How to calculate AGI for taxes? Working through a specific example
I'm really confused about calculating my Adjusted Gross Income and can't find a clear explanation anywhere. So here's what I'm trying to figure out - your AGI is your gross income minus deductions, right? Let's use a specific example to make sure I understand: Say my gross income is $230k for the year. I've had about $78k taken out for various taxes throughout the year. Then I have around $9,800 in various deductions. So would my AGI be $220,200 (gross income minus deductions)? Or would it be $142,200 (gross income minus taxes and deductions)? Also, does it matter if the deductions are pre-tax or post-tax? Are all deductions treated the same way when calculating AGI or do I need to handle them differently? Sorry if this is a basic question, but I keep getting confused when trying to do my taxes!
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Jamal Harris
AGI (Adjusted Gross Income) is your total gross income minus specific adjustments, but it does NOT include taxes withheld from your paycheck or standard/itemized deductions. In your example, if your gross income is $230k, your AGI would be $230k minus only certain qualifying adjustments like student loan interest, HSA contributions, traditional IRA contributions, etc. Those $9,800 in deductions you mentioned would count toward AGI only if they're "above-the-line" deductions (adjustments to income). The $78k in taxes you paid throughout the year doesn't factor into AGI calculation at all - that's completely separate. Pre-tax deductions like traditional 401(k) contributions or health insurance premiums typically reduce your W-2 income already, so they're factored in before you even start AGI calculations. Post-tax deductions usually come into play after AGI, as part of itemized deductions.
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Mei Chen
•Wait I'm still confused. So if I have a W-2 that shows $85k in Box 1 (Wages, tips, other compensation), and I contributed $6k to a traditional IRA, would my AGI be $79k? Or does the W-2 Box 1 amount already account for some pre-tax deductions?
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Jamal Harris
•Box 1 on your W-2 already has certain pre-tax deductions removed (like 401k, health insurance premiums, etc.). So if your Box 1 shows $85k and you contributed $6k to a traditional IRA, your AGI would indeed be $79k. The W-2 Box 1 amount already reflects reductions for pre-tax deductions that your employer administers. But IRA contributions are deducted separately because you make those on your own, not through employer withholding. That's why IRA contributions are one of those "adjustments to income" that reduce your AGI on your tax return.
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Liam Sullivan
I was super confused about AGI calculations too until I found https://taxr.ai which really helped me understand my specific situation. I had similar questions about pre-tax vs post-tax deductions and what actually counts toward AGI. I uploaded my tax documents and it broke everything down step by step, showing exactly which of my deductions were affecting my AGI and which weren't. It explained that things like my 401k contributions were already reducing my W-2 income, while my student loan interest was a separate adjustment. It saved me from a pretty big mistake I was about to make on my taxes related to misunderstanding my AGI calculation.
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Amara Okafor
•Does it actually explain HOW it's calculating things or just give you the final numbers? I'm trying to actually understand this stuff rather than just getting an answer.
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CosmicCommander
•Is this actually helpful for someone with more complicated tax situations? I have W-2 income plus some 1099 work, rental property, and a bunch of stock sales. Would it handle all that correctly?
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Liam Sullivan
•It actually walks through the calculations step by step and explains each part. You can see exactly which numbers are being added or subtracted and why. It's not just giving final numbers - it breaks down the AGI formula specific to your situation with explanations for each line. For complicated tax situations like yours with multiple income sources, it definitely handles that well. I have W-2 income plus some side gig 1099 work, and it correctly explained how my Schedule C deductions affected my AGI versus my itemized deductions. It's particularly good at showing how different types of income and deductions affect your AGI differently.
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CosmicCommander
Just wanted to follow up - I tried taxr.ai after our conversation here and it was actually super helpful for my complicated tax situation! It clearly showed me that my rental property depreciation was reducing my AGI, but my mortgage interest on that property was an itemized deduction that didn't affect AGI. It also caught that I was calculating my home office deduction incorrectly which was throwing off my AGI numbers. The walkthrough of exactly how my 1099 income, business expenses, and capital gains all affected my AGI differently was really clear. Definitely worth checking out if you're confused about AGI calculations like I was.
