What is Adjusted Gross Income (AGI)?

Adjusted Gross Income (AGI) is simply your total gross income minus specific deductions. Additionally, your Adjusted Gross Income is the starting point for getting to taxable income, calculating your taxes and determining your eligibility for certain tax credits and deductions that you can use to help you lower your overall tax bill or increase your tax refund.

Here are a couple of quick AGI takeaways:

• Your AGI appears on Line 11 of IRS Form 1040 (for the 2025 and 2024 returns).
• The basic formula for AGI is: Gross income – above-the-line deductions = AGI

Read on as we outline more information about Adjusted Gross Income (AGI), how to calculate AGI, and how you, the taxpayer, might be able to reduce your AGI depending on your unique tax situation.

What is AGI for tax purposes?

“What is AGI?” and “What is AGI on taxes?” AGI is simply the acronym for Adjusted Gross Income. It’s a common term used for tax purposes, so it’s important to understand AGI’s meaning and relevance.

To boil it down, it’s simply your total gross income minus specific tax deductions. Some common examples of eligible deductions that reduce adjusted gross income include deductible traditional IRA contributions, health savings account contributions, and educator expenses.

But what does Adjusted Gross Income mean for you in real life? Here are a few places it comes into play!

1.  It’s the starting point for subtracting the standard or itemized deductions to get to your taxable income, then calculating your tax liability and your federal tax rate.

2. It helps you better understand if you qualify for specific tax credits or deductions. (Important tax advice: Some credits and tax deductions have AGI limitations.)

3. It helps determine your eligibility in other financial situations, like applying for a loan to buy property, eligibility to rent an apartment, or even getting a student loan to pay for higher education.

Income definitions, comparisons, and related documents

Let’s face it: tax terminology can get a little confusing. When it comes to talking about federal income tax, several terms sound similar, but they have different definitions and intentions.

To clarify the various ways to talk about income, let’s run through a list of the different types:

• Taxable income: Taxable income is arrived at by subtracting the standard or itemized deductions—whichever amount is greater—from your AGI. Take note of the nuances between AGI vs. taxable income: These two tax terms are commonly intertwined but represent different things. Long story short, your taxable income is what you’ll use to determine your tax bracket.
• Gross income: Gross income includes all income received from all sources, including monetary gifts, property, and the value of services received. Wages, tips, interest, dividends, rents, and pension income are also examples of sources that contribute to your total gross income (not including tax-exempt income).
• Modified Adjusted Gross Income (MAGI): This is your AGI plus a few items either added back in or subtracted. Your Modified Adjusted Gross Income determines your eligibility for certain deductions, credits, and retirement plans. Take note: there’s no fixed definition of MAGI, as the modifications vary depending on the specific tax benefit.

What is Adjusted Gross Income on a W-2?

So, where is Adjusted Gross Income on W2 forms? The answer is—it’s not there. AGI is something you calculate from several sources, but it’s not shown on a W-2.  But you will need your W-2 tax form to start the calculation. See the “How to calculate AGI section” below.

How to find annual income

Sometimes, when people consider annual income or total annual income, they might be thinking of their salary before or after taxes are taken out from their paychecks. You can find your annual income on your Form W2 from your employer. (Check out the next section if you’re looking for your AGI from last tax year.) If you’re wondering how to get AGI on your paycheck, unfortunately, you can’t. But read on to hear where to go to get this info!

Finding your prior-year Adjusted Gross Income on 1040 forms

Can you find AGI on tax returns filed in previous years? Yes, if you filed Form 1040, Form 1040-SR, or 1040-NR, your AGI will be listed on Line 11.

Your prior-year AGI can be used to validate your electronic return with the Internal Revenue Service (IRS). Now that you know where to find AGI, you’ll just need a copy of last year’s tax return to actually locate your Adjusted Gross Income on IRS Form 1040 from the previous tax year. Read on to learn how.

How to find my AGI from last year—more details

If you can’t find your prior-year AGI, you have a couple of options. You’ll need to request a copy of a return for the prior year from the Internal Revenue Service, which you can do any of these ways:

• View or download a transcript of your return online at https://www.irs.gov/individuals/get-transcript.
• Go to https://www.irs.gov/individuals/get-transcript and request a hard copy transcript of your return be mailed to you. This will take 5 to 10 business days.

Call the IRS at 800-908-9946 and request a hard copy transcript be mailed to you. This will take 5 to 10 business days. (Related: IRS phone number, website, and contact information)

For additional tax details, review our article about how to get copies of old tax returns.

If you and your spouse filed jointly last year, your spouse’s AGI will be the same as yours. If your spouse had a different AGI, you’ll need his or her information to get their AGI from the IRS.

How is adjusted gross income (AGI) calculated on a tax return?

If you use software or an online tax preparation service to prepare your tax return, it will calculate your AGI once you input your numbers. But if you want to figure it out by hand, here’s are the steps.

How to calculate AGI

1. Add your total income and wages

Begin by tallying your reported income that’s subject to income tax for the year. For most people, it includes job income taken from Form W-2 or applicable Form 1099s. (Related: What’s the difference between Form W-2 vs 1099?)

