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Modified Adjusted Gross Income (MAGI) - Definition and Calculation


Retirement Plan
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Definition: Modified Adjusted Gross Income is a measure used by the IRS to determine if a taxpayer is eligible to use certain deductions, credits, or retirement plans.

Examples of programs that require the use of MAGI include:

Calculating Modified Adjusted Gross Income (MAGI):

Modified Adjusted Gross Income (MAGI) is calculated by adding back certain items to your Adjusted Gross Income. Your Adjusted Gross Income (AGI) can be found on line 38 of your Form 1040; line 22 of your Form 1040A; or line 36 of your Form 1040NR.

The following items must be added to your Adjusted Gross Income (AGI) to calculate your Modified Adjusted Gross Income (MAGI):

  • Traditional IRA contributions that were deducted.
  • Student loan interest amounts deducted.
  • Tuition and fees deducted.
  • Domestic production activities deducted.
  • Foreign income or housing costs excluded on Form 2555.
  • Foreign housing deduction taken on Form 2555.
  • Savings bond interest excluded on Form 8815.
  • Adoption benefits from an employer excluded on Form 8839.

Worksheet 1-1, found on page 17 of IRS Publication 590, provides information for a step-by-step calculation of Modified Adjusted Gross Income (MAGI).

Also Known As: MAGI, Modified AGI
The Hope Scholarship tax credit is not available to taxpayers filling jointly who have a Modified Adjusted Gross Income (MAGI) above $114,000 for 2007.

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