On a federal tax return, AGI stands for adjusted gross income, and it is your total income for the year minus a specific set of adjustments the tax code allows before any deductions. You’ll find it on Line 11 of Form 1040.1Internal Revenue Service. Adjusted Gross Income It’s the number the rest of your return is built around: credits, deduction limits, and certain surtaxes all key off it, so a shift of a few hundred dollars in AGI can change what you owe or get back.
Where AGI Sits on Form 1040
The IRS builds AGI in three lines. Line 9 shows your total income. Line 10 shows adjustments to income, carried over from Schedule 1, Part II. Line 11 is the result: total income minus adjustments, which is your AGI.1Internal Revenue Service. Adjusted Gross Income
AGI is not your taxable income. The standard deduction or itemized deductions still come off after AGI is set, and the qualified business income deduction comes off after that.2Internal Revenue Service. Definition of Adjusted Gross Income AGI is the midpoint number, not the final one.
What Counts as Income
AGI starts with gross income, which the tax code defines broadly as all income from whatever source, unless a specific provision excludes it.3Office of the Law Revision Counsel. 26 U.S. Code 61 – Gross Income Defined For most individual filers, that means:
- Wages, salaries, and tips
- Interest and dividends
- Business income (from a sole proprietorship, partnership, or S corporation)
- Capital gains
- Rental income
- Retirement distributions and annuities
- Unemployment compensation
- Taxable Social Security benefits
- Taxable state tax refunds
If money came in and no exclusion applies, the IRS expects it on your return.
Income That’s Excluded
Some categories are excluded by statute and never touch AGI at all.4Office of the Law Revision Counsel. 26 U.S. Code Subtitle A Chapter 1 Subchapter B Part III – Items Specifically Excluded From Gross Income The common ones:
- Life insurance proceeds paid because of someone’s death
- Gifts and inheritances
- Interest on state and local (municipal) bonds
- Workers’ compensation and certain personal injury settlements
- Qualified scholarships used for tuition and required fees
- Employer health insurance contributions and cafeteria plan benefits
- Gain on selling your home, up to $250,000 (or $500,000 for joint filers) if you meet the ownership and use tests
The edges catch people. Scholarship money spent on room and board is taxable even though scholarship dollars spent on tuition are not. When in doubt, the test is whether a specific statutory exclusion covers what you received. If none does, it’s gross income.
Adjustments That Reduce Gross Income to AGI
Once gross income is totaled, a specific list of deductions comes off before AGI is set. These are the “above-the-line” adjustments on Schedule 1, Part II, and you get them whether you later take the standard deduction or itemize.2Internal Revenue Service. Definition of Adjusted Gross Income That double benefit is why they matter so much.
Traditional IRA Contributions
Contributions to a traditional IRA are deductible, but if you’re covered by a retirement plan at work, the deduction phases out. For 2026, the phase-out runs from $81,000 to $91,000 of modified AGI for single filers, and from $129,000 to $149,000 for joint filers.5Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500 If neither you nor your spouse has a workplace plan, the full deduction is available at any income level.
Health Savings Account Contributions
HSA contributions are deductible above the line if you’re enrolled in a qualifying high-deductible health plan.6Internal Revenue Service. Publication 969 (2025), Health Savings Accounts and Other Tax-Favored Health Plans For 2026, the contribution limit is $4,400 for self-only coverage and $8,750 for family coverage.7Internal Revenue Service. Notice 2026-05, 2026 Inflation-Adjusted Amounts for Health Savings Accounts There’s no income-based phase-out.
Half of Self-Employment Tax
Self-employed workers pay both the employer and employee share of Social Security and Medicare. To match how employees are treated, the code lets you deduct half of your self-employment tax as an adjustment. It’s calculated on Schedule SE and flows to Schedule 1.8Internal Revenue Service. Topic No. 554, Self-Employment Tax
Student Loan Interest
Interest paid on qualified student loans is deductible up to $2,500 per year. For 2026, the deduction starts phasing out at $85,000 of modified AGI for single filers ($175,000 for joint filers) and disappears entirely at $100,000 ($205,000 joint).2Internal Revenue Service. Definition of Adjusted Gross Income
Educator Expenses
Eligible K-12 teachers, counselors, and principals can deduct up to $300 of unreimbursed classroom expenses without itemizing. If both spouses on a joint return qualify as educators, the combined limit is $600.9Internal Revenue Service. Topic No. 458, Educator Expense Deduction
Alimony and Military Moving Expenses
Alimony is deductible as an adjustment only if the divorce or separation agreement was finalized on or before December 31, 2018. For agreements entered after that date, alimony is neither deductible by the payer nor taxable to the recipient.10Internal Revenue Service. Publication 504, Divorced or Separated Individuals
Moving expenses were eliminated as an adjustment for most filers after 2017. Active-duty military members who relocate under a permanent change of station orders can still deduct unreimbursed moving costs.11Internal Revenue Service. Publication 3 (2025), Armed Forces Tax Guide
AGI vs. Modified AGI
Plenty of tax provisions don’t actually test AGI. They test modified adjusted gross income, or MAGI, which starts with AGI and adds specific items back in.12Internal Revenue Service. Modified Adjusted Gross Income The add-backs differ by provision, so there is no single MAGI number.
