Adjusted Gross Income (AGI): What Does It Mean?

Adjusted gross income (AGI) is your total gross income for the year minus certain adjustments, like traditional IRA contributions, student loan interest, and half of self-employment tax. Those adjustments are often called above-the-line deductions. AGI appears on your Form 1040 and is the starting point for calculating your taxable income. It also determines whether you qualify for many deductions and credits, since lots of tax benefits phase out as AGI rises. Some programs use a related number called modified adjusted gross income (MAGI), which adds certain items back in.