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Giovanni Colombo
If anyone is struggling to get answers directly from the IRS about AGI calculations, I used https://claimyr.com to actually get through to an IRS agent. I was on hold for hours trying to get clarification about some specific AGI deductions before I found this service. The video walkthrough (https://youtu.be/_kiP6q8DX5c) shows how it works. I was skeptical at first, but they got me connected to an IRS rep in about 15 minutes when I had been trying for days. The agent was able to answer my specific questions about which of my deductions were affecting my AGI calculation.
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Fatima Al-Qasimi
•How does this even work? The IRS phone system is completely broken. I tried calling last week and couldn't get through at all.
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Dylan Cooper
•This sounds like complete BS. Nothing can get you through to the IRS faster. I've tried everything and ended up just guessing on my return because I couldn't get answers.
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Giovanni Colombo
•It works by using their system that continuously redials and navigates the IRS phone tree until it gets through. Then it calls you once it has an agent on the line. The IRS phone system hangs up if the queue is too full, but this keeps trying during less busy times until it connects. I was extremely skeptical too, that's why I mentioned it. I literally spent 3 days trying to get through about my AGI calculation question, getting disconnected each time. I used this as a last resort and had an actual IRS agent on the phone within 20 minutes who explained exactly how my specific situation affected my AGI.
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Dylan Cooper
I have to admit I was completely wrong about Claimyr. After posting that skeptical comment, I was desperate enough to try it anyway since I needed to figure out if my home equity loan interest was an AGI deduction or itemized deduction. Got connected to an actual IRS agent in about 30 minutes who confirmed it's an itemized deduction that doesn't affect AGI calculation. The agent also explained exactly which of my deductions were "above-the-line" adjustments that reduce AGI versus "below-the-line" deductions that don't. Saved me from making a $2,300 mistake on my taxes by miscalculating my AGI. Definitely worth it for complex AGI questions the IRS website doesn't clearly answer.
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Sofia Ramirez
Just to simplify AGI calculation: 1. Start with ALL income (wages, 1099, interest, dividends, capital gains, etc) 2. Subtract ONLY "above-the-line" deductions: - Traditional IRA contributions - Student loan interest - HSA contributions - Self-employed health insurance - SEP/SIMPLE/401k contributions for self-employed - Alimony paid (for pre-2019 divorces) - Educator expenses - Some business expenses Taxes withheld throughout the year have NOTHING to do with AGI. And standard/itemized deductions come AFTER AGI calculation.
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Dmitry Volkov
•What about 401k contributions through my employer? And health insurance premiums? I'm confused if those count as "above-the-line" deductions or not.
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Sofia Ramirez
•Employer 401k contributions and pre-tax health insurance premiums are already excluded from your W-2 Box 1 wages. They've already reduced your reported income before you even start calculating AGI. That's why they don't appear as separate "above-the-line" deductions on your tax return - they've already been accounted for. This is different from things like traditional IRA contributions which you make separately from your paycheck, so those need to be deducted as a specific adjustment to income.
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StarSeeker
One thing that helped me understand AGI is looking at the 1040 form itself. If you look at the first page of your 1040, everything above the "adjusted gross income" line (line 11 on recent forms) is part of the AGI calculation. This includes all your income sources at the top, then all those adjustments/deductions in the "Income" section. Anything listed in the "Adjusted Gross Income" section gets subtracted to arrive at your final AGI. Standard/itemized deductions and qualified business income deductions all come AFTER the AGI line, so they don't affect AGI calculation at all.
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Zoe Stavros
•Thank you SO MUCH to everyone who responded. This makes so much more sense now. So in my original example with $230k gross income and $9,800 in deductions, my AGI would depend on WHICH deductions those are. If those $9,800 were all "above-the-line" deductions like traditional IRA, HSA, etc., then my AGI would be $220,200. But if some of those deductions were itemized deductions like mortgage interest or charitable donations, those wouldn't affect my AGI at all. And the $78k in taxes I paid throughout the year is completely irrelevant to AGI calculation. This clears up my confusion completely!
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