Adjusted Gross Income

Adjusted Gross Income (AGI) is a measure of income used to determine how much of your income is taxable. It starts with your total income, which includes wages, rental income, and dividends, and then subtracts specific deductions, like student loan interest and retirement contributions. The result is your AGI, which is important because it influences your eligibility for tax credits and deductions, ultimately affecting your overall tax liability. Understanding your AGI helps you better grasp your financial situation and potential tax benefits.