Adjusted gross income
Your total income for the year minus a short list of adjustments, like deductible IRA contributions and student loan interest. Many tax rules and programs use it.
Adjusted gross income, or AGI, starts with everything you earned: wages, tips, self-employment profit, interest and most other income. Then you subtract adjustments, such as deductible traditional IRA contributions, student loan interest and half of any self-employment tax.
AGI comes before the standard deduction, so it is higher than your taxable income. IRS Free File, many credits and some deductions check your AGI to decide if you qualify. It is printed on your Form 1040.
Example
Wages of $54,000 plus $350 of interest, minus $1,100 of student loan interest: $54,000 + $350 − $1,100 = $53,250 of AGI.