AGI vs MAGI
AGI is adjusted gross income; MAGI is AGI with certain add-backs.
AGI is your income after specific adjustments. MAGI adds back certain deductions and is used to determine eligibility for credits and Roth IRA limits. If you are comparing your marginal tax rate and effective tax rate, AGI is the common starting point. To estimate your own AGI, try the taxable income calculator.
AGI (Adjusted Gross Income)
Formula: Total Income − Above-the-Line Deductions
Above-the-line deductions include:
- Traditional IRA contributions (if deductible)
- Student loan interest (up to $2,500)
- HSA contributions
- Self-employment tax deduction (½ of SE tax)
- Health insurance premiums (self-employed)
AGI appears on Form 1040, Line 11. For help reading that form, see how to read Form 1040.
MAGI (Modified Adjusted Gross Income)
MAGI starts with AGI and adds back certain items. The exact add-backs depend on what you are calculating eligibility for — there is no single “MAGI” number on the tax return.
Common MAGI add-backs:
- Traditional IRA deduction
- Student loan interest deduction
- Foreign earned income exclusion
- Certain adoption expenses
Where MAGI Matters
| Tax Benefit | MAGI Threshold (2026, Single) | What Happens |
|---|---|---|
| Roth IRA eligibility | $153,000–$168,000 | Contribution limit phases out |
| Traditional IRA deductibility | Varies by plan coverage | Deduction phases out |
| Premium Tax Credit (ACA) | ~$60,000–$100,000+ | Subsidy amount decreases |
| Medicare IRMAA surcharge | Uses MAGI from 2 years prior | Part B/D premiums increase |
| Net Investment Income Tax | $200,000 | 3.8% surtax on investment income |
| Education credits | $80,000–$90,000 | AOTC phases out |
For most W-2 employees without foreign income or unusual deductions, AGI ≈ MAGI.
How to Lower Your MAGI
Because MAGI starts with AGI, anything that reduces AGI also reduces MAGI (except add-backs):
- Maximize 401(k) or Solo 401(k) deferrals — these come out before AGI is calculated
- Contribute to an HSA — deducted above the line
- Use a Donor-Advised Fund — does not lower MAGI directly, but can reduce taxable income through charitable bunching
- Tax-loss harvesting — realized losses offset capital gains, reducing AGI
For a comprehensive look at reducing your tax base, see the tax deductions everyone should know guide.
Related Reading
- Roth conversion basics
- Itemized deductions overview
- Standard deduction
- 401(k) to IRA rollover guide
- Backdoor Roth IRA — relies on MAGI being over the Roth limit
- Pro-rata rule — important when converting pre-tax IRA balances
How sharper.tax Helps
sharper.tax reads your AGI directly from your uploaded return and calculates the relevant MAGI for each strategy — Roth IRA eligibility, Traditional IRA deductibility, Medicare surcharges, and more. You never have to compute MAGI by hand. The tax code is complicated, but better tools have leveled the field.
Sources
- IRS Form 1040
- IRS Publication 590-A (Contributions to IRAs)
- IRS Publication 974 (Premium Tax Credit)
- IRS Notice 2025-67 (2026 Roth IRA phase-out limits)
The information above is educational and not tax advice.