1. What is Adjusted Gross Income (AGI)?

Adjusted Gross Income (AGI) is your total gross income minus specific deductions. It's an important number used to determine your taxable income and eligibility for certain tax credits and deductions.

2. How Does the Calculator Work?

The calculator uses the simple AGI formula:

Where:

• Total Income — All income from various sources including wages, dividends, alimony, capital gains, etc.
• Adjustments — Deductions such as student loan interest, IRA contributions, moving expenses, etc.

3. Importance of AGI Calculation

Details: AGI is used to determine your taxable income, which affects how much tax you owe. It also impacts eligibility for many tax deductions and credits, as well as certain government benefits.

4. Using the Calculator

Tips: Enter your total income for 2025 and all eligible deductions. The calculator will compute your Adjusted Gross Income for tax purposes.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between gross income and AGI?
A: Gross income is all income before any deductions, while AGI is gross income minus specific adjustments.

Q2: What are common adjustments to income?
A: Common adjustments include educator expenses, student loan interest, IRA contributions, and self-employment taxes.

Q3: Why is AGI important?
A: AGI determines eligibility for many tax benefits and is the starting point for calculating taxable income.

Q4: Does AGI include standard deduction?
A: No, the standard deduction is subtracted from AGI to get taxable income.

Q5: How often does AGI calculation change?
A: The IRS may adjust income thresholds and qualifying deductions annually, so always use current year guidelines.