TaxWrenTax glossary · Updated
What is adjusted gross income (AGI)?
Short answer
Your gross income minus the adjustments listed on Schedule 1 of Form 1040, such as deductible IRA and HSA contributions, student loan interest and the deductible part of self-employment tax. It is on line 11 of Form 1040.
Adjusted gross income, or AGI, is the income figure the IRS uses most. It starts from your gross income and subtracts a short list of adjustments, which you can take whether or not you itemize. It is on line 11 of Form 1040.
The formula
AGI = total income − adjustments to income (Schedule 1)
Total income includes wages, tips, business profit, interest, dividends, capital gains, IRA and pension distributions, unemployment and the taxable part of Social Security. The adjustments the IRS lists include:
- Deductible IRA contributions and other retirement contributions (such as SEP and SIMPLE plans for the self-employed)
- Deductible HSA contributions
- Student loan interest
- The deductible part of self-employment tax
- Educator expenses, penalties on early withdrawal of savings, and alimony paid under divorce or separation agreements made before 2019
- Some business expenses of reservists, performing artists and fee-based government officials, and moving expenses for members of the military
Pre-tax 401(k) contributions and employer health insurance never reach total income: they are already left out of box 1 of your W-2.
Worked example (2026)
| Wages (W-2 box 1) | $50,000 |
|---|---|
| Freelance profit (Schedule C) | $20,000 |
| Bank interest | $1,000 |
| Total income | $71,000 |
| − Half of self-employment tax | $1,413 |
| − Student loan interest | $1,500 |
| Adjusted gross income | $68,087 |
| − Standard deduction (single) | $16,100 |
| Taxable income before the QBI deduction | $51,987 |
Self-employment tax from the same engine as our self-employment tax calculator.
Why AGI matters
Many limits are set by AGI or a modified version of it:
- Medical expenses are deductible only above 7.5% of AGI.
- The child tax credit shrinks above $200,000 of modified AGI ($400,000 married filing jointly).
- The senior deduction shrinks above $75,000 ($150,000 joint), and the SALT cap above $505,000.
- The net investment income tax starts at $200,000 ($250,000 joint).
Lowering AGI, for example with a deductible IRA or HSA contribution, can therefore save more than your tax rate on the contribution. To see your own AGI and tax, enter your income in the income tax calculator.
Work it out
Related terms
- Modified adjusted gross income
- Adjusted gross income with certain items added back, such as excluded foreign income or tax-exempt interest. There is no single MAGI: each rule that uses it (the premium tax credit, IRA deduction limits, the net investment income tax) says what to add.
- Taxable income
- The income your tax brackets apply to: adjusted gross income minus the standard deduction (or your itemized deductions) and other deductions such as the qualified business income deduction.
- Above-the-line deduction
- A deduction subtracted from gross income to reach adjusted gross income (an adjustment to income on Schedule 1), so you get it whether or not you itemize. Examples: deductible IRA and HSA contributions, student loan interest, the deductible part of self-employment tax.
Frequently asked questions
What is adjusted gross income?
Your total (gross) income from all sources minus certain adjustments listed on Schedule 1 of Form 1040, such as deductible IRA and HSA contributions, student loan interest, educator expenses and the deductible part of self-employment tax.
How do I calculate my AGI?
Add up all your taxable income (wages, business profit, interest, dividends, gains, retirement income) and subtract your adjustments to income. Example: $50,000 of wages, $20,000 of freelance profit and $1,000 of interest, minus $1,413 (half of self-employment tax) and $1,500 of student loan interest, gives an AGI of $68,087.
Where do I find my AGI?
On line 11 of Form 1040. Your W-2 doesn't show AGI: box 1 shows wages after pre-tax deductions such as 401(k) contributions, which is only one part of the total.
Is AGI the same as taxable income?
No. Taxable income is AGI minus the standard deduction (or itemized deductions) and a few other deductions. In the example above, AGI of $68,087 minus the $16,100 standard deduction leaves $51,987 of taxable income, before the qualified business income deduction.
What is the difference between AGI and MAGI?
Modified AGI is AGI with certain items added back. Each rule that uses MAGI defines it: for the premium tax credit, for example, you add excluded foreign income, nontaxable Social Security benefits and tax-exempt interest.
Sources: IRS, Definition of adjusted gross income; IRS Topic 452, Alimony and separate maintenance. Figures come from our tax data files; see the methodology. All terms: tax glossary.