Save time with our cheat sheets, fact sheets, checklists & books!

February 16, 2009

Modified Adjusted Gross Income (MAGI)

Your Guide

Share on print
Print
Share on facebook
Share on twitter
Share on pinterest
Share on linkedin

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This rule no longer applies as of January 1, 2010, as the $100,000 MAGI income that applied to Roth IRA conversion was repealed as of January 1, 2010)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

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.

Share on facebook
Share on twitter
Share on pinterest
Share on linkedin
Share on print
More

Keep Learning

Excess deferral

Definition Salary deferral contributions, contributions are limited to the lesser of the IRC § 402(g) limit or 100% of compensation. Salary deferral contributions in excess

Deduction

Definition A deduction is a Tax write-off which is allowed for contributions to traditional IRAs or employer sponsored plans. Individuals who are active participants are

Annual Addition Limit

Definition The annual Addition limit is the maximum amount that may be added to a defined contribution plan on behalf of a participant for any

Individual Retirement Arrangement (IRA)

Definition Individual retirement arrangement (IRA) is an umbrella term that covers individual retirement account and individual retirement annuity. These are retirement savings vehicles established by

Be among the first to know when

IRA Rules
Change