Understanding Adjusted Gross Income (AGI)
Documents from the United States’ Internal Revenue Service typically use a great deal of specialized terminology. Encountering an unfamiliar word or term on a tax document can cause a great deal of frustration, particularly when you are nearing the tax filing deadline. Among taxpayers, one of the most common sources of confusion is the phrase “Adjusted Gross Income,” or AGI.
Our tax relief lawyers are ready to put their in-depth knowledge of tax law to work for you. When you have questions about your tax return, you don’t have to go it alone. Contact us as soon as possible to avoid making costly errors on your personal or business tax filings.
The Basics of AGI
To understand Adjusted Gross Income, it is necessary to understand the meaning of “gross income”. Essentially, any income you earn during the year is part of your gross, or total, income. However, not all of the income you earn is subject to taxation.
Adjusted Gross Income is your gross income minus any adjustments you qualify for. Generally, these adjustments are equivalent to tax deductions. Common deductions include:
- Tuition bills
- Alimony you pay (but not alimony you receive)
- Some IRA contributions
- Certain business costs
- Certain charitable contributions
There are numerous deductions that a person might qualify for and not know it. To avoid having too much of your income withheld by the IRS, it is important to calculate your AGI accurately.
If you are engaged in a dispute with the IRS, an experienced tax relief attorney may be able to help. Contact us today to discuss your situation and find out if we can help protect your financial interests.