Difference between revisions of "Modified Adjusted Gross Income"

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(Update several links to tax year 2020)
 
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==MAGI for child tax credit / credit for other dependents==
 
==MAGI for child tax credit / credit for other dependents==
Child Tax Credit (CTC), Credit for Other dependents (ODC). See {{cite web |url=https://www.irs.gov/publications/p17#en_US_2019_publink1000174526|title=Publication 17, Your Federal Income Tax|work=32. Child Tax Credit/Credit for Other Dependents|author=<!--Not stated--> |date=2019 |website= |publisher= Internal Revenue Service|access-date= March 29, 2020|quote=}}
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Child Tax Credit (CTC), Credit for Other dependents (ODC). See {{cite web |url=https://www.irs.gov/publications/p972#en_US_2020_publink100012086 |title=Publication 972 (2020), Child Tax Credit and Credit for Other Dependents|author=<!--Not stated--> |date=2020 |website= |publisher= Internal Revenue Service|access-date= April 20, 2021|quote=}}
  
 
==MAGI for education credit purposes==
 
==MAGI for education credit purposes==
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==MAGI for Roth IRA purposes==
 
==MAGI for Roth IRA purposes==
See {{cite web |url=https://www.irs.gov/publications/p590a#en_US_2019_publink1000230985 |title=Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs) |work=Modified AGI.|author=<!--Not stated--> |date=2019 |website= |publisher= Internal Revenue Service|access-date= March 29, 2020|quote=}}
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See {{cite web |url=https://www.irs.gov/publications/p590a#en_US_2020_publink1000230985 |title=Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs) |work=Modified AGI.|author=<!--Not stated--> |date=2020 |website= |publisher= Internal Revenue Service|access-date= April 20, 2021|quote=}}
  
 
==MAGI for net investment income tax==
 
==MAGI for net investment income tax==
See Form 8960 {{cite web |url=https://www.irs.gov/instructions/i8960#idm139700582645360 |title=Net Investment Income Tax—Individuals, Estates, and Trusts|work=Line 13—Modified Adjusted Gross Income (MAGI)|author=<!--Not stated--> |date=2019 |website= |publisher= Internal Revenue Service|access-date= March 29, 2020|quote=}}
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See Form 8960 {{cite web |url=https://www.irs.gov/instructions/i8960#idm139952759144000 |title=Net Investment Income Tax—Individuals, Estates, and Trusts|work=Line 13—Modified Adjusted Gross Income (MAGI)|author=<!--Not stated--> |date=2019 |website= |publisher= Internal Revenue Service|access-date= April 20, 2021|quote=}}
  
 
==MAGI for premium tax credit==
 
==MAGI for premium tax credit==
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==MAGI for rental passive loss allowance==
 
==MAGI for rental passive loss allowance==
See {{cite web |url=https://www.irs.gov/publications/p925#en_US_2019_publink1000104575 |title=Publication 925, Passive Activity and At-Risk Rules|work=Phaseout rule.|author=<!--Not stated--> |date=2019 |website= |publisher= Internal Revenue Service|access-date= March 29, 2020|quote=}}
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See {{cite web |url=https://www.irs.gov/publications/p925#en_US_2020_publink1000104575 |title=Publication 925, Passive Activity and At-Risk Rules|work=Phaseout rule.|author=<!--Not stated--> |date=2020 |website= |publisher= Internal Revenue Service|access-date= April 20, 2021|quote=}}
  
 
==MAGI for student loan interest deductibility==
 
==MAGI for student loan interest deductibility==
See {{cite web |url=https://www.irs.gov/publications/p970#en_US_2019_publink1000204395 |title=Publication 970, Tax Benefits for Education |work=Modified adjusted gross income (MAGI).|author=<!--Not stated--> |date=2019 |website= |publisher= Internal Revenue Service|access-date= March 29, 2020|quote=}}
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See {{cite web |url=https://www.irs.gov/publications/p970#en_US_2020_publink1000204395 |title=Publication 970, Tax Benefits for Education |work=Modified adjusted gross income (MAGI).|author=<!--Not stated--> |date=2020 |website= |publisher= Internal Revenue Service|access-date= April 20, 2021|quote=}}
  
 
==MAGI for Medicare premiums (IRMAA tiers)==
 
==MAGI for Medicare premiums (IRMAA tiers)==

Latest revision as of 21:58, 20 April 2021

Flag of the United States.svg.png This article contains details specific to United States (US) investors. It does not apply to non-US investors.

