Adjusted Gross Income Calculator

Adjusted Gross Income (AGI) Calculator

Income Sources

Adjustments to Income (Above-the-Line Deductions)

Your Adjusted Gross Income (AGI) will appear here.

function calculateAGI() { // Income Sources var wagesSalaries = parseFloat(document.getElementById('wagesSalaries').value) || 0; var taxableInterest = parseFloat(document.getElementById('taxableInterest').value) || 0; var ordinaryDividends = parseFloat(document.getElementById('ordinaryDividends').value) || 0; var capitalGains = parseFloat(document.getElementById('capitalGains').value) || 0; var businessIncome = parseFloat(document.getElementById('businessIncome').value) || 0; var rentalRoyalty = parseFloat(document.getElementById('rentalRoyalty').value) || 0; var otherIncome = parseFloat(document.getElementById('otherIncome').value) || 0; // Adjustments to Income (Above-the-Line Deductions) var educatorExpenses = parseFloat(document.getElementById('educatorExpenses').value) || 0; var hsaDeduction = parseFloat(document.getElementById('hsaDeduction').value) || 0; var selfEmploymentTax = parseFloat(document.getElementById('selfEmploymentTax').value) || 0; var selfEmployedHealthInsurance = parseFloat(document.getElementById('selfEmployedHealthInsurance').value) || 0; var studentLoanInterest = parseFloat(document.getElementById('studentLoanInterest').value) || 0; var alimonyPaid = parseFloat(document.getElementById('alimonyPaid').value) || 0; var iraContributions = parseFloat(document.getElementById('iraContributions').value) || 0; // Calculate Total Gross Income var totalGrossIncome = wagesSalaries + taxableInterest + ordinaryDividends + capitalGains + businessIncome + rentalRoyalty + otherIncome; // Calculate Total Adjustments var totalAdjustments = educatorExpenses + hsaDeduction + selfEmploymentTax + selfEmployedHealthInsurance + studentLoanInterest + alimonyPaid + iraContributions; // Calculate Adjusted Gross Income (AGI) var agi = totalGrossIncome – totalAdjustments; // Ensure AGI is not negative (though highly unlikely with these inputs, good practice) if (agi < 0) { agi = 0; } // Display the result document.getElementById('agiResult').innerHTML = 'Your Adjusted Gross Income (AGI): $' + agi.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + ''; }

Understanding Your Adjusted Gross Income (AGI)

Your Adjusted Gross Income (AGI) is a crucial figure on your tax return. It's calculated by taking your gross income and subtracting certain "above-the-line" deductions. AGI is more than just a number; it's a foundational figure that impacts many aspects of your financial life, from determining your eligibility for various tax credits and deductions to qualifying for certain government benefits and even student financial aid.

What is Gross Income?

Gross income is your total income from all taxable sources before any deductions. This typically includes:

• Wages, Salaries, and Tips: Income reported on a W-2 form.
• Taxable Interest Income: Interest earned from savings accounts, bonds, etc.
• Ordinary Dividends: Income from stock ownership.
• Capital Gains: Profits from selling assets like stocks or real estate.
• Business Income: Net profit from a self-owned business (Schedule C).
• Rental and Royalty Income: Net income from properties or intellectual property.
• Other Taxable Income: This can include unemployment compensation, gambling winnings, taxable refunds, and for divorces finalized before 2019, alimony received.

What are "Above-the-Line" Deductions (Adjustments to Income)?

These are specific deductions that you can take to reduce your gross income, even if you don't itemize your deductions. They are subtracted directly from your gross income to arrive at your AGI. Common adjustments include:

• Educator Expenses: Up to a certain amount for unreimbursed expenses paid by eligible educators.
• Health Savings Account (HSA) Deduction: Contributions made to an HSA.
• Deductible Part of Self-Employment Tax: Half of the self-employment tax paid.
• Self-Employed Health Insurance Premiums: Premiums paid for health insurance if you are self-employed.
• Student Loan Interest Deduction: Interest paid on qualified student loans, up to a certain limit.
• Alimony Paid: For divorce or separation agreements executed before 2019.
• Deductible IRA Contributions: Contributions to a traditional IRA, subject to income and other limitations.

Why is AGI Important?

Your AGI is a critical number because it serves as the basis for calculating many other tax-related items. It can:

• Determine Eligibility for Tax Credits: Many credits, like the Child Tax Credit or Premium Tax Credit, have AGI phase-out limits.
• Limit Itemized Deductions: Some itemized deductions are limited based on a percentage of your AGI (e.g., medical expenses).
• Impact Retirement Contributions: Your ability to contribute to certain retirement accounts (like Roth IRAs) or deduct traditional IRA contributions can be limited by your AGI.
• Affect Investment Income Tax: The tax rate on capital gains and qualified dividends can depend on your AGI.
• Influence Student Financial Aid: AGI is a key component in calculating your Expected Family Contribution (EFC) for federal student aid.

Example Calculation:

Let's consider a hypothetical individual, Alex, to illustrate how AGI is calculated:

• Wages: $70,000
• Taxable Interest: $500
• Business Income (Net): $10,000
• Deductible IRA Contributions: $6,000
• Student Loan Interest Paid: $1,500

1. Calculate Gross Income:
$70,000 (Wages) + $500 (Interest) + $10,000 (Business Income) = $80,500

2. Calculate Total Adjustments:
$6,000 (IRA Contributions) + $1,500 (Student Loan Interest) = $7,500

3. Calculate Adjusted Gross Income (AGI):
$80,500 (Gross Income) – $7,500 (Adjustments) = $73,000

Alex's AGI would be $73,000. This figure would then be used to determine other aspects of Alex's tax liability.

Use the calculator above to quickly estimate your own Adjusted Gross Income based on your specific financial situation.