DayCents

Adjusted Gross Income (AGI)

Adjusted gross income is your total income minus specific 'above-the-line' adjustments like traditional IRA contributions, student-loan interest, and HSA deposits. It's a key figure on your tax return because many deductions, credits, and eligibility limits are based on it.

Subtract the standard or itemized deduction from AGI to get taxable income, the number your tax is actually calculated on. Lowering AGI — for example, by contributing to a pre-tax retirement account — can both cut your tax and unlock income-limited benefits.