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.
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