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

• tax

Wex

• CIVICS
• taxation
• COMMERCE
• accounting
• finance
• wex definitions
• commercial transactions
• legal education and practice
• tax
• money and financial problems