Adjusted gross income (AGI) is the difference between annual gross income and certain qualified expenses.
Adjusted Gross Income
Also called: AGI
What is adjusted gross income?
Annual gross income is all the money a person earned in a year from salaries, wages, tips, dividends, capital gains, or interest. To calculate adjusted gross income, qualified adjustments are subtracted from annual income. Some of these qualified adjustments include educator expenses, health savings account, or HSA, deductions, or moving expenses for military members.
The IRS uses AGI to determine the amount of taxes a person owes.