2020 tax tables 1040 nr1/14/2024 ![]() ![]() ![]() Your Modified Adjusted Gross Income determines your eligibility for certain deductions, credits and retirement plans. Modified Adjusted Gross Income (MAGI) – This is your AGI plus a few adjustments added back in.Note, with changes from the Tax Cut and Jobs Act, personal and dependent exemptions, which may have lowered your taxable income, were eliminated from 2018 through 2025. Your taxable income is what you’ll use to determine your tax bracket. Taxable Income – This is your AGI minus either the standard deduction or total of itemized deductions-whichever is greater and the qualified business income deduction if applicable.Wages, tips, interest, dividends, rents and pension income are examples of sources that contribute to your gross income. Gross income is reduced by adjustments and deductions before taxes are calculated. Gross Income – This includes all income received from all sources, and could include money, property, and the value of services received.Understanding a bit more about these terms can help us better understand what Adjusted Gross Income is and what it isn’t. When it comes to talking about income, there are several terms that sound similar, but they have their own definitions and purposes. Let’s face it, tax terminology can get a little confusing. However, we’ve heard this question before as taxpayers ask for help with their taxes. “So, What Is Adjusted Gross Income on Your W-2?” Some common examples of deductions that reduce adjusted gross income include 401(k) contributions, health savings account contributions and educator expenses. ![]() What Is AGI?Īdjusted Gross Income, or AGI, starts with your gross income, and is then reduced by certain “above the line” deductions. Additionally, your Adjusted Gross Income is the starting point for calculating your taxes and determining your eligibility for certain tax credits and deductions that you can use to help you lower your overall tax bill. Adjusted Gross Income is simply your total gross income minus specific deductions. ![]()
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