How To Calculate Your Adjusted Gross Income

Your adjusted gross income (AGI) is your total income minus qualifying deductions. The deductions, however, are not “itemized deductions” such as mortgage interest, medical expenses, property taxes, charitable contributions.

To calculate your AGI first add up your gross income which includes:

  • wages or salary
  • dividends
  • capital gains
  • taxable interest
  • IRA and/or pension or annuity distributions
  • alimony
  • unemployment compensation in excess of $2,400
  • business income (or loss)
  • farm income (or loss)
  • rental real estate, royalties, partnerships
  • S corporations
  • trusts
  • taxable Social Security benefits
  • other income

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Then subtract:

  • your qualifying IRA contributions
  • student loan interest
  • qualifying tuition and fees
  • educator expenses
  • health savings account contributions
  • half of self-employment tax
  • any penalty for early withdrawal from savings
  • qualified retirement plans (i.e. IRA, SEP, SIMPLE, etc.)
  • paid alimony
  • qualifying moving expenses

There are also qualifying deductions for domestic production activities, and for certain business expenses of reservists, performing artists, and fee-based government officials. The resulting number is your AGI.

About the author

Ron Haynes has written 1004 articles on The Wisdom Journal.

The founder and editor of The Wisdom Journal in 2007, Ron has worked in banking, distribution, retail, and upper management for companies ranging in size from small startups to multi-billion dollar corporations. He graduated Suma Cum Laude from a top MBA program and currently is a Human Resources and Management consultant, helping companies know how employees will behave in varying situations and what motivates them to action, assisting firms in identifying top talent, and coaching managers and employees on how to better communicate and make the workplace MUCH more enjoyable. If you’d like help in these areas, contact Ron using the contact form at the top of this page or at 870-761-7881.

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