What is Adjusted gross income (AGI)?
In short
Adjusted gross income (AGI) is an individual's gross income minus specific 'above-the-line' adjustments, such as deductible individual retirement account contributions, student loan interest and half of self-employment tax.
Key takeaways
- Many limits and phase-outs are based on AGI or a modified version of it.
- The standard or itemized deductions, and the qualified business income deduction, come after AGI.
- Medical expenses are deductible only above 7.5% of AGI.
Where it's tested
REG: Individual Taxation: Adjustments & Deductions — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
A taxpayer has AGI of $100,000 and incurs $12,000 of unreimbursed qualified medical expenses. What amount is deductible as an itemized deduction?