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February 16, 2009

Modified Adjusted Gross Income (MAGI)

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Definition

Modified Adjusted Gross Income (MAGI) is an individual’s adjusted gross income  without taking into account any of the following amounts.

  • IRA deduction.
  • Student loan interest deduction.
  • Tuition and fees deduction.
  • Domestic production activities deduction.
  • Foreign earned income exclusion.
  • Foreign housing exclusion or deduction.
  • Exclusion of qualified savings bond interest shown on Form 8815.
  • Exclusion of employer-provided adoption benefits shown on Form 8839.

Referring Cite

IRC § 219(g), IRC § 408(a), IRC § 408A, IRC § 530.

Additional Helpful Information

  • MAGI is used to determine the following:
    • An active participant’s eligibility for deducting a contribution to a Traditional IRA
    • Eligibility for making a contribution to a Roth IRA
    • Eligibility for contributing to a Coverdell Education Savings Account (CESA)
    • Eligibility to convert to a Roth IRA . Taxable distributions are not included in the recipient’s MAGI for purposes of determining eligibility for a Roth IRA conversion ( Note: This rule no longer applies as of January 1, 2010, as the $100,000 MAGI income that applied to Roth IRA conversion was repealed as of January 1, 2010)

Please see IRS Publication 590-A and B for Worksheets and step-by-step instructions on how to compute your MAGI , as well as other IRA information. http://www.irs.gov and search for 590

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