This adjusted gross income calculator subtracts the deductions from your income to estimate the adjusted gross income which is used to find your total tax liability. There is more info on this topic, below the form.


Salary, wages and/or tips:
Taxable interest:
Taxable IRA distributions:
Taxable pensions or annuities:
Regular dividends:
Other capital gains:
Other income:


Contribution to IRA:
Interest on student loans:
Movement expenses if the case:
Self-employed health insurance contributions:
One half of self-employment tax:
Other contributions for yourself:
Other deductions:

How does this adjusted gross income calculator work?

This personal finance tool can help you figure out your tax liability by considering all of your income sources and the figure of the deductions you are eligible for.

The algorithm behind this adjusted gross income calculator performs the following steps:

  • Adds all the values from the income sources specified.
  • Adds all the amount form the deductions section.
  • Subtracts the deduction from the income to figure out the AGI indicator.

In regard of the data you may need to specify please note that:

  • The other income field refers to any other income such as income from unemployment compensation, received alimony, other business you may run, rental income, any taxable social security benefits received, taxable refunds or any farm income.
  • The other deductions variable can include deductions such as alimony paid, medical deductions or any similar depending on your case.

Example of a calculation

Let's take the case of an individual with the following situation:

- salary: $55,000/year

- taxable interest: $15,000

- regular dividends: $10,000

- other capital gains: $5,000

- contribution to IRA: $10,000

- movement expenses: $5,000

- other contributions that are deducted: $5,000. Will result in:

Adjusted Gross Income = $65,000.00.

Total gross income = $85,000.00.

Total deductions = $20,000.00.

Adjusted gross income definition

Often abbreviated as AGI, within United States income tax system, the adjusted gross income represents an individual's total gross income minus his deductions, thus many people refer to it due to a higher relevance in comparison with simple gross income.

The taxable income value is obtained by subtracting the allowances personal exemptions and itemized deductions from the adjusted gross income.

Gross income consists in any income from whatever source. For instance, but not limited to this list, the gross income includes:

interest earned business income
wages alimony
salary pensions income
bonuses annuities received
dividends income tax refunds
rental income net gains for disposal of assets
royalties capital gains

Few examples of adjustments that are applied to the gross income are:

Contribution to IRA account One half of self-employment tax
Specific moving expenses Contributions to retirement plans such as: SEP IRA, traditional IRA
Certain expenses related to running a trade or business Alimony paid
Specific health savings account College tuition
Interest on student loans College fees

According to the law the gross income should be officially reported by Form 1040 series (U.S. federal individual income tax returns).

As per today there are specific cases in which the tax calculations are based on a modified adjusted gross income as defined within the law. In these cases there are items gross income related that are added to the calculation such as tax exempt interest, tax-free foreign earned income or the excluded portion of social security benefits.

07 Feb, 2015 | 0 comments

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