Typically, your MAGI (modified adjusted gross income) and AGI (adjusted gross income) are close in value to one another. 

AGI calculation

Your adjusted gross income is all of the income you bring in, less certain adjustments. You can find the allowable reductions to your income on the front page of your Form 1040. Commonly used adjustments include the following:

  • IRA and self-employed retirement plan contributions
  • Alimony payments
  • Self-employed health insurance payments
  • One-half of any self-employment taxes paid

Other adjustments used in calculating AGI include the following:

  • Health savings account deductions
  • Penalties on the early withdrawal of savings
  • Educator expenses
  • Student loan interest
  • Moving expenses
  • Tuition and fees
  • Deductions for domestic production activities
  • Certain business expenses of performing artists, reservists, and fee-basis government officials

MAGI calculation

To calculate your modified adjusted gross income, take your AGI and add back certain deductions. Many of these deductions are rare, so it's possible your AGI and MAGI can be identical. According to the IRS, your MAGI is your AGI with the addition of the following deductions, if applicable:

  • Student loan interest
  • One-half of self-employment tax
  • Qualified tuition expenses
  • Tuition and fees deduction
  • Passive loss or passive income
  • IRA contributions, taxable social security payments
  • The exclusion for income from U.S. savings bonds
  • The exclusion under 137 for adoption expenses
  • Rental losses
  • Any overall loss from a publicly traded partnership


Original article found on TurboTax

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