Estimate your Modified Adjusted Gross Income (MAGI) by inputting your Adjusted Gross Income (AGI) and relevant deductions/exclusions.
Your Estimated MAGI: —
(MAGI is used for tax credit and deduction eligibility)
Understanding Modified Adjusted Gross Income (MAGI)
Modified Adjusted Gross Income (MAGI) is a crucial figure used by the IRS and other government agencies to determine eligibility for various tax benefits, credits, and deductions. It's not a line item directly found on your tax return but rather a calculation based on your Adjusted Gross Income (AGI) with certain deductions and exclusions added back in. Knowing your MAGI is essential for understanding your tax situation and maximizing potential savings.
What is Adjusted Gross Income (AGI)?
Your Adjusted Gross Income (AGI) is your gross income minus specific "above-the-line" deductions. These deductions reduce your income before you even get to the standard or itemized deductions. Common above-the-line deductions include contributions to a traditional IRA, student loan interest, and self-employment tax deductions.
How is MAGI Calculated?
The general formula for MAGI is:
MAGI = Adjusted Gross Income (AGI) + Specific Add-Backs (Deductions/Exclusions)
The "Specific Add-Backs" are the key to understanding MAGI. These are certain deductions you took to arrive at your AGI that the IRS adds back for MAGI calculations. The specific items added back can vary depending on the tax benefit or credit you're applying for, but common ones include:
IRA Deduction
Student Loan Interest Deduction
Foreign Earned Income Exclusion
Alimony Paid (for divorce or separation agreements executed before January 1, 2019)
Deductible Part of Self-Employment Tax
Self-Employed Health Insurance Premiums
Contributions to Keogh plans, simplified employee pension (SEP) plans, and SIMPLE individual retirement arrangements
Penalty on Early Withdrawal of Savings
Why is MAGI Important?
MAGI is used to determine eligibility for or the amount of many tax benefits, such as:
Deductibility of contributions to a Traditional IRA
Eligibility for Lifetime Learning Credit and the American Opportunity Tax Credit
Eligibility for the Earned Income Tax Credit (EITC)
Eligibility for premium tax credits for health insurance purchased through the Health Insurance Marketplace
Deductibility of Medical Expense Itemized Deductions (threshold is based on AGI, but MAGI can be relevant for specific calculations or state taxes)
Example Calculation
Let's say your Adjusted Gross Income (AGI) is $75,000. You also took the following deductions:
IRA Deduction: $6,000
Student Loan Interest Deduction: $1,000
Deductible Part of Self-Employment Tax: $750
Self-Employed Health Insurance Premiums: $2,000
To calculate your MAGI, you would add these deductions back to your AGI:
In this scenario, your Modified Adjusted Gross Income (MAGI) would be $84,750. This figure would then be used to check against income limitations for various tax credits and benefits.
Note: This calculator provides an estimation. Tax laws are complex and specific circumstances may require consultation with a qualified tax professional. The list of add-backs may not be exhaustive and can change based on tax legislation.
function calculateMAGI() {
var agi = parseFloat(document.getElementById("adjustedGrossIncome").value);
var ira = parseFloat(document.getElementById("iraDeduction").value);
var studentLoan = parseFloat(document.getElementById("studentLoanInterest").value);
var foreignEarned = parseFloat(document.getElementById("foreignEarnedIncomeExclusion").value);
var alimony = parseFloat(document.getElementById("alimonyPaid").value);
var rentalLosses = parseFloat(document.getElementById("rentalLosses").value); // Renamed to match input, but conceptually it's more about SE tax
var selfEmploymentTaxDed = parseFloat(document.getElementById("selfEmploymentDeduction").value);
var selfEmployedHealth = parseFloat(document.getElementById("selfEmployedHealthInsurance").value);
var keoghSEP = parseFloat(document.getElementById("keoghSEPPlans").value);
var earlyWithdrawal = parseFloat(document.getElementById("earlyWithdrawalPenalty").value);
var magi = agi;
// Input validation: Check if values are valid numbers
if (!isNaN(agi) && agi >= 0) {
// AGI is the base, no need to add it to itself.
} else {
document.getElementById("result").innerHTML = "Please enter a valid AGI.";
return;
}
if (!isNaN(ira) && ira >= 0) {
magi += ira;
}
if (!isNaN(studentLoan) && studentLoan >= 0) {
magi += studentLoan;
}
if (!isNaN(foreignEarned) && foreignEarned >= 0) {
magi += foreignEarned;
}
if (!isNaN(alimony) && alimony >= 0) {
magi += alimony;
}
if (!isNaN(rentalLosses) && rentalLosses >= 0) {
// This input label was tricky. The common add-back is deductible part of SE tax,
// not rental losses themselves. Assuming it relates to SE tax deductions if the label was misleading.
// If it IS specifically for rental losses, it would only be added back under very specific MAGI calculations
// (like for ACA premium tax credits). For general MAGI, the primary SE tax related add-back is below.
// For simplicity in this calculator, we'll stick to the more common add-backs.
// If "rentalLosses" was meant to represent a deductible loss from rentals that IS added back,
// uncomment the line below. For now, it's omitted as less common for general MAGI.
// magi += rentalLosses;
}
if (!isNaN(selfEmploymentTaxDed) && selfEmploymentTaxDed >= 0) {
magi += selfEmploymentTaxDed;
}
if (!isNaN(selfEmployedHealth) && selfEmployedHealth >= 0) {
magi += selfEmployedHealth;
}
if (!isNaN(keoghSEP) && keoghSEP >= 0) {
magi += keoghSEP;
}
if (!isNaN(earlyWithdrawal) && earlyWithdrawal >= 0) {
magi += earlyWithdrawal;
}
// Ensure the final MAGI is not negative (though unlikely with these add-backs)
if (magi < 0) {
magi = 0;
}
document.getElementById("result").innerHTML = "Your Estimated MAGI: $" + magi.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 }) +
"(MAGI is used for tax credit and deduction eligibility)";
}