While millions of Americans file their tax returns with the IRS, they’re faced with terminology they may not understand, like AGI.
This is especially true for first time taxpayers.
One of the more common tax-related terms is AGI, or your adjusted gross income.
This can be located on your W-2 from your employer.
Adjusted gross income (AGI) explained
This can be figured out mathematically.
Add together the following items to find your gross income
- Capital gains
- Business income
- Retirement distributions
- Any other income
After you have your entire gross income figured out, you’ll subtract adjustments to income.
Adjustments to income can be
- Educator expenses
- Student loan interest
- Alimony payments
- Contributions to a retirement accounts
Your AGI is not going to be higher than your gross income.
Where can I find my AGI?
On your W-2, you’ll only find your unadjusted gross income from that job.
The form has different boxes with withheld amounts.
You can subtract the amounts in the boxes to find your AGI.
Your Tax return copy or IRS transcript can have your AGI.
You may also use an AGI calculator to help you figure out your return.
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