1. What is AGI?

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

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 — Certain deductions you can claim (student loan interest, IRA contributions, etc.)

Note: Your W2 Box 1 amount is typically your gross income minus pre-tax deductions like 401(k) contributions and health insurance premiums.

3. Importance of AGI

Details: AGI is used to determine your eligibility for many tax benefits, including deductions, credits, and contribution limits for retirement accounts. Many states also use federal AGI as the starting point for state tax calculations.

4. Using the Calculator

Tips: Enter your W2 Box 1 amount (found on your W2 form) and any adjustments to income you qualify for. The calculator will compute your AGI.

5. Frequently Asked Questions (FAQ)

Q1: Where do I find Box 1 on my W2?
A: Box 1 is labeled "Wages, tips, other compensation" on your W2 form from your employer.

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

Q3: Is AGI the same as taxable income?
A: No, AGI is before standard/itemized deductions and qualified business income deduction. Taxable income is AGI minus these deductions.

Q4: Why is my AGI higher than my take-home pay?
A: AGI includes all taxable compensation before deductions for taxes, retirement contributions, and benefits.

Q5: Can I have negative AGI?
A: No, the IRS considers negative AGI as zero for tax purposes.