AGI – Adjusted Gross income is a calculation used to determine the taxable income of an individual.
Adjusted Gross Income is an individual’s total gross income after the deduction of allowable expenses.
These allowable expenses are those that are claimable on the federal income tax returns according to IRS.
The allowable deductions used to derive Agi are ALL above the line. It means that they are deducted prior to tax exemptions for military service, dependent status, etc.
AGI is also used for calculating MAGI – Modified Adjusted Gross Income. To know more about MAGI click on the link below:
MAGI – Modified Adjusted Gross Income
The simple formula to calculate AGI is as follows:
Gross Income(GI) – Allowable Deductions = AGI
To download AGI Calculator Excel Template, click on the link below:
Adjusted Gross Income Calculator
Gross income is the total of your income from any of below-mentioned sources:
Allowable expenses may include any of the following:
You can find the list of these allowable deductions in Federal Tax Returns form 1040 at the end of the first page.
See Image below for reference:
Hence you can derive your AGI with the above formula.
Usually, an individual pays more attention to taxable income while preparing your tax returns.
It is also necessary for an individual to pay attention to AGI – Adjusted Gross Income, because:
You can download excel templates like Traditional IRA Calculator, Roth IRA Calculator and Income Statement Projection in Excel for easy calculations.
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