As a small business owner, you have likely heard of the terms gross or net income. But, are you familiar with adjusted gross income? Learn what is adjusted gross income, how to calculate it, and uses for adjusted gross income below.

What does adjusted gross income mean?

Adjusted gross income, or AGI, is a person’s total gross income minus specific deductions or payments made throughout the year. Your adjusted gross income is the amount of money you receive each month that is subject to taxes. AGI is only used on individual tax returns.

Although AGI is typically referred to asnet income, they are not exactly the same. Whereas net income refers to after tax income, AGI is total taxable income.

Gross income vs. adjusted gross income

Although gross income and adjusted gross income may sound similar, they are very different. So,什么是总收入?

Gross income refers to thesalary or hourly扣除前由雇主设定的工资。年度总收入是在减去扣除扣除之前的一年中赚取的钱。

Unlike gross income, adjusted gross income is the total taxable income after deductions and other adjustments. Adjustments to gross income are specific expenses the IRS determines.

AGI deductions and credits

Typically, employers are required to deduct federal taxes from an individual’s paycheck, including Social Security and Medicare taxes. Depending on the state, employers may need to deduct state and local taxes, too. However, federal, state, andlocal taxesdon’t affect AGI.

除工资税外，其他可选扣除额可能还来自个人的薪水。在计算AGI之前，您必须扣除其他扣除，例如健康，生活，牙科和视力保险。

Other deductions and payments will also affect adjusted gross income. The deductions taken from gross income to calculate AGI are referred to as adjustments to income.

计算调整后的总收​​入

Now that you know what adjusted gross income is, you are probably wondering,How is adjusted gross income calculated?

Calculate AGI by first determining the total gross income. Gross income is the total of all the money earned during the calendar year, including annual wages, interest, and tips.

After you compute total gross income, deduct items such as IRA contributions or student loan interest to calculate AGI.

Example of calculating AGI

假设您在这一年中获得了50,000美元的工资和技巧。您的应税IRA分配总额为$ 1,000。您还拥有500美元的搬家费用，2,000美元的学生贷款利息和300美元的IRA捐款。

First, calculate gross income by adding together wages, tips, and taxable distributions.

Gross income = $50,000 + $1,000
Gross income = $51,000

Next, deduct the other payments, contributions, and expenses from gross income to calculate AGI.

AGI = $51,000 – $500 – $2,000 – $300
AGI= $48,200

Your AGI is $48,200.

Uses for adjusted gross income

AGI influences an individual’s tax bracket. And, it can determine if a person is eligible to claim additional deductions and credits when filing tax returns.

You may need to report AGI when applying for a loan or submitting paperwork to lenders. Lenders usually look at adjusted gross monthly income to see how much income a person has available to pay bills and purchase necessary items.

总收入可能会使申请人似乎可以负担得起贷款，而AGI则更清楚地了解了个人可以负担的负担。

Filing taxes using adjusted gross income

You report adjusted gross income onForm 1040, U.S. Individual Income Tax Return. Form 1040 is the only form that allows you to deduct every adjustment.

Taxpayers who don’t file Form 1040 will not have access to the full extent of credits and deductions that lower AGI.

Adjustments may lower any amount a person owes to the IRS at the end of the year, or make them eligible for a tax refund.

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This article has been updated from its original publication date of 1/21/2015.

This is not intended as legal advice; for more information, please点击这里。