For Roth IRA eligibility, MAGI is AGI plus your traditional IRA deduction, student loan interest deduction, excluded foreign earned income, and a few other items. For the Premium Tax Credit, MAGI is AGI plus tax-exempt bond interest, excluded foreign income, and nontaxable Social Security benefits.12Internal Revenue Service. Modified Adjusted Gross Income When a rule says MAGI, check which version applies.
For most W-2 employees without foreign income or nontaxable Social Security, the add-backs are zero and MAGI equals AGI.
Why AGI Matters Beyond the Line
AGI (or the version of MAGI a provision uses) controls access to credits, sets the floors on certain deductions, and determines whether some surtaxes apply. A few of the places it hits hardest:
Roth IRA Contributions
Your ability to contribute to a Roth phases out on MAGI. For 2026, single filers phase out between $153,000 and $168,000. Joint filers phase out between $242,000 and $252,000.5Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500
Education Credits
The American Opportunity Tax Credit, worth up to $2,500 per student for the first four years of college, phases out between $80,000 and $90,000 of MAGI for single filers, and between $160,000 and $180,000 for joint filers.13Internal Revenue Service. American Opportunity Tax Credit These thresholds are not inflation-indexed.
Child Tax Credit and EITC
For 2026, the Child Tax Credit is $2,200 per qualifying child, phasing out above $400,000 of AGI for joint filers and $200,000 for everyone else. The refundable portion is capped at $1,700 per child and requires earned income above $2,500.
The Earned Income Tax Credit has much lower AGI ceilings that depend on the number of qualifying children. For 2025, the cutoff ran from roughly $19,100 (no children, single) to about $68,700 (three or more children, married filing jointly).14Internal Revenue Service. Earned Income and Earned Income Tax Credit (EITC) Tables Crossing the ceiling by a dollar wipes out the full credit.
Medical Expense Deduction
If you itemize, medical and dental expenses are deductible only to the extent they exceed 7.5% of your AGI.15Internal Revenue Service. Publication 502 (2025), Medical and Dental Expenses At $80,000 AGI, the floor is $6,000. At $120,000 AGI, it’s $9,000. A higher AGI eats directly into the deduction.
Net Investment Income Tax
A 3.8% surtax applies to net investment income when MAGI exceeds $200,000 (single) or $250,000 (married filing jointly).16Internal Revenue Service. Topic No. 559, Net Investment Income Tax These thresholds have not moved since the tax took effect in 2013.
From AGI to Taxable Income
AGI on Line 11 is not what the tax brackets are applied to. You subtract the standard deduction or itemized deductions next. For 2026, the standard deduction is $16,100 for single filers or married filing separately, $32,200 for married filing jointly, and $24,150 for head of household.17Internal Revenue Service. IRS Tax Inflation Adjustments for Tax Year 2026 Personal exemptions remain at zero.
If you itemize on Schedule A instead, the most common deductions are state and local taxes (capped at $40,000, or $20,000 if married filing separately, with a MAGI-based reduction for high earners that can’t drop the cap below $10,000), home mortgage interest, and charitable contributions.18Internal Revenue Service. Topic No. 503, Deductible Taxes You take whichever is larger.
Business owners may then subtract the qualified business income deduction, generally 20% of qualified business income from domestic operations.19Internal Revenue Service. Qualified Business Income Deduction What remains after these steps is taxable income, which is what gets run through the federal brackets.
Using Last Year’s AGI to E-File
Your prior-year AGI has one practical use most people don’t expect: the IRS uses it to verify your identity when you e-file. Without an Identity Protection PIN, the system will ask for the AGI shown on last year’s Form 1040, Line 11.20Internal Revenue Service. Validating Your Electronically Filed Tax Return Enter the wrong number and the return gets rejected.
If you don’t have last year’s return in front of you, three options work:
- Log in to your IRS online account and check the Tax Records tab
- Open the return in the tax software you used last year, if it stored the file
- Request a tax transcript by calling 800-908-9946 or through irs.gov (delivery takes 5 to 10 days)
Anyone with an Identity Protection PIN can enter that instead of prior-year AGI. The IRS mails IP PINs to identity theft victims on Notice CP01A, and anyone else can request one through the Get an IP PIN tool at irs.gov.20Internal Revenue Service. Validating Your Electronically Filed Tax Return