what is adjusted gross income

Adjusted Gross Income (AGI) is an individuals total gross income minus specific deductions. It is used to calculate taxable income, which is AGI minus allowances for personal exemptions and itemized deductions. In the United States, AGI is more relevant than gross income for most individual tax purposes. Gross income includes all income from various sources, such as wages, interest, dividends, business income, rental income, and more. AGI is calculated by subtracting certain adjustments from gross income, such as business expenses, student loan interest payments, and other expenses.