Gross income minus specific adjustments (retirement contributions, HSA, student loan interest, etc.), before the standard or itemized deduction.
AGI is the number that gates many tax benefits — Roth IRA eligibility, capital-gains 0% bracket, and many credits phase out based on AGI, not gross income. Lowering AGI via pre-tax contributions can unlock benefits beyond the direct tax savings.
Example: $95,000 gross − $8,000 401(k) − $1,500 HSA = $85,500 AGI.
FAQ
What is AGI in simple terms?
AGI is the number that gates many tax benefits — Roth IRA eligibility, capital-gains 0% bracket, and many credits phase out based on AGI, not gross income. Lowering AGI via pre-tax contributions can unlock benefits beyond the direct tax savings.