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February 17, 2009

Adjusted Gross Income

Your Guide

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Definition

Adjusted gross income (AGI) is the amount that is properly reflected on the last line of page 1 of IRS Form 1040 or 1040A. The line number is different for Form 1040EZ.  In the case of an individual, AGI is gross income minus the following deductions:

  • Trade and business deductions
  • Certain trade and business deductions of employees
  • Reimbursed expenses of employees
  • Certain expenses of performing artists
  • Certain expenses of officials
  • Certain expenses of elementary and secondary school teachers
  • Certain expenses of members of reserve components of the Armed Forces of the United States
  • Losses from sale or exchange of property
  • Deductions attributable to rents and royalties
  • Certain deductions of life tenants and income beneficiaries of property
  • Pension, profit-sharing, and annuity plans of self-employed individuals
  • Retirement savings
  • Penalties forfeited because of premature withdrawal of funds from time savings accounts or deposits
  • Alimony
  • Reforestation expenses
  • Certain required repayments of supplemental unemployment compensation benefits
  • Jury duty pay remitted to employer
  • Deduction for clean-fuel vehicles and certain refueling property
  • Moving expenses
  • Archer MSAs
  • Interest on education loans
  • Higher education expenses
  • Costs involving discrimination suits, etc.
  • Health savings accounts

Referring Cite

IRC § 62(a)

Additional Helpful Information

Adjustments are made to AGI to determine modified adjusted gross income (MAGI), which is used to determine an individuals income for purposes of being eligible to deduct Traditional IRA contributions, make Roth IRA contributions and Roth conversions.

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Written By

Denise Appleby

Denise is CEO of Appleby Retirement Consulting Inc., a firm that provides IRA resources for financial/ tax/legal professionals. She has over 20 years of experience in the retirement plans field, which includes training and technical consultation.

Denise writes and publishes educational /marketing tools for advisors; available at http://irapublications.com. Denise co-authored several books on IRAs

Denise is a graduate of The John Marshall Law School, where she obtained a Masters of Jurisprudence in Employee Benefits, and has earned 5 professional retirement designations.
She has appeared on numerous media programs, sharing her insights on retirement tax laws.

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