modified adjusted gross income (MAGI)

Modified adjusted gross income (MAGI) begins with AGI (adjusted gross income) and adds back any deductions taken for foreign income and housing, student loans, self employment taxes, Individual Retirement Account (IRA’s), higher education costs and others. For most people, their AGI and MAGI will be the same because the deductions that are added back are uncommon. MAGI is used for determining eligibility for certain tax deductions such as contributions to an IRA, the eligibility to contribute to a Roth IRA, eligibility for education and other tax credits.