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Categories: General Tax Terms

Adjusted Gross Income (AGI) refers to an individual’s total gross income after specific deductions have been applied. It is a key figure used in U.S. tax calculations, as it determines eligibility for various tax credits and deductions.

AGI includes wages, dividends, capital gains, business income, and retirement distributions, but it excludes certain deductions like contributions to retirement accounts, student loan interest, and tuition fees. For example, if an individual has a gross income of $80,000 and qualifies for $10,000 in deductions, their Adjusted Gross Income (AGI) would be $70,000.

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