AGI determines your eligibility for many credits and deductions – from the child tax credit to IRA deductions and medical expense deductions. Lowering AGI with pre-tax contributions can save more than just income tax.
How to use the Adjusted Gross Income
- Salary, wages and tips
- Business / self-employment income
- Interest, dividends and royalties
- Capital gains and losses
- Pension, annuity and IRA distributions
- Other income (unemployment, alimony before 2019, gambling)
- Deductible IRA contributions
- Student loan interest (max $2,500)
- Educator expenses (max $300)
- HSA contributions
- Self-employed health insurance
- Deductible part of self-employment tax
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter each type of income and each adjustment to income for the year.
Tips
- Tax figures here are estimates for planning – your actual tax depends on credits, deductions and local rules.
- Check the tax year and filing status before you rely on a result.
- Use gross (before-tax) figures unless a field asks for take-home pay.
- When in doubt, confirm with the tax authority’s own calculator or a tax professional.
Common mistakes to avoid
- Confusing marginal and effective tax rates.
- Adding sales tax to a price that already includes it.
- Forgetting payroll taxes (Social Security and Medicare) on wages.
Inputs explained
| Field | What to enter |
|---|---|
| Salary, wages and tips | Amount in your currency |
| Business / self-employment income | Amount in your currency |
| Interest, dividends and royalties | Amount in your currency |
| Capital gains and losses | Amount in your currency |
| Pension, annuity and IRA distributions | Amount in your currency |
| Other income (unemployment, alimony before 2019, gambling) | Amount in your currency |
| Deductible IRA contributions | Amount in your currency |
| Student loan interest (max $2,500) | Amount in your currency |
| Educator expenses (max $300) | Amount in your currency |
| HSA contributions | Amount in your currency |
| Self-employed health insurance | Amount in your currency |
| Deductible part of self-employment tax | Amount in your currency |
What each result means
- Gross income = [Salary, wages and tips] + [Business ÷ self-employment income] + [Interest, dividends and royalties] + max([Capital gains and losses], -3000) + [Pension, annuity and IRA distributions] + [Other income (unemployment, alimony before 2019, gambling)]
- Total adjustments to income = [Deductible IRA contributions] + min([Student loan interest (max $2,500)], 2500) + min([Educator expenses (max $300)], 300) + [HSA contributions] + [Self-employed health insurance] + [Deductible part of self-employment tax]
- Adjusted gross income (AGI) = [Gross income] – [Total adjustments to income]
Example values
How the main result changes when Salary, wages and tips changes and everything else stays at the example values above:
| Salary, wages and tips | Adjusted gross income (AGI) |
|---|---|
| 36,000 | 40,235 |
| 54,000 | 58,235 |
| 72,000 | 76,235 |
| 90,000 | 94,235 |
| 108,000 | 112,235 |
| 144,000 | 148,235 |
Formula
Gross income = wages + business income + interest + dividends + capital gains + retirement income + other incomeAGI = gross income − adjustments (IRA, HSA, student loan interest, half of self-employment tax, educator expenses, SE health insurance)Worked example
Inputs — Salary, wages and tips: $72,000; Business / self-employment income: $8,000; Interest, dividends and royalties: $1,500; Capital gains and losses: $2,500; Pension, annuity and IRA distributions: $0; Other income (unemployment, alimony before 2019, gambling): $0; Deductible IRA contributions: $4,000; Student loan interest (max $2,500): $1,200; Educator expenses (max $300): $0; HSA contributions: $2,000; Self-employed health insurance: $0; Deductible part of self-employment tax: $565.
Results — Gross income = $84,000.00; Total adjustments to income = $7,765.00; Adjusted gross income (AGI) = $76,235.00.
Frequently asked questions
What is AGI?
Gross income minus above-the-line adjustments – line 11 of Form 1040.
Is AGI the same as taxable income?
No – taxable income is AGI minus the standard or itemized deduction.
How can I lower my AGI?
Contribute to a traditional 401(k), IRA or HSA.
What formula does the Adjusted Gross Income use?
Gross income = wages + business income + interest + dividends + capital gains + retirement income + other income.