Modified Adjusted Gross Income - MAGI


DEFINITION of 'Modified Adjusted Gross Income - MAGI'

The amount of income that determines how much of an individual's IRA contribution is deductible. The modified adjusted gross income is found by taking the individual's adjusted gross income and adding back certain items such as foreign income, foreign-housing deductions, student-loan deductions, IRA-contribution deductions and deductions for higher-education costs.


Loading the player...

BREAKING DOWN 'Modified Adjusted Gross Income - MAGI'

The higher the modified adjusted gross income, the more the deductible amount of the IRA contribution will be reduced, possibly going down even to zero. If this happens, one can still contribute to an IRA plan, it's just that the whole amount contributed will not be tax deductible. The amount calculated in MAGI will often be similar or even the same as adjusted gross income.

  1. Adjusted Gross Income - AGI

    A measure of income calculated from your gross income and used ...
  2. Roth IRA

    An individual retirement plan that bears many similarities to ...
  3. Individual Retirement Account - ...

    An investing tool used by individuals to earn and earmark funds ...
  4. Provisional Income

    The level of income that is used to determine whether a taxpayer ...
  5. Taxes

    An involuntary fee levied on corporations or individuals that ...
  6. Qualified Longevity Annuity Contract

    A Qualified Longevity Annuity Contract (QLAC) is a deferred annuity ...
Related Articles
  1. 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.
  2. Retirement

    How IRA Contributions Affect Your Taxes

    Learn how to work with the tax man to avoid getting gouged when you convert your plans.
  3. Taxes

    4 IRA Changes That Encourage Savings

    Find out what's new in the world of IRAs and how you can get more bang for your buck.
  4. Options & Futures

    Roth IRAs Tutorial

    This comprehensive guide goes through what a Roth IRA is and how to set one up, contribute to it and withdraw from it.
  5. Retirement

    5 Secrets You Didn’t Know About Traditional IRAs

    A traditional IRA gives you complete control over your contributions, and offers a nice complement to an employer-provided savings plan.
  6. Retirement

    Using Your IRA to Invest in Property

    Explain how to use an IRA account to buy investment property.
  7. Retirement

    How a 401(k) Works After Retirement

    Find out how your 401(k) works after you retire, including when you are required to begin taking distributions and the tax impact of your withdrawals.
  8. Retirement

    Are Fees Depleting Your Retirement Savings?  

    Each retirement account will have a fee associated with it. The key is to lower these fees as much as possible to maximize your return.
  9. Retirement

    Retirement Tips for Doctors

    Learn five tips that can help physicians get back on schedule in terms of making financial preparations they need to retire.
  10. Investing Basics

    Do You Need More Than One Financial Advisor?

    Using more than one financial advisor for money management has its pros and cons.
  1. What are some good free online calculators for AGI (adjusted gross income)?

    Both and offer free online calculators for figuring adjusted gross income, or AGI. Calculations ... Read Full Answer >>
  2. What is the Education Savings Bond Program?

    An education savings bond program allows qualified taxpayers to exempt all or a portion of interest earned upon redemption ... Read Full Answer >>
  3. What are the rules and restrictions on a Spousal IRA?

    Formerly called a homemaker individual retirement account (IRA) and renamed to Kay Bailey Hutchison IRA, in 2012, after the ... Read Full Answer >>
  4. Is the interest on my student loan tax deductible on my federal income taxes?

    Interest paid on higher education loans is tax deductible through the adjustments to income section of Internal Revenue Service ... Read Full Answer >>
  5. How are IRA withdrawals taxed?

    The way in which IRA withdrawals are taxed depends on the type of IRA. In a Roth IRA, there is no tax due at withdrawal on ... Read Full Answer >>
  6. Is a Roth IRA a qualified retirement plan?

    Yes, a Roth IRA is a qualified retirement plan. The IRS has very stringent requirements that qualified retirement plans must ... Read Full Answer >>
  7. Who can contribute to a Roth IRA?

    Anyone who has taxable income can contribute to a Roth IRA, as long as he or she meets certain requirements concerning filing ... Read Full Answer >>
  8. What are the Roth IRA limits for 2014?

    There are both contribution limits and income limits for Roth IRAs set by the Internal Revenue Service (IRS). The 2014 limit ... Read Full Answer >>
  9. What are the disadvantages of a Roth IRA?

    A Roth IRA comes with many advantages, but few of these benefit higher-income investors. The IRS limits your contributions ... Read Full Answer >>
  10. Earnings within a Roth IRA are tax free, so are these earnings included in the modified ...

    There are two possible answers to this question, depending on whether or not the distribution from the Roth IRA is qualified. Earnings ... Read Full Answer >>
  11. Can I deduct my Individual Retirement Account (IRA) contribution on my tax return?

    Whether you can deduct IRA contributions on your tax return depends on the type of IRA you have, your participation in an ... Read Full Answer >>
  12. I deducted my IRA contribution on my tax return but failed to transfer the funds. ...

    If an IRA contribution was deducted on a tax return, but the contribution was never made to the IRA by the taxpayer's tax ... Read Full Answer >>
  13. How do I get credit for my retirement plan contributions?

    There is an added incentive for adding to your retirement nest egg, if your income falls within certain limits. Under this ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  2. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  3. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
  4. Black Monday

    October 19, 1987, when the Dow Jones Industrial Average (DJIA) lost almost 22% in a single day. That event marked the beginning ...
  5. Monetary Policy

    Monetary policy is the actions of a central bank, currency board or other regulatory committee that determine the size and ...
  6. Indemnity

    Indemnity is compensation for damages or loss. Indemnity in the legal sense may also refer to an exemption from liability ...
Trading Center