Modified adjusted gross income

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Modified Adjusted Gross Income

In the United States, the amount of income used to determine how much of a taxpayer's IRA contributions are tax deductible. One calculates the modified AGI by taking the adjusted gross income and adding back various deductions, notably interest on student loans, foreign income deductions, foreign housing deductions, and higher education costs. Depending on the modified AGI, some or all of one's IRA contributions will not be deductible.

Modified adjusted gross income (MAGI).

Your modified adjusted gross income (MAGI) is your adjusted gross income (AGI) plus deductions, such as college loan interest and contributions to a deductible individual retirement account (IRA), which you may qualify to take if your MAGI is less than the annual ceilings set by Congress.

Other deductions, such as alimony, don't have income limits.

For example, suppose you're single, have a gross income of $51,000, and you're eligible to take a deduction for your IRA contribution of $4,000. Your AGI, when all deductions are taken, turns out to be $45,500. You then add the $4,000 back to find your MAGI of $49,500. Because your MAGI is less than the ceiling for deducting your full IRA contribution for your filing status, you can take the full deduction.

References in periodicals archive ?
Municipal bonds are still federally tax-exempt, and their earnings are excluded both from MAGI and investment income, allowing your client to avoid paying the 3.
4) The Adoration of the Magi from the Lehman Collection allowed the viewer to examine how Bartolo di Fredi treated the same subject in a very different format, a tall narrow panel (cut down at the top), presumably once flanked by images of standing saints.
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No longer the biblical astrologers who "observed [a] star at its rising," these magi reflect the power structure of 15th-century Europe.
If a client is considering rolling over a regular IRA into a Roth, he or she should attempt to do so before 2013 in order to lessen MAGI after 2012.
Paul Getty Museum, Los Angeles, acquired a drawing of the Adoration of the Magi by Jusepe de Ribera (1591-1652) (Fig.
Makino's MAGI is the latest in the MAG series of five-axis horizontal machining centers designed to handle quick, high precision aluminum production of parts up to 1,500mm.
An extensive author's note details Fletcher's research on the Magi, the star of Bethlehem, and the historical context of the novel.
Two years ago, the General Synod of the Church of England substituted magi for three wise men.
Others may not recognize the tale until they meet the other Magi, Gaspar and Balthazar.