Cougarbear
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Adjusted Gross Income (AGI) is a tax calculation that is an individual's total (gross) income minus specific deductions, also known as "adjustments". Your AGI is a crucial figure used to determine your eligibility for various tax credits and deductions.Adjusted Gross Income is your income before deductions and taxes.
Net income is taxable income minus taxes paid.
*The term "Net" does not appear on Form 1040.
Gross income includes all the money you earn from various sources, such as:
- Wages, salaries, and tips
- Interest and dividends
- Business or rental income
- Capital gains
- Retirement account distributions (e.g., from a pension or 401(k))
- Unemployment benefits and alimony (for agreements made before 2019)
- Educator expenses
- Student loan interest
- IRA contributions
- Health Savings Account (HSA) contributions
- A portion of self-employment tax and self-employed health insurance premiums