Short Answer
Adjusted Gross Income (AGI) is your total income (Form 1040 line 9) minus the above-the-line adjustments in IRC §62 - it lands on Form 1040 line 11. Modified Adjusted Gross Income (MAGI) is AGI with certain items added back, and there is no single MAGI: each tax benefit defines its own. The IRA-deduction and Roth MAGI add back the IRA deduction, student loan interest, foreign exclusions, savings bond interest, and adoption benefits (Roth also subtracts conversion income). The Premium Tax Credit MAGI adds tax-exempt interest, foreign income, and non-taxable Social Security. Education credits and student loan interest add foreign income and Puerto Rico/American Samoa income. NIIT adds net foreign income; Medicare IRMAA adds tax-exempt interest and uses your MAGI from two years prior. For most filers with no foreign income, tax-exempt interest, or IRA/student loan deduction, MAGI equals AGI. The new OBBBA tips, overtime, car loan, and senior deductions are below-the-line and do not reduce AGI or MAGI.
How the AGI and MAGI Calculation Works
The calculator runs in three stages: build AGI from income and adjustments, apply each provision-specific add-back to compute the seven MAGIs, then compare each MAGI to the threshold for your filing status and tax year.
Step 1: Adjusted Gross Income (AGI) Confirmed
AGI = Total Income (Form 1040 line 9) − Above-the-Line Adjustments. The adjustments allowed in computing AGI are listed in IRC §62(a) and reported on Schedule 1 Part II: the deductible part of self-employment tax, HSA deduction (§223), self-employed health insurance (§162(l)), self-employed retirement contributions (§404), the traditional IRA deduction (§219), student loan interest (§221), educator expenses up to $300 (§62(a)(2)(D)), the penalty on early withdrawal of savings, and a few others. AGI lands on Form 1040 line 11.
Step 2: Modified AGI (MAGI) Confirmed
Each MAGI = AGI + provision-specific add-backs. The calculator computes all seven: IRA-deduction MAGI and Roth MAGI (Pub 590-A Worksheets 1-1 and 2-1), Premium Tax Credit MAGI (§36B), education credit MAGI (§25A), student loan interest MAGI (§221), NIIT MAGI (§1411), and Medicare IRMAA MAGI. The Roth MAGI additionally subtracts income from Roth conversions and rollovers. For a filer with no foreign income, no tax-exempt interest, no savings bond or adoption exclusion, and no IRA or student loan deduction, every MAGI equals AGI.
Step 3: Threshold Comparison Confirmed
Each MAGI is compared to the relevant phase-out range for your filing status and tax year. The IRA and Roth ranges come from IRS Notice 2025-67 (2026) and Notice 2024-80 (2025). The student loan range comes from Rev. Proc. 2025-32 §4.29 (2026). The education credit range ($80K-$90K single / $160K-$180K MFJ) is frozen by FCAA 2020 §104. The NIIT thresholds ($200K / $250K / $125K) are statutory and not indexed. The Premium Tax Credit uses a percentage of the federal poverty line, and IRMAA uses a CMS bracket table with a two-year lookback, so the calculator reports those MAGI figures and links to the dedicated tools rather than applying a single dollar threshold.
What Does NOT Reduce AGI Confirmed
The standard deduction, itemized deductions (Schedule A), and the §199A QBI deduction are subtracted AFTER AGI to reach taxable income - they do not reduce AGI. The four OBBBA Schedule 1-A deductions (no tax on tips under §224, no tax on overtime under §225, car loan interest under §163(h)(4), and the $6,000 senior deduction) are also below the line: the Schedule 1-A total flows to Form 1040 line 13b, after the AGI line. Per IRS guidance, these "Additional Deductions" are not used in computing AGI, so they do not change any MAGI figure either.
Frequently Asked Questions
What is the difference between AGI and MAGI?
Adjusted Gross Income (AGI) is your total income minus the above-the-line adjustments listed in IRC §62 (such as the deductible part of self-employment tax, HSA contributions, the self-employed health insurance deduction, traditional IRA contributions, and student loan interest). AGI appears on Form 1040 line 11. Modified Adjusted Gross Income (MAGI) is AGI with certain items added back. There is no single MAGI - each tax provision defines its own. The most common add-backs are tax-exempt interest, the foreign earned income exclusion, non-taxable Social Security benefits, and (for the IRA and Roth MAGIs) the IRA deduction and student loan interest deduction. For most taxpayers with no foreign income, no tax-exempt interest, and no IRA or student loan deduction, MAGI equals AGI.
Do the new OBBBA deductions for tips, overtime, car loan interest, and seniors reduce my AGI?
No. The four One Big Beautiful Bill Act deductions reported on the new Schedule 1-A (no tax on tips under §224, no tax on overtime under §225, car loan interest under §163(h)(4), and the $6,000 senior deduction under §70103) are below-the-line deductions. The Schedule 1-A total flows to Form 1040 line 13b, which is after the AGI line (line 11), so it reduces taxable income but not AGI. Per IRS guidance and the Current Federal Tax Developments technical review, these additional deductions are not used in the computation of Adjusted Gross Income. Because they do not change AGI, they also do not change any MAGI figure. This is a common misconception - the deductions are available whether you itemize or take the standard deduction, but availability without itemizing does not make a deduction above-the-line.
