Adjusted Gross Income (AGI) in taxes is your total gross income from all sources minus specific allowable adjustments or deductions. Gross income includes wages, tips, interest, dividends, capital gains, business income, retirement income, and other taxable income. From this total, you subtract certain deductions such as student loan interest, alimony payments, educator expenses, deductible IRA contributions, and other qualified expenses listed on IRS Form 1040 Schedule 1. The resulting figure is your AGI, which is used as the basis for calculating your taxable income after further deductions like the standard or itemized deductions are applied
. AGI is important because it determines eligibility for various tax credits and deductions, affects your tax liability, and is also used by banks, government agencies, and others to assess qualification for loans, benefits, or programs such as income-driven student loan repayment plans
. You can find your AGI on line 11 of IRS Form 1040, and tax software typically calculates it automatically when you file your return
