AGI Calculator

Formula

The formula to calculate Adjusted Gross Income (AGI) is:

\[ \text{AGI} = \text{Gross Income} - \text{Adjustments to Income} \]

Where:

Gross Income — The sum of all taxable income received during the year;
Adjustments to Income — The sum of all allowable deductions that are subtracted from your gross income.

Description

Adjusted Gross Income (AGI) is a measure of income calculated from your gross income and used to determine how much of your income is taxable. It includes income from wages, business income, rental income, and other sources, minus specific deductions known as adjustments to income.

Example Calculation

Let's assume the following:

Gross Income: $85,000
Adjustments to Income: $5,000

Step 1: Calculate AGI:

\[ \text{AGI} = \$85,000 - \$5,000 = \$80,000 \]

Therefore, the Adjusted Gross Income (AGI) is $80,000.