Adjusted gross income
Certified Financial Planner glossary · Certified Financial Planner
Definition
Gross income less above-the-line adjustments; the pivot from which most phaseouts and floors are measured.
Adjusted gross income in plain English
Phaseouts for Roth IRA contributions, Medicare IRMAA brackets, and many credits all hinge on the same upstream number: AGI. Adjusted gross income is gross income minus above-the-line adjustments, and it is the pivot from which most phaseouts and floors are measured. Schedule A itemized deductions come later; they never rebuild AGI. When a stem mentions MAGI, begin with AGI, then layer only the add-backs that particular Code section requires. Keep AGI and taxable income mentally separate whenever a phaseout table appears.
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