adjusted gross income  definition
Adjusted Gross Income. Adjusted Gross Income is defined as gross income minus adjustments to income. We suggest you refer to your 2012 federal income tax return to get a quick estimate of your 2013 AGI. On your 2012 return, please refer to: 1  Line 4 if you filed a Form 1040EZ. 2  Line 21 if you filed a Form 1040A. DEFINITION of 'Adjusted Gross Income-AGI'. A measure of income used to determine how much of your income is taxable. Adjusted gross income (AGI) is calculated as your gross income from taxable sources minus allowable deductions, such as unreimbursed business expenses, medical expenses, alimony and deductible retirement plan contributions. Also referred to as net income.. Next Up. Adjusted gross income often is referred to as  net income , because AGI constitutes the net amount of income that is taxed after all tax payments and credits are factored in. The AGI calculation is relatively straightforward. It is equal to the total income you report that’s subject to income tax—such as earnings from your job, self-employment, alimony income and interest from a bank account—minus specific deductions, or “adjustments” that you’re eligible to take. Adjusted gross income (AGI) is the figure used by the Internal Revenue Service to determine a taxpayer 's eligibility for certain tax benefits. AGI is calculated by adding together all qualified income and subtracting all qualified deductions. It is in the taxpayer 's best interest to get their adjusted gross income as low as possible. Lower AGI qualifies the taxpayer for more tax benefits and ultimately results in a smaller tax bill. To calculate your AGI, you must first determine your gross income. Espanol. Español Adjusted Gross. Income Adjusted Gross income is defined as gross income minus adjustments to. Income we suggest you refer to your 2012 federal income tax return to get a quick estimate of your 2013. Agi on your 2012, return please refer: 1  To line 4 if you filed A FORM. 2  1040ez line 21 if you filed A FORM.  1040a OVERVIEW. Adjusted gross income (AGI) can directly impact the deductions and credits you are eligible for, which can wind up reducing the amount of taxable income you report on your tax return. When preparing your tax return, you probably pay more attention to your taxable income than your adjusted gross income (AGI). Adjusted gross income, or AGI, is often referred to as net income, although the two are not necessarily the same thing. Adjustments to income are specific deductions that directly reduce your total income to arrive at your AGI. The types of adjustments that you can deduct are subject to change each year, but a number of them consistently show up on tax returns year after year.
It is often referred to as net income, although the two are not necessarily the same thing.