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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
Let us follow the advice and the way of acting of the Magi in the Gospel.
Example 3: Carol Davis, a single taxpayer who participates in a 401 (k), had MAGI of $220,000 in 2018.
The deduction applies if MAGI does not exceed $65,000 if single or $130,000 if married filing jointly.
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Mae cyrraedd y fferm ym mhen draw Llyn yn brofiad digon brawychus, yn enwedig ar ol yr holl rybuddion a gawsai - "Lle ar y diawl ydi o", yn ol hen wraig a welodd Magi ar y ffordd yno.
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The magi, the Persian priests, interpreted this to mean that his grandsons would threaten his rule.
Magi admitted to having posted the photo but denied having written the incriminating text.