Adjusted Gross Income is simply your total gross income minus specific deductions. Additionally, your Adjusted Gross Income is the starting point for calculating your taxes and determining your eligibility for certain tax credits and deductions that you can use to help you lower your overall tax bill.
What Is AGI?
Adjusted Gross Income, or AGI, starts with your gross income, and is then reduced by certain “above the line” deductions. Some common examples of deductions that reduce adjusted gross income include 401(k) contributions, health savings account contributions and educator expenses.
“So, What Is Adjusted Gross Income on Your W-2?”
The answer is – it’s not. However, we’ve heard this question before as taxpayers ask for help with their taxes. Let’s face it, tax terminology can get a little confusing. When it comes to talking about income, there are several terms that sound similar, but they have their own definitions and purposes. Understanding a bit more about these terms can help us better understand what Adjusted Gross Income is and what it isn’t.
- Gross Income – This includes all income received from all sources, and could include money, property, and the value of services received. Gross income is reduced by adjustments and deductions before taxes are calculated. Wages, tips, interest, dividends, rents and pension income are examples of sources that contribute to your gross income.
- Taxable Income – This is your AGI minus either the standard deduction or total of itemized deductions—whichever is greater and the qualified business income deduction if applicable. Your taxable income is what you’ll use to determine your tax bracket. Note, with changes from the Tax Cut and Jobs Act, personal and dependent exemptions, which may have lowered your taxable income, were eliminated from 2018 through 2025.
- Modified Adjusted Gross Income (MAGI) – This is your AGI plus a few adjustments added back in. Your Modified Adjusted Gross Income determines your eligibility for certain deductions, credits and retirement plans. Take note: there’s no fixed definition of MAGI as the adjustments vary, depending on the specific tax benefit.
Finding your prior-year adjusted gross income on your 1040
Your prior-year AGI can be used to validate your electronic return with the IRS. To locate your Adjusted Gross Income on Form 1040 from the previous year, you’ll need a copy of last year’s return. For 2020, you can find the amount listed on the following lines based on the form you used.
- If you filed Form 1040, your AGI will be listed on Line 11.
- If you filed Form 1040-NR, your AGI will be listed on Line 11.
How to find annual income
Sometimes when people ask about annual income, they may be thinking of their salary before or after taxes are taken out from their paychecks. You can find your annual income on your Form W-2 from your employer. If you’re looking for your AGI from last year, check out the next section.
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Investments Wages Retirement income Real estate
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If you’re e-filing your return, the IRS will verify your identity by using your personal tax information from the previous year. Specifically, when you file your return, the IRS compares these two things to see if they match:
- The prior-year adjusted gross income (AGI) you entered
- Your prior-year tax records
If these don’t match, the IRS will reject your return. In most cases, you can easily fix this issue and successfully e-file your return again.
How do you get your AGI from last year? You can locate your prior-year AGI on your 2020 return on Form 1040, Line 11.
How to Locate Your Previous Year AGI If You Don’t Have Access to Your Return
If you can’t find your prior-year AGI, you have a couple of options. You’ll need to request a copy of a return for 2020 from the IRS, which you can do any of these ways:
- View or download a transcript of your return online at www.irs.gov.
- Go to www.irs.gov and request a hard copy transcript of your return be mailed to you. This will take 5-10 business days.
- Call the IRS at 800-908-9946 and request a hard copy transcript be mailed to you. This will take 5-10 business days.
If you and your spouse filed jointly last year, your spouse’s AGI will be the same as yours. If your spouse had a different AGI, you’ll need his or her information to get their AGI from the IRS.