Identify your qualified income adjustments You must subtract certain adjustments from your AGI, such as retirement deductions, student loan interest, foreign earned income, and savings bond interest, to arrive at your MAGI. Some tax credits and deductions, like the child tax credit and the traditional individual retirement account contribution deduction, are based on your modified adjusted gross income (MAGI), while most are based on your adjusted gross income (AGI). Your ability to correctly apply qualifying tax credits and deductions, which can lower your taxable income, is aided by knowing your AGI. Taxpayers can deduct charitable donations up to 60% of their AGI and any medical expenses that exceed 10% of their AGI Some adjustments are a fixed amount, while others-like the dependent and adoption tax credits-are a percentage of each taxpayer’s AGI. Other things to consider when calculating AGI
How to calculate adjusted gross income (AGI)
