1. What is Modified Adjusted Gross Income?

Modified Adjusted Gross Income (MAGI) is your Adjusted Gross Income (AGI) plus certain deductions and tax-exempt income. It's used to determine eligibility for various tax benefits, credits, and government programs.

2. How Does the Calculator Work?

The calculator uses the MAGI formula:

Where:

• \( AGI \) — Your Adjusted Gross Income from Form 1040
• \( Adjustments \) — Certain deductions and tax-exempt income that must be added back

Explanation: The calculation adds back certain items to your AGI that were previously deducted or excluded from income.

3. Importance of MAGI Calculation

Details: MAGI is used to determine eligibility for premium tax credits for health insurance, IRA contribution limits, education tax credits, and other tax benefits. Different programs may use slightly different MAGI calculations.

4. Using the Calculator

Tips: Enter your AGI from your tax return and any applicable adjustments (such as tax-exempt interest, excluded foreign income, or non-taxable Social Security benefits). All values must be non-negative.

5. Frequently Asked Questions (FAQ)

Q1: Where can I find my AGI?
A: Your AGI appears on line 11 of Form 1040 (for 2022 tax returns) or line 8b of Form 1040-SR.

Q2: What common items are added back to AGI for MAGI?
A: Common adjustments include tax-exempt interest, excluded foreign income, non-taxable Social Security benefits, and IRA deductions.

Q3: Is MAGI the same for all purposes?
A: No, different programs may have slightly different MAGI calculations. Always check the specific requirements for the program you're applying for.

Q4: Why is MAGI important for health insurance?
A: MAGI determines eligibility for premium tax credits and cost-sharing reductions under the Affordable Care Act.

Q5: Does MAGI include standard or itemized deductions?
A: No, MAGI is calculated before these deductions are applied.