AGI
AGI is an acronym for adjusted gross income .
Adjusted gross income (AGI) is defined as the gross income earned by an individual minus several adjustments made to that income, such as trade and business deductions . Gross income is the income earned by an individual, including the wage , dividends , capital gains , business income and retirement distributions , but it can also include other types of income. In order to find the AGI, adjustments are made to the income, including student loan interests , alimony payments, or retirement savings .
The AGI must be calculated by the IRS to determine one individual’s income tax liability for the taxable year . The term applies to individuals and affects the extent to which medical expenses , nonbusiness casualty and theft losses , charitable contributions, and other items may be deducted.
See: 26 U.S. Code § 62 and adjusted gross income (AGI) .
[Last reviewed in November of 2024 by the Wex Definitions Team ]
Keywords
Wex