Tax Concepts

Adjusted Gross Income

Adjusted gross income, or AGI, is your gross income minus certain above-the-line adjustments allowed by tax law.

Quick answer

Adjusted gross income, or AGI, is your gross income minus certain above-the-line adjustments allowed by tax law.

It matters because many deductions, credits, and tax thresholds are based on AGI rather than gross income alone.

Retirement contributions or student loan interest may reduce AGI before other calculations happen.

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Plain-English Definition

What Adjusted Gross Income means

Adjusted gross income, or AGI, is your gross income minus certain above-the-line adjustments allowed by tax law.

Why it matters It matters because many deductions, credits, and tax thresholds are based on AGI rather than gross income alone.
Simple example Retirement contributions or student loan interest may reduce AGI before other calculations happen.
Related Questions

Questions people ask about Adjusted Gross Income

What does Adjusted Gross Income mean?

Adjusted gross income, or AGI, is your gross income minus certain above-the-line adjustments allowed by tax law.

Why does Adjusted Gross Income matter?

It matters because many deductions, credits, and tax thresholds are based on AGI rather than gross income alone.

What is a simple example of Adjusted Gross Income?

Retirement contributions or student loan interest may reduce AGI before other calculations happen.

When should I ask a CPA about Adjusted Gross Income?

Ask a CPA when the term affects your tax bill, estimated payments, deductions, or a planning move before year end.

How is Adjusted Gross Income different from Taxable Income?

Adjusted Gross Income means Adjusted gross income, or AGI, is your gross income minus certain above-the-line adjustments allowed by tax law. Taxable Income means Taxable income is the portion of income that remains after allowed deductions and adjustments have been applied. The difference is that they apply to different tax, accounting, or business situations and should not be treated as interchangeable.

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