AGI (Adjusted Gross Income)

Adjusted Gross Income (AGI) is a key figure used in U.S. tax calculations. It starts with your total income from all sources, such as wages, investments, and self-employment. Then, you subtract certain allowable deductions, like contributions to retirement accounts or student loan interest. The resulting amount is your AGI, which helps determine your taxable income and eligibility for various tax credits and deductions. AGI provides a clearer picture of your financial situation for tax purposes, acting as a starting point for calculating your overall tax liability.