What MAGI is used for the traditional IRA deduction?
Per IRS Publication 590-A Worksheet 1-1, the traditional IRA deduction MAGI starts with AGI and adds back: the traditional IRA deduction itself, the student loan interest deduction, the foreign earned income exclusion and foreign housing exclusion or deduction, excludable U.S. savings bond interest (Form 8815), and excludable employer-provided adoption benefits (Form 8839). For tax year 2026, if you are covered by a workplace retirement plan, the deduction phases out from $81,000 to $91,000 MAGI for single or head of household filers and from $129,000 to $149,000 for married filing jointly when the contributor is covered. A contributor not covered but married to someone who is uses a $242,000 to $252,000 range for 2026. Married filing separately uses a $0 to $10,000 range.
What MAGI is used for Roth IRA contribution limits?
Per IRS Publication 590-A Worksheet 2-1, the Roth IRA MAGI uses the same add-backs as the traditional IRA MAGI (the IRA deduction, student loan interest, foreign exclusions, savings bond interest, and adoption benefits) but then subtracts income you reported from converting a traditional IRA to a Roth or rolling over to a Roth. For tax year 2026, the Roth contribution phase-out is $153,000 to $168,000 MAGI for single or head of household and $242,000 to $252,000 for married filing jointly or qualifying surviving spouse. Married filing separately is $0 to $10,000. For 2025 the ranges were $150,000 to $165,000 single and $236,000 to $246,000 MFJ.
What MAGI is used for the Premium Tax Credit (ACA subsidy)?
Per IRC §36B(d)(2)(B), the Premium Tax Credit MAGI is AGI plus three items: tax-exempt interest, the foreign earned income exclusion and foreign housing exclusion, and the non-taxable portion of Social Security benefits. This is a household figure - you add the MAGI of every tax filer in the household who is required to file. PTC MAGI is compared to the federal poverty line (as a percentage), not a fixed dollar threshold. The 400% of federal poverty line subsidy cliff returned on January 1, 2026 after the enhanced ARPA and Inflation Reduction Act subsidies expired at the end of 2025.
What MAGI is used for the education tax credits (AOTC and Lifetime Learning)?
Per IRC §25A, the education credit MAGI is AGI plus the foreign earned income exclusion, the foreign housing exclusion or deduction, and income excluded from Puerto Rico (§933) or American Samoa (§931). The phase-out is frozen by the Further Consolidated Appropriations Act of 2020 §104 and is not adjusted for inflation: $80,000 to $90,000 MAGI for single, head of household, or qualifying surviving spouse, and $160,000 to $180,000 for married filing jointly. The same range applies to both the American Opportunity Tax Credit and the Lifetime Learning Credit, and applies to both 2025 and 2026. Married filing separately cannot claim either credit.
What MAGI is used for the student loan interest deduction?
Per IRC §221(b)(2)(D), the student loan interest deduction MAGI is AGI computed without the student loan interest deduction itself, plus the foreign earned income exclusion, foreign housing exclusion or deduction, and Puerto Rico or American Samoa excluded income. For 2026, the deduction phases out from $85,000 to $100,000 MAGI for single, head of household, or qualifying surviving spouse, and from $175,000 to $205,000 for married filing jointly (per Rev. Proc. 2025-32 §4.29). For 2025 the MFJ range was $170,000 to $200,000; the single range was the same at $85,000 to $100,000. Married filing separately is barred under §221(e)(2).
What MAGI is used for the Net Investment Income Tax (NIIT)?
Per IRC §1411, the 3.8% Net Investment Income Tax applies to the lesser of your net investment income or the amount by which your MAGI exceeds a fixed threshold: $200,000 for single or head of household, $250,000 for married filing jointly or qualifying surviving spouse, and $125,000 for married filing separately. The NIIT MAGI is AGI plus the net foreign earned income exclusion. For taxpayers with no foreign earned income, NIIT MAGI equals AGI. These thresholds are set by statute and have not been adjusted for inflation since the tax took effect in 2013.
What MAGI is used for Medicare IRMAA surcharges?
The Medicare Income-Related Monthly Adjustment Amount (IRMAA) uses a MAGI equal to AGI plus tax-exempt interest. Critically, IRMAA uses your MAGI from two years before the premium year - your 2026 Medicare Part B and Part D premiums are based on your 2024 MAGI. The Social Security Administration compares that MAGI to the current-year CMS bracket table; if you exceed the first tier, a surcharge is added to your standard Part B and Part D premiums. Because of the two-year lookback, a one-time income spike (a Roth conversion, a home sale, or a large capital gain) can raise your Medicare premiums two years later.
Does the standard deduction or QBI deduction reduce AGI?
No. Neither the standard deduction nor itemized deductions reduce AGI - they are subtracted from AGI to arrive at taxable income (Form 1040 line 12). The §199A qualified business income (QBI) deduction is also below the line, on Form 1040 line 13. Only the above-the-line adjustments listed in IRC §62 (Schedule 1 Part II) reduce AGI: the deductible part of self-employment tax, HSA contributions, self-employed health insurance, self-employed retirement plan contributions, the IRA deduction, student loan interest, educator expenses, and a few others. Reducing AGI is more valuable than reducing taxable income alone because AGI drives nearly every phase-out threshold in the Code.