Tax Strategies & Credits

Tax Terms: Adjusted Gross Income (AGI)

Tax Terms: Adjusted Gross Income (AGI)

The term "adjusted gross income," or AGI refers to a calculation that is done to determine whether a taxpayer is entitled to take advantage of specific tax benefits, adjustments and deductions. The calculation is done by calculating the individual's income, then subtracting such items as self-employment retirement plans, contributions to IRAs, job-related moving expenses and penalties paid for early withdrawal from a savings account. These adjustments are separate and apart from standard or itemized deductions. It is important to calculate the AGI correctly, as specific deductions and credits are not available to taxpayers whose AGI exceeds certain limits.

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Lee Reams, BSME, EA

Lee Reams, BSME, EA

Editor-in-Chief

Besides his role at CountingWorks as an educator and speaker to thousands of accountants nationwide, Lee manages a technical research service for a large group of tax accountants which sharpens his technical skills. Lee served on the Board of Blackline Systems, is a former Board of Director for the California Tax Education Council, is a Past President of the San Fernando Valley Chapter of Enrolled Agents, Member and Past Director for the California Society of Enrolled Agents.

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