my AGI on my tax return?
A: For Form 1040, your AGI appears on line 11 (for 2022 returns). It's labeled "Adjusted Gross Income."

Q5: Can AGI be negative?
A: Yes, if your adjustments exceed your gross income, your AGI can be negative, though this is uncommon.