What Is Modified Adjusted Gross Income?

5 min read

Modified Adjusted Gross Income (MAGI) is a calculation of Annual Income used to determine eligibility for certain taxes and credits. It is derived from an individual’s Adjusted Gross Income (AGI) by adding certain income, such as foreign earned income, tax-exempt interest and excluded employer-sponsored retirement plan contributions, and subtracting certain deductions, such as student loan interest payments. Knowing MAGI can help a taxpayer identify which tax breaks for which they may be eligible.