What does agi mean on your taxes

How much you’re allowed to contribute depends on your filing status, income and whether you’re covered by a retirement plan at work. To learn more, speak to your tax advisor or look to the IRS for more information on contribution limits for tax years 2021 and 2022.

MAGI For Education Tax Credits

There are two education credits that taxpayers might be eligible for.

American Opportunity Tax Credit (AOTC)

The American Opportunity Tax Credit (AOTC) is a credit for qualified education expenses paid for an eligible student for the first four years of higher education. A taxpayer can get a maximum annual credit of $2,500 per eligible student. If the credit brings the amount of tax you owe to zero, you can have 40 percent of any remaining amount of the credit (up to $1,000) refunded to you.

The amount of the credit is 100 percent of the first $2,000 of qualified education expenses you paid for each eligible student and 25 percent of the next $2,000 of qualified education expenses you paid for that student.

To claim the full credit, your modified adjusted gross income (MAGI) must be $80,000 or less ($160,000 or less for married filing jointly).

Lifetime Learning Credit

There is a credit available for students pursuing undergraduate, graduate or professional degrees or skills needed to advance your career. You can get a credit for up to $2000 of qualified educational expenses, with no cap, if you meet the requirements.

You can’t claim the credit if your MAGI is $69,000 or more ($138,000 or more if you file a joint return).

How Can I Lower My AGI?

The best way to lower your taxes by lowering your AGI is to sock money away in a retirement or health savings plan. Maxing out your contributions will lower your taxes year in, year out. More importantly, you’re not spending new money to save on taxes – you’re simply saving for your retirement.

Money added to a traditional IRA, Simple IRA, or SEP-IRA is taken out of your gross income prior to tax, and the same goes for money contributed to a health savings account (HSA). Not only can this strategy help lower your AGI, but it’s also just good practice to put more of your income toward health expenses and retirement.

Your total (or “gross”) income for the tax year, minus certain adjustments you’re allowed to take. Adjustments include deductions for conventional IRA contributions, student loan interest, and more. Adjusted gross income appears on IRS Form 1040, line 11.

To report expected income on your Marketplace health insurance application, you can start with your most recent year's adjusted gross income and update it based on income and household changes you expect for the coverage year.

The Marketplace uses a different figure, called

, to determine eligibility for savings. MAGI is not a line on your tax return.

Related content

• See the most recent official IRS rules on using income adjustments to determine your AGI
• See how to estimate income for your Marketplace application
• Find out if you'll save on Marketplace health coverage

September 1, 2022 |3 min read

September 1, 2022 |3 min read

If you’ve already filed your taxes this year, you may have come across your adjusted gross income (AGI) on your tax forms. Or you may be wondering what AGI is and how it relates to your finances. AGI is an important factor when it comes to tax returns and how the IRS determines taxable income.

In general, AGI can be found by subtracting specific adjustments to income—such as certain student loan interest or alimony payments—from gross income. If you use a tax preparer or tax software, they may be able to help you calculate your AGI—or do it for you.

Key Takeaways

• AGI can be found by subtracting specific adjustments from gross income.
• AGI is used to determine taxable income, tax rate, and how many deductions and credits a filer can claim.
• Gross income includes income like take-home pay and capital gains.
• For the majority of taxpayers, modified adjusted gross income (MAGI) is their AGI before student loan interest is deducted.
• Ensuring your AGI is correct could help make sure you get the tax refund you may be entitled to.

The Purpose of Adjusted Gross Income

AGI helps the IRS determine how much income tax people are required to pay each year, as well as their tax rate and how many deductions and credits they can claim during tax season. 

Typically the more deductions and credits a person has, the lower their taxable income and tax liability will be. And that can mean a lower tax payment or higher tax refund.

What Is Modified Adjusted Gross Income?

According to the IRS, MAGI is for the majority of taxpayers their AGI before student loan interest is deducted. MAGI helps determine eligibility for things like Medicaid, premium tax credits, savings on marketplace health insurance plans, and the Children’s Health Insurance Program.

Adjusted Gross Income FAQs

Can I Find My AGI on My W-2? 

You can’t find your AGI on your W-2 form, but your W-2 is a starting point for calculating it. There’s a box at the top of your W-2 that lists your wages, tips and other compensation. That’s your unadjusted gross income for that job. 

How Do I Find My AGI From Last Year?

To find your AGI from the previous year, you have a few options:

• Look for it on your tax return.
• Call the IRS directly at 800-908-9946 to request a mailed copy of your tax records.
• Fill out Form 4506-T to request tax return information. 
• Fill out Form 4506 to request a copy of your tax return.
• Go directly to the IRS website and use the Get Transcript Online tool, which will allow you to view your AGI from the previous year. 
• If you use a tax preparation service, the preparer may be able to assist you with retrieving your AGI from the previous year.

How Do I Find My AGI on My Tax Return?

Your AGI can be found on line 11 of IRS Form 1040 and in your additional income and adjustments to income on Schedule 1 Form 1040.

Adjusted Gross Income in a Nutshell

Understanding AGI and how it applies to taxes can help you be a step ahead during tax season. Remember that AGI determines taxable income, tax rate, and how many deductions and credits a person can claim.

You can learn more about taxable income. And as tax time approaches, be sure you know how to identify and avoid tax scams to keep yourself protected.

This document is not tax advice. Each individual's tax circumstances are unique. If you have questions about your specific tax situation, please consult a CPA or tax adviser.

We hope you found this helpful. Our content is not intended to provide legal, investment or financial advice or to indicate that a particular Capital One product or service is available or right for you. For specific advice about your unique circumstances, consider talking with a qualified professional.

Capital One does not provide, endorse or guarantee any third-party product, service, information, or recommendation listed above. The third parties listed are solely responsible for their products and services, and all trademarks listed are the property of their respective owners.

How do I figure out what my AGI is?

Where can I find my AGI from last year?