AGI explained
What is adjusted gross income and why it matters
Adjusted gross income (AGI) is the total of all your income sources — wages, self-employment profit, interest, dividends, capital gains, rental income — minus a specific set of "above-the-line" deductions. It is the most important single number on your tax return because it gates nearly every credit, deduction and contribution limit in the code.
Above-the-line deductions that reduce AGI
Unlike itemized deductions (which only reduce taxable income), above-the-line deductions reduce AGI itself, which can unlock credits and contribution rights you would otherwise lose. Key above-the-line deductions include:
- Traditional IRA contributions (deductible if eligible)
- Student loan interest (up to $2,500)
- HSA contributions (through payroll or direct)
- Half of self-employment tax
- Educator expenses (up to $300)
- Alimony paid (pre-2019 divorces only)
Where AGI limits kick in
The Child Tax Credit phases out above $200,000 AGI (single) / $400,000 (MFJ). Roth IRA contribution eligibility phases out between $155,000-$170,000 MAGI for single filers. The student loan interest deduction phases out above $80,000-$95,000 AGI (single). Knowing your AGI helps you plan contributions and deductions to stay below these thresholds.
Questions
AGI calculator FAQ
What is adjusted gross income (AGI)?
AGI is your total gross income minus specific above-the-line deductions. It includes wages, self-employment income, interest, dividends, capital gains and other income. Above-the-line deductions include traditional IRA contributions, student loan interest, HSA contributions and half of self-employment tax. AGI appears on line 11 of Form 1040.
Why does AGI matter?
AGI is the gateway number for nearly everything in the tax code. It determines your eligibility for the Child Tax Credit, Earned Income Credit, education credits, IRA contribution deductibility, and whether you can contribute to a Roth IRA. Many state tax returns also start from federal AGI.
What are above-the-line deductions?
Above-the-line deductions reduce your income before you reach AGI, and you can claim them whether or not you itemize. Common ones include traditional IRA contributions, student loan interest (up to $2,500), HSA contributions, educator expenses (up to $300), and the deductible half of self-employment tax.
Is AGI the same as taxable income?
No. Taxable income is AGI minus either the standard deduction or itemized deductions. For a single filer in 2026, taxable income equals AGI minus $16,100 (standard deduction). AGI is always higher than taxable income because the standard deduction has not been subtracted yet.
How is AGI different from MAGI?
Modified Adjusted Gross Income (MAGI) adds certain deductions back to AGI for specific eligibility tests. For Roth IRA eligibility, MAGI adds back traditional IRA deductions and student loan interest. For the Net Investment Income Tax, MAGI is the same as AGI. Each program defines MAGI slightly differently.
Where do I find my AGI from last year?
Your prior-year AGI is on line 11 of your Form 1040. You need it to e-file your current-year return (the IRS uses it as an identity verification). You can also find it in your IRS online account or by requesting a tax transcript.
- Sources: IRS Rev. Proc. 2025-32 (2026 brackets, standard deductions) · IRC Section 62 (above-the-line deductions) · IRS Form 1040 instructions.
- 🔄 Last updated July 2026 · Tax year 2026
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