Adjusted Gross Income (AGI)
Your total income minus specific deductions; a key figure that drives eligibility for many tax benefits.
Adjusted gross income is your gross income (wages, interest, dividends, capital gains, retirement distributions, and more) minus certain 'above-the-line' adjustments like deductible retirement contributions and the deductible part of self-employment tax. It sits near the bottom of the first page of your return and feeds almost everything below it.
AGI matters because so many thresholds key off it or off a close cousin, modified AGI (MAGI). Eligibility for Roth contributions, IRA deductions, ACA subsidies, IRMAA tiers, and various credits all reference AGI or MAGI. Managing AGI — through the timing of income and deductions — is therefore central to tax planning.
This definition is general information to help you understand a term, not financial, tax, or legal advice. Figures that change year to year (limits, thresholds, rates) should be confirmed against current official sources. For guidance on your situation, a licensed fee-only fiduciary is the right next step.