Discover your Adjusted Gross Income (AGI) with our easy-to-use calculator. AGI is a crucial figure on your tax return, influencing your eligibility for various deductions, credits, and even certain investment opportunities. Understand how gross income and specific above-the-line deductions combine to determine this vital financial metric for effective tax planning.
Formula:
The formula for Adjusted Gross Income (AGI) is conceptually:
AGI = Total Gross Income - Above-the-Line Deductions
Where:
- Total Gross Income: Includes wages, salaries, business income, investment income, capital gains, etc.
- Above-the-Line Deductions: Specific deductions subtracted directly from gross income before calculating AGI. Common examples include:
- Deductible IRA contributions
- Deductible HSA contributions
- Student loan interest paid
- Half of self-employment tax
- Alimony paid (for divorce agreements executed before 2019)