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What is Modified Adjusted Gross Income (MAGI)?
By JLP | October 25, 2005
Modified Adjusted Gross Income is used when computing a specific deduction or credit. Basically, it means that something is being added back to Adjusted Gross Income. MAGI is usually calcuated in the following way:
If you use Form 1040:
Take your Adjusted Gross Income on Line 36 and add back in:
- IRA deduction.
- Student loan interest.
- Tuition and fees deduction.
- Foreign earned income exclusion.
- Foreign houseing exclusion or deduction.
- Exclusion of quialified savings bond interest shown on Form 8815 - Exclusion of Interest From Series EE and I U. S. Savings Bonds Issued After 1989 (For Filers With Qualified Higher Education Expenses).
- Exclusion of employer-provided adoption benefits shown of Form 8839 - Qualified Adoption Expenses.
If you use Form 1040A:
Take your Adjusted Gross Income from Line 21 and add back in:
- IRA deduction.
- Student loan interest deduction.
- Tuition and fees deduction.
- Exclusion of quialified savings bond interst shown on Form 8815.
- Exclusion of employer-provided adoption benefits shown of Form 8839.
You will need to know your MAGI for almost all deductions (like IRAs) and credits (like the Child Tax Credit and Education Expense Credits). To learn more about MAGI, you should read Publication 17 from the IRS.
Topics: Taxes |
December 6th, 2006 at 5:08 pm
[...] There is a phaseout on Roth IRA contributions, based on your filing status and modified adjusted gross income (MAGI). The Roth IRA phaseout is: [...]
December 7th, 2006 at 1:19 pm
[...] The phaseout based on your modified adjusted gross income (MAGI) is $150,000 - $160,000 [...]
April 12th, 2007 at 4:30 am
I read that the taxpayer’s MAGI is lowered by excluding Taxable Social Security income received. Is that true?
January 1st, 2008 at 11:05 pm
[...] Hey Peter - Good news - As long as one spouse has at least $8,000 of earned income, and your joint MAGI is under $160,000 (as you’ll reach your phase-out for ROTH in 2007) both spouses can contribute $4,000 ($8,000 total) to their respective Roth IRAs. Each spouse can contribute an additional $1,000 if he or she is age 50 or older by the end of 2007. So tap it out if you can! Thanks for the post! [...]