1. What is Adjusted Gross Income (AGI)?

Adjusted Gross Income (AGI) is your total gross income minus specific adjustments. It's an important number used to determine your taxable income and eligibility for certain tax deductions and credits.

2. How Does the Calculator Work?

The calculator uses the simple AGI formula:

Where:

• Gross Income — Your total income from all sources before any deductions
• Adjustments — Specific deductions allowed by the IRS (e.g., student loan interest, IRA contributions, educator expenses)

3. Importance of AGI Calculation

Details: Your AGI is used to determine your eligibility for many tax benefits and credits. It affects your taxable income, which in turn affects how much tax you owe.

4. Using the Calculator

Tips: Enter your total gross income and the sum of all your adjustments in dollars. 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 your total income before any deductions. AGI is your 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, and self-employment taxes.

Q3: Why is AGI important?
A: AGI is used to determine eligibility for many tax credits and deductions, and it serves as the starting point for calculating your taxable income.

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

Q5: Where can I find my AGI on my tax return?
A: For Form 1040, your AGI appears on line 11 (for 2022 returns) or line 8b (for 2021 returns).