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How to Calculate Your Modified Adjusted Gross Income (MAGI)

Your MAGI is a Crucial Number if You're an IRA Investor

By David Fisher

(LifeWire) - Modified adjusted gross income (MAGI) determines your eligibility for numerous tax benefits, including whether you can deduct IRA contributions, contribute to a Roth IRA or convert a traditional IRA to a Roth IRA.

Start with your adjusted gross income, the figure on the last line of the front of your 1040 or 1040A tax form. Then add back:

  • Deductions for IRA contributions.
  • Deductions for student loan interest or tuition.
  • Excluded foreign income.
  • Interest from EE savings bonds used to pay higher education expenses.
  • Employer-paid adoption expenses.

Things you don't have to add to the AGI:

  • Contributions to employer-sponsored plans, like 401(k)s.
  • Taxable income generated by converting to a Roth IRA.
LifeWire, a part of The New York Times Company, provides original and syndicated online lifestyle content. David Fisher is a freelance writer based in Bend, Ore. In addition to 25 years as a writer and editor, he has worked as a professional financial adviser.

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