This MAGI calculator estimates the modified adjusted gross income for business by considering the simple adjusted gross income and the computation rule released by IRS. There is in depth information on how to determine this tax indicator below the form.

Adjusted Gross Income Per Return:*
+/- Audit Adjustments affecting AGI:
- Taxable Social Security IRC § 86:
+ IRA Deductions IRC § 219:
+ Deduction for 1/2 Self Employment Tax:
+ Passive Losses IRC § 469(i)(E)(iv):
+ Rental Real Estate Losses 469(c)(7) IR§469(i)(E)(iv):
+ Nontaxable Income from US savings:
+ Exclusion under IRC§137 for adoption expenses (W-2):
+ Student loan interest deduction:

How does this modified adjusted gross income calculator for business work?

This is a financial tool that aims to compute the MAGI valuefor FORM 8582 line 7, for businesses.

As publicly released by the IRS (December 2004), in case of a business the MAGI is estimated by applying the following rules:

Adjusted Gross Income without:

  • Any passive loss or passive income, or                            

  • Any rental losses (whether or not allowed by IRC § 469(c)(7)),  or

  • IRA, taxable social security or

  • One-half of self-employment tax (IRC § 469(i)(3)(E)) or      

  • Exclusion under 137 for adoption expenses or

  • Student loan interest.

  • Exclusion for income from US savings bonds (to pay higher education tuition and fees)

  • Qualified tuition expenses (tax years 2002 and later)

  • Tuition and fees deduction

  • Any overall loss from a PTP (publicly traded partnership)

Source: IRS website

The algorithm behind this modified adjusted gross income calculator applies the alternative calculation provided by the IRS, which is detailed in the form itself. That assumes that to the AGI figure there are some items added, while a few of them are subtracted, as explained below:

+/- Audit Adjustments affecting AGI

–  Taxable Social Security IRC § 86

+  IRA Deductions IRC § 219

+   Deduction for 1/2 Self Employment Tax

+   Passive Losses IRC § 469(i)(E)(iv)

+   Rental Real Estate Losses 469(c)(7) IR§469(i)(E)(iv)

+   Nontaxable Income from US savings

+   Exclusion under IRC§137 for adoption expenses (W-2)

+   Student loan interest deduction

Source for the rules: IRS website

11 Feb, 2015