Adjusted Gross Income - AGI

AAA

DEFINITION of 'Adjusted Gross Income - AGI'

A measure of income used to determine how much of your income is taxable. Adjusted gross income (AGI) is calculated as your gross income from taxable sources minus allowable deductions, such as unreimbursed business expenses, medical expenses, alimony and deductible retirement plan contributions.

Also referred to as "net income."

INVESTOPEDIA EXPLAINS 'Adjusted Gross Income - AGI'

Your AGI is figured on Page 1 of your federal tax return, and it is used to establish eligibility for financial benefits such as IRA contribution deduction limits and social security benefits.

RELATED TERMS
  1. Gross Profit

    A company's revenue minus its cost of goods sold. Gross profit ...
  2. Income Tax

    A tax that governments impose on financial income generated by ...
  3. Married Filing Jointly

    A filing status for married couples that have wed before the ...
  4. Personal Income

    Total compensation received by an individual. Personal income ...
  5. Taxable Income

    The amount of income that is used to calculate an individual's ...
  6. Accumulated Earnings Tax

    A tax imposed by the federal government upon companies with retained ...
RELATED FAQS
  1. What assets are taxable and what assets are not taxable?

    Adjust your taxable income by understanding what assets the IRS taxes. Learn about legal strategies to lower tax liability ...
  2. How can I avoid paying taxes on my Social Security income?

    Learn how to calculate the percentage of Social Security income benefits that may be taxable, and discover strategies to ...
  3. What are the differences among gross income, adjusted gross income and modified adjusted ...

    Discover how calculating total taxable income is easier when gross income, adjusted gross income and modified adjusted gross ...
  4. How are Simplified Employee Pension (SEP) IRAs taxed?

    Understand the tax advantages of a Simplified Employee Pension IRA plan, and find out how both the employer and the employee ...
  5. Do IRA contributions reduce average gross income (AGI)?

    Reduce your IRA AGI by contributing to a traditional IRA whose contribution limits for 2014 are set at $5,500 for taxpayers ...
Related Articles
  1. Taxes

    Tax-Saving Advice For IRA Holders

    Be informed about benefits and deductions that may apply to you and avoid costly mistakes on your return.
  2. Taxes

    Cut Taxes By Reporting Property Damage

    Know the options you have for your insured property if and when a disaster strikes.
  3. Retirement

    Traditional IRA Deductibility Limits

    Find out where you can take a tax deduction on the contributions you make.
  4. Savings

    Saver's Tax Credit: A Retirement Savings Incentive

    Here's another reason to put money toward your retirement nest egg.
  5. Taxes

    Deducting Your Donations

    Generosity may be its own reward, but some charitable giving also provides personal tax benefits.
  6. Taxes

    Tax Deductions You May Be Missing

    Knowing the tax deductions you're entitled to can make or break your bank account.
  7. Taxes

    How To Cut Your Alternative Minimum Tax

    Save yourself money by lowering the amount of tax you owe.
  8. Retirement

    Keep Working Or Stay At Home With The Kids?

    Choosing to stay at home with the kids is a choice that has both positive and negative financial consequences.
  9. Taxes

    Student Tax Breaks

    Education bills may not be as stressful as you think - these student tax breaks can help!
  10. Investing

    What's MAGI?

    Modified adjusted gross income, or MAGI, is one aspect of a person’s income that is calculated while preparing a tax return.

You May Also Like

Hot Definitions
  1. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  2. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  3. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  4. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
  5. Law Of Supply

    A microeconomic law stating that, all other factors being equal, as the price of a good or service increases, the quantity ...
  6. Investment Grade

    A rating that indicates that a municipal or corporate bond has a relatively low risk of default. Bond rating firms, such ...
Trading Center