Adjusted Gross Income (AGI)

Tax Planning
Updated Apr 2026

Total income minus above-the-line deductions, used to determine tax liability and eligibility for credits.

Tax laws change annually and vary by country. The information on this page is for educational purposes only. Always verify figures with current official sources (IRS, HMRC, CRA, ATO) and consult a qualified tax professional before making any tax-related decision.

What is AGI?

Adjusted gross income (AGI) is your total gross income minus specific above-the-line deductions allowed by the IRS, such as contributions to a traditional IRA, student loan interest, and self-employment tax. AGI appears at the bottom of the first page of Form 1040 and is a critical figure because it determines eligibility for many tax credits, deductions, and retirement account contributions. A lower AGI generally reduces your tax burden and opens access to more tax benefits.

Example

Example

A taxpayer earns $80,000 in wages, contributes $3,000 to a traditional IRA, and pays $1,200 in student loan interest. Their AGI is $80,000 − $3,000 − $1,200 = $75,800. This figure then determines whether they qualify for the earned income tax credit and how much of their IRA contribution is deductible.

Source: IRS Publication 17 — Your Federal Income Tax

Sources
  1. IRS — Publication 17
  2. Investopedia — Adjusted Gross Income