Modified adjusted gross income and how to calculate it
When you think about what qualifies as your income, you likely consider the money you receive from a salary or wages. But when it comes to tax planning, you may also need to know what your modified adjusted gross income (MAGI) is.
Use this guide to learn more about what MAGI is, how it’s used and how to calculate it.
Key takeaways
- MAGI is a way to calculate your income, accounting for certain tax deductions.
- Your MAGI can be used to determine whether you’re eligible to contribute to a retirement account.
- Your MAGI isn’t on your tax return, but you can use your gross income and adjusted gross income (AGI) to calculate it.
What is modified adjusted gross income?
MAGI is your AGI with certain tax deductions and tax-exempt interest income added.
MAGI can help you better understand your taxable income. It can be calculated by the IRS and used to determine:
- Whether you’re eligible for certain tax credits, like the premium tax credit
- Whether your income falls within the Roth individual retirement account (IRA) contribution limits
- Whether you qualify for state Medicaid programs based on income thresholds
- Whether you’re eligible for health care savings, like waivers or incentives, through various marketplace health insurance plans
- Whether you’re eligible for the student loan interest deduction
What’s the difference between adjusted gross income and modified adjusted gross income?
AGI is your gross income minus various adjustments. Your MAGI is your AGI plus certain deductions. In many cases, your AGI and MAGI are close—and sometimes, they can even be the same number.
Both AGI and MAGI can affect your eligibility for certain tax credits and deductions. One of the more common reasons for calculating your MAGI is to determine whether you can deduct contributions made to an IRA.
MAGI and retirement account limits
When saving for retirement, your MAGI is used to determine how much you can contribute—or whether you can contribute at all—to an IRA and whether you can deduct contributions.
MAGI and Roth IRAs
Whether you can contribute to a Roth IRA with after-tax dollars depends on your MAGI. Even if you can contribute to a Roth IRA, whether you can contribute the full amount is based on your MAGI and filing status.
As you’re preparing for filing your taxes in 2024, here are the 2023 Roth IRA income limits:
| Filing status | MAGI | Amount you can contribute |
|---|---|---|
| Married filing jointly or qualifying widow(er) | Less than $218,000 | Up to the limit |
| Married filing jointly or qualifying widow(er) | $218,001 - $228,000 | A reduced amount |
| Married filing jointly or qualifying widow(er) | More than $228,000 | Zero |
| Married filing separately and you lived with your spouse at any time during the year | Less than $10,000 | A reduced amount |
| Married filing separately and you lived with your spouse at any time during the year | More than $10,000 | Zero |
| Single, head of household or married filing separately and you did not live with your spouse at any time during the year | Less than $138,000 | Up to the limit |
| Single, head of household or married filing separately and you did not live with your spouse at any time during the year | $138,001 - $153,000 | A reduced amount |
| Single, head of household or married filing separately and you did not live with your spouse at any time during the year | More than $153,000 | Zero |
MAGI and traditional IRAs
Your MAGI could also affect whether you’re able to deduct your contributions to a traditional IRA, which you can make with pretax dollars. According to the IRS, the traditional IRA income threshold can be dependent on your filing status and whether you or your spouse are covered by a plan at work.
As you’re preparing for filing your taxes in 2024, here are the 2023 deduction limits if you’re covered at work:
| Filing status | MAGI | Amount you can take |
|---|---|---|
| Single or head of household | $73,000 or less | A full deduction up to the amount of your contribution limit |
| Single or head of household | $73,001 - $83,000 | A partial deduction |
| Single or head of household | More than $83,000 | No deduction |
| Married filing jointly or qualifying widow(er) | $116,000 or less | A full deduction up to the amount of your contribution limit |
| Married filing jointly or qualifying widow(er) | $116,001 - $136,000 | A partial deduction |
| Married filing jointly or qualifying widow(er) | More than $136,000 | No deduction |
| Married filing separately | Less than $10,000 | A partial deduction |
| Married filing separately | $10,000 or higher | No deduction |
Here are the 2023 deduction limits if you’re not covered at work:
| Filing status | MAGI | Amount you can take |
|---|---|---|
| Single, head of household or qualifying widow(er) | Any amount | A full deduction up to the amount of your contribution limit |
| Married filing jointly or filing separately with a spouse not covered by a plan at work | Any amount | A full deduction up to the amount of your contribution limit |
| Married filing jointly with a spouse who is covered by a plan at work | $218,000 or less | A full deduction up to the amount of your contribution limit |
| Married filing jointly with a spouse who is covered by a plan at work | $218,001 - $228,000 | A partial deduction |
| Married filing jointly with a spouse who is covered by a plan at work | More than $228,000 | No deduction |
| Married filing separately with a spouse who is covered by a plan at work | Less than $10,000 | A partial deduction |
| Married filing separately with a spouse who is covered by a plan at work | More than $10,000 | No deduction |
How to calculate modified adjusted gross income
There are different ways to calculate your MAGI. Here are the general steps:
1. Determine your gross income
Your gross income is your total earnings before taxes or deductions. This can include:
You can find your gross income by referring to line 9 of your tax return or IRS Form 1040.
2. Figure out your AGI
This refers to your gross income minus various adjustments, including:
- 401(k) contributions
- Health savings account (HSA) deductions
- Alimony payments
- Unemployment compensation
- Educator expenses
You can figure out your AGI manually or by referring to line 11 of IRS Form 1040. Or if you use a tax preparer or tax software, your AGI may be calculated for you.
3. Calculate your MAGI
Once you know your AGI, you can figure out your MAGI by adding various deductions, like:
- Student loan interest deductions
- Foreign earned income exclusions
- Various housing exclusions
- Foreign housing deductions
- Excluded savings bond interest
- Half of any self-employment taxes
The deductions you include in your MAGI calculation can differ depending on the reason you’re calculating it. For example, you might qualify for a government program, tax program or tax benefit. So you may want to consider working with a tax professional.
MAGI FAQ
Here are a few of the most commonly asked questions about MAGI:
What reduces MAGI?
You may be able to lower your MAGI by reducing your AGI, and that can lower how much you owe in taxes. For example, contributions made to your traditional 401(k) can reduce your MAGI. But contributions made to a Roth IRA don’t reduce MAGI because they’re made with after-tax dollars.
You can also contribute toward an HSA or make charitable donations to potentially reduce your MAGI.
MAGI may include nontaxable Social Security benefits but not Supplemental Security Income.
Where can I find my MAGI on my tax return?
MAGI isn’t on a specific line on your tax return. But you can find your AGI on line 11 of your IRS Form 1040. You could then use that to manually calculate your MAGI by adding back in certain deductions.
MAGI in a nutshell
MAGI is typically different from your gross income and your AGI, but you can use both figures to calculate your MAGI. Understanding what your MAGI is could help you understand which credits or deductions you may be eligible for.
Want to learn more about taxes? Check out this guide for a closer look at what to know when filing taxes, or consider reaching out to a tax professional.
