How to Calculate My Adjusted Gross Income

Adjusted Gross Income (AGI) Calculator

Enter your income sources and eligible deductions below to calculate your Adjusted Gross Income (AGI).

Income Sources

Wages, Salaries, and Tips:

Taxable Interest Income:

Ordinary Dividends:

Net Business Income (Schedule C):

Net Rental/Royalty Income (Schedule E):

Other Taxable Income (e.g., unemployment, gambling winnings):

Above-the-Line Deductions

Educator Expenses:

HSA Deduction:

Self-Employment Tax Deduction (Half):

Student Loan Interest Paid:

Deductible IRA Contributions:

Alimony Paid (Pre-2019 Agreements):

Your Adjusted Gross Income (AGI):

Understanding Your Adjusted Gross Income (AGI)

Adjusted Gross Income (AGI) is a crucial figure on your tax return that plays a significant role in determining your tax liability and eligibility for various tax credits and deductions. It's essentially your gross income minus specific "above-the-line" deductions.

What is Gross Income?

Before we get to AGI, let's define gross income. Gross income is the total of all your taxable income from all sources before any deductions. This can include:

Wages, salaries, and tips
Taxable interest and dividends
Capital gains
Business income (from Schedule C)
Rental and royalty income (from Schedule E)
Alimony received (for divorce agreements executed before 2019)
Retirement distributions (pensions, annuities, IRAs)
Unemployment compensation
Gambling winnings
Farm income

It's important to note that some income, like certain tax-exempt interest or qualified distributions from a Roth IRA, may not be included in gross income.

What are "Above-the-Line" Deductions?

These are specific deductions that you can subtract from your gross income to arrive at your AGI. They are called "above-the-line" because they appear on the first page of Form 1040, above the line where AGI is calculated. Unlike itemized deductions (which are "below-the-line" and require you to choose between them and the standard deduction), above-the-line deductions reduce your AGI regardless of whether you itemize or take the standard deduction.

Common above-the-line deductions include:

Educator Expenses: Up to a certain amount for eligible educators.
Health Savings Account (HSA) Deduction: Contributions made to an HSA.
Self-Employment Tax Deduction: Half of the self-employment taxes paid.
Penalty for Early Withdrawal of Savings: If you paid a penalty for withdrawing funds early from a CD or similar account.
Alimony Paid: For divorce or separation agreements executed before 2019.
IRA Contributions: Deductible contributions to a traditional IRA.
Student Loan Interest Deduction: Up to a certain amount of interest paid on qualified student loans.
Self-Employed Health Insurance Premiums: Premiums paid for health insurance if you're self-employed.
Self-Employed SEP, SIMPLE, and Qualified Plans: Contributions to these retirement plans if you're self-employed.

Why is AGI So Important?

Your AGI is more than just a number; it's a foundational figure that impacts many aspects of your tax situation:

Eligibility for Tax Credits: Many valuable tax credits, such as the Child Tax Credit, Earned Income Tax Credit, and education credits, have AGI phase-out limits. If your AGI is too high, you might receive a reduced credit or no credit at all.
Deductibility of Itemized Deductions: Certain itemized deductions, like medical expenses, are only deductible if they exceed a percentage of your AGI. A lower AGI makes it easier to meet these thresholds.
Deductibility of Traditional IRA Contributions: Whether your traditional IRA contributions are deductible can depend on your AGI and whether you or your spouse are covered by a retirement plan at work.
Net Investment Income Tax (NIIT): High-income taxpayers may be subject to the NIIT, which is triggered when AGI exceeds certain thresholds.
Medicare Premiums: Higher AGI can lead to higher Medicare Part B and Part D premiums (Income-Related Monthly Adjustment Amount – IRMAA).
Affordable Care Act (ACA) Subsidies: Eligibility for premium tax credits to help pay for health insurance purchased through the marketplace is based on AGI.

How to Use the AGI Calculator

Our Adjusted Gross Income (AGI) Calculator simplifies the process of estimating your AGI. Simply follow these steps:

Enter Your Income Sources: Input the total amounts for your wages, salaries, tips, taxable interest, dividends, net business income, net rental/royalty income, and any other taxable income. If you have a loss in business or rental income, enter it as a negative number.
Enter Your Above-the-Line Deductions: Input the amounts for any eligible deductions you plan to take, such as educator expenses, HSA contributions, half of your self-employment tax, student loan interest, deductible IRA contributions, or alimony paid (for pre-2019 agreements).
Click "Calculate AGI": The calculator will instantly display your estimated Adjusted Gross Income.

This calculator provides an estimate based on the common income and deduction categories. For a precise calculation, always refer to IRS forms and publications or consult with a qualified tax professional.

Example Calculation:

Let's consider Jane, a single taxpayer:

Wages: $70,000
Taxable Interest: $500
Ordinary Dividends: $200
Net Business Income (side hustle): $5,000
Educator Expenses: $250
HSA Deduction: $3,000
Student Loan Interest Paid: $1,200
Deductible IRA Contributions: $6,000

Gross Income: $70,000 + $500 + $200 + $5,000 = $75,700

Total Above-the-Line Deductions: $250 + $3,000 + $1,200 + $6,000 = $10,450

Adjusted Gross Income (AGI): $75,700 – $10,450 = $65,250

Using the calculator with these figures would yield an AGI of $65,250. This AGI would then be used to determine Jane's eligibility for various tax benefits and her overall tax liability.

Understanding and accurately calculating your AGI is a fundamental step in effective tax planning. Use this calculator as a helpful tool, but always verify with official tax resources.