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What is AGI?

For tax purposes, AGI stands for ‘adjusted gross income’. The IRS defines certain items that must be included in gross income, but there are also items that are adjustments, which reduce gross income. The formula for AGI is gross income less adjustments.

AGI is ultimately used to determine your amount of taxable income, so as a taxpayer, make sure you consider whether each and every allowable adjustment is applicable to you! Below is a list of common adjustments to gross income (AGI!):

1) Education expenses (up to $250)

2) Student loan interest

3) Traditional IRA contributions

4) HSA contributions

5) Self-employment tax (only 50%)

6) Self-employment insurance

7) self-employment retirement

8) Moving expenses (active military only)

9) Alimony (pre-2018)

10) Attorney fees for discrimination cases


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