Adjusted Gross Income (AGI) Calculator
Print| Total Gross Income | $0.00 |
| Total Adjustments / Deductions | $0.00 |
Adjusted Gross Income (AGI) is the core baseline income figure used by the Internal Revenue Service (IRS) to calculate your federal income tax liability. Derived on IRS Form 1040, AGI equals your total gross income minus allowable above-the-line deductions (Schedule 1 adjustments). AGI dictates your tax bracket, eligibility for tax credits, Roth IRA contribution limits, and income-driven student loan payments.
Our free Adjusted Gross Income (AGI) Calculator computes your AGI, above-the-line tax savings, and Modified Adjusted Gross Income (MAGI).
How to Calculate Adjusted Gross Income (AGI)
AGI subtracts specific eligible tax adjustments directly from gross income before applying standard or itemized deductions.
The Adjusted Gross Income Formula:
Adjusted Gross Income (AGI) = Total Gross Income - Total Above-the-Line Deductions
Step 1: Calculate Total Gross Income
Gross Income = W-2 Wages + Business Income + Capital Gains + Dividends + Interest + Taxable Pensions + Rental Income + Alimony Received
Step 2: Subtract Above-the-Line Deductions (Schedule 1 Adjustments)
- Traditional IRA Contributions
- Health Savings Account (HSA) Contributions
- Student Loan Interest Paid (up to $2,500)
- Self-Employment Tax Deduction (50% of SE tax)
- Self-Employed Health Insurance Premiums
- SEP-IRA, SIMPLE IRA, or Solo 401(k) Contributions
- Educator Expenses (up to $300)
- Early Withdrawal Penalties on Savings
AGI vs MAGI: Tax Thresholds & Eligibility
AGI and Modified AGI (MAGI) determine your qualification for major federal tax benefits:
| Tax Benefit / Credit | Relevant Income Metric | Impact of Lower AGI / MAGI |
|---|---|---|
| Roth IRA Contribution Phaseout | MAGI | Lower MAGI enables direct Roth IRA contributions. |
| Child Tax Credit & EV Tax Credit | MAGI | Prevents credit phaseout or forfeiture. |
| Medical Expense Deduction Threshold | AGI | Only medical expenses exceeding 7.5% of AGI are deductible. Lower AGI increases deduction. |
| Income-Driven Student Loan Repayment | AGI | Reduces required monthly student loan payments under SAVE / IDR plans. |
Step-by-Step Calculation Example
Consider a taxpayer filing single with the following income and deduction records:
- W-2 Salary Income: $85,000
- Net Freelance Income: $10,000
- Capital Gains: $5,000
- Total Gross Income: $100,000
Above-the-Line Deductions Claimed:
- Traditional IRA Deduction: $6,500
- HSA Contribution Deduction: $3,850
- Student Loan Interest Deduction: $1,500
- Self-Employment Tax Deduction (50%): $707
- Total Above-the-Line Deductions: $12,557
Step 1: Compute Adjusted Gross Income (AGI)
AGI = $100,000 - $12,557 = $87,443
Result Interpretation:
By claiming $12,557 in above-the-line deductions, the taxpayer reduces their IRS baseline income from $100,000 to an AGI of $87,443 before applying the standard deduction.
Frequently Asked Questions (FAQ)
What is the difference between AGI and Taxable Income?
AGI is gross income minus above-the-line deductions. Taxable Income is derived by taking AGI and subtracting either the standard deduction or itemized deductions, plus any qualified business income (QBI) deductions.
What is Modified Adjusted Gross Income (MAGI)?
MAGI takes your AGI and adds back specific tax deductions, such as student loan interest deductions, foreign earned income exclusions, or IRA contribution deductions. MAGI is used to determine tax credit phaseouts and Roth IRA eligibility.
Where can I find my prior-year AGI?
Your prior-year AGI is located on Line 11 of your IRS Form 1040 from the previous tax return year. It is frequently required by electronic tax software for identity verification.