Modified Adjusted Gross Income (MAGI) is a calculation that starts with one's Adjusted Gross Income and then applies various modifications to that amount.

There are multiple versions of MAGI, and one should take care to use the applicable modifications.

MAGI for Affordable Care Act purposes

See "What to include as income". See what’s included in MAGI and how to estimate it. HealthCare.gov. 2019. Retrieved July 16, 2019.

MAGI for child tax credit / credit for other dependents

Child Tax Credit (CTC), Credit for Other dependents (ODC). See "Publication 972 (2020), Child Tax Credit and Credit for Other Dependents". Internal Revenue Service. 2020. Retrieved April 20, 2021.

MAGI for education credit purposes

See "Education Credits: Questions and Answers". Q13. What is "modified adjusted gross income" for the purpose of the AOTC?. Internal Revenue Service. February 8, 2019. Retrieved July 16, 2019.

MAGI for traditional IRA purposes

See "Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs)". Modified adjusted gross income (AGI). Internal Revenue Service. 2020. Retrieved April 13, 2021.

MAGI for Roth IRA purposes

See "Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs)". Modified AGI. Internal Revenue Service. 2020. Retrieved April 20, 2021.

MAGI for net investment income tax

See Form 8960 "Net Investment Income Tax—Individuals, Estates, and Trusts". Line 13—Modified Adjusted Gross Income (MAGI). Internal Revenue Service. 2019. Retrieved April 20, 2021.

MAGI for premium tax credit

See "Questions and Answers on the Premium Tax Credit". 8. What is household income?. Internal Revenue Service. Feb 8, 2019. Retrieved July 16, 2019.

MAGI for rental passive loss allowance

See "Publication 925, Passive Activity and At-Risk Rules". Phaseout rule. Internal Revenue Service. 2020. Retrieved April 20, 2021.

MAGI for student loan interest deductibility

See "Publication 970, Tax Benefits for Education". Modified adjusted gross income (MAGI). Internal Revenue Service. 2020. Retrieved April 20, 2021.

MAGI for Medicare premiums (IRMAA tiers)

This MAGI is defined in 42 U.S.C. 1395r(i)(4), from the Social Security Act §1839:
(4) Modified adjusted gross income.
(A) In general.—For purposes of this subsection, the term “modified adjusted gross income” means adjusted gross income (as defined in section 62 of the Internal Revenue Code of 1986)—
(i) determined without regard to sections 135, 911, 931, and 933 of such Code; and
(ii) increased by the amount of interest received or accrued during the taxable year which is exempt from tax under such Code.

The words "determined without regard to" mean that any income not included in Form 1040 Adjusted Gross Income (AGI) due to those code sections must be added to AGI to calculate MAGI for the IRMAA tiers.
26 U.S. Code § 135 refers to income from U.S. savings bonds used to pay higher education tuition and fees.
26 U.S. Code § 911 refers to income from citizens or residents of the United States living abroad.
26 U.S. Code § 931 refers to income from sources within Guam, American Samoa, or the Northern Mariana Islands.
26 U.S. Code § 933 refers to income from sources within Puerto Rico.

Many web sites have incomplete information about this MAGI. For example, "Medicare Premiums: Rules For Higher-Income Beneficiaries". Social Security Administration. 2020. Retrieved July 20, 2020. mentions the tax-exempt interest but neglects to mention the necessary addition of the foreign items or income from US Savings bonds used to pay higher education tuition and fees.

The untaxed portion of Social Security benefits is not included in the MAGI calculation for IRMAA.

External links