You might have other types of income. Here are some examples of other types of income:

• Capital gains
• Dividends
• Interest
• Passthrough income from a partnership or S corporation
• Pensions
• Rental income
• Self-employment income
• Taxable Social Security payments
• Taxable alimony payments
• Unemployment compensation

2. Subtract “above the line” deductions*

Then, subtract the applicable adjustments to the income listed above from your reported income. Common adjustments include:

• Educator expenses
• Health Savings Account (HSA) deduction
• Military moving expenses
• Traditional IRA contributions
• One-half of self-employment tax
• Self-employed health insurance deduction
• Certain self-employed retirement account contributions
• Student loan interest deduction

The resulting amount is your AGI. In summary, the calculation is as follows:

Gross Income – Deductions = Adjusted Gross Income

*Note: Itemized deductions and the standard deduction are “below-the-line” deductions.

Why does AGI affect tax credits and deductions?

AGI matters because the IRS uses it to determine eligibility for many tax breaks. As your AGI increases, certain credits and deductions are gradually reduced—or phased out—until they’re limited or no longer available.

Examples of AGI‑based phaseouts include:

• Child Tax Credit: Higher AGI can reduce the credit amount or eliminate it entirely.
• Education credits: Credits like the American Opportunity and Lifetime Learning credits phase out at higher income levels.

How to reduce AGI

You may be able to reduce your AGI by claiming above-the-line deductions, such as:

• Health Savings Accounts (HSAs)
• IRA contributions
• Student loan interest deduction
• Educator expenses
• Self-employed health insurance
• Half of Self-Employment tax
• Self-employed retirement plans

Read on and we’ll dive deeper into some of these common “above-the-line” tax deductions.

1. Contribute to a Health Savings Account

If you participate in an eligible Health Savings Account, you may have the option to contribute up to $4,400 to your HSA account for 2026 for single coverage, and up to $8,750 for family coverage.

Those ages 55 and up can contribute up to an additional $1,000 to their HSA. This contribution can be made until the tax deadline, so you can decide to contribute for the current year up to the tax deadline the following year.

If you haven’t reached the contribution limit for the year, it might be of value to contribute. Contributions are deductible even if you don’t itemize! In addition, HSA funds can remain in the account and don’t expire at the end of the year. Therefore, using tax-free funds, putting money into an eligible HSA could help you cover future out-of-pocket medical expenses.

Find out more about the HSA tax deduction.

2. Retirement savings

Contributions to a traditional individual retirement savings account (IRA) can reduce your AGI dollar-for-dollar. If you have a traditional IRA, your income and any workplace retirement plan may limit the amount your AGI can be reduced.

The deduction’s upper limit is $7,000 in 2025 ($8,000 for those 50 years of age or older in 2025). Learn more about tax topics related to retirement income.

3. Student loan interest deduction

Student loan interest is interest paid during the year on a qualified student loan. The is another adjustment to your AGI. The maximum deduction you can claim is $2,500—but it’s limited by your income. Learn more about the student loan interest deduction.

4. Educator expenses

Teachers often incur out-of-pocket expenses each school year. Luckily, there’s a tax advantage if you spend your own money on class or classroom costs. In fact, educator expenses can reduce your AGI by offering a tax deduction of up to $300 (for 2025) for qualified K through 12 purchases like books, instructional supplies, classroom technology, and supplementary items used for the classroom.

The deduction is up to $600 (for 2025) if an educator is married to another eligible educator and filing under the status married filing jointly (up to $300 per person combined).

5. Self‑employed health insurance

Self‑employed health insurance includes premiums you pay for medical, dental, and long‑term care coverage for yourself and your family. This is an adjustment to your AGI, meaning it reduces your taxable income without needing to itemize. Learn more about the self-employed health insurance deduction.

6. Half of self‑employment tax

When you’re self‑employed, you can deduct half of the self‑employment tax you pay for Social Security and Medicare. This deduction is another way self-employed individuals can reduce their AGI. Learn more about self-employment tax.

7. Self-employed retirement plan contributions

SEP IRAs or Solo 401(k)s are retirement savings for self‑employed individuals. Eligible contributions can reduce your AGI now while saving for the future. Contributions to both plan types are subject to annual limits.

Get help with your tax filing and reducing your AGI

By taking advantage of one—or more—of these tax strategies before the end of the year, you could potentially help with reducing your taxable income and increase your tax refund.

Ready to file your taxes? H&R Block can help this tax season. Whether you choose to file with a tax pro or file with H&R Block Online, you can rest assured that we’ll get you the biggest tax refund possible.

Adjusted Gross Income FAQs

Which deductions reduce adjusted gross income?
Deductions that reduce AGI are called “adjustments to income” or “above‑the‑line” deductions. Common examples include student loan interest, educator expenses, traditional IRA contributions, HSA contributions, half of self‑employment tax, self‑employed health insurance, and certain self‑employed retirement contributions like SEP IRAs or Solo 401(k)s.

How can I legally reduce my adjusted gross income?
You can legally reduce your AGI by claiming eligible above‑the‑line deductions, such as contributing to retirement accounts, funding an HSA, deducting student loan interest, or claiming self‑employment‑related deductions. Lowering AGI may also help you qualify for more tax credits and deductions that are income‑based.