Updated June 16, 2026 · 6 min read
Adjusted gross income (AGI) is your total income for the year minus a handful of specific deductions the IRS calls *adjustments*. It sits in the middle of the tax math: gross income → minus adjustments → AGI → minus your standard or itemized deduction → taxable income. AGI matters because it decides how much tax you owe *and* whether you qualify for many credits and deductions. Here's how to find it and why it's the most important number on your return.
So your tax isn't calculated on your full salary — it's calculated on taxable income, which is usually thousands less than what you earn.
Once you have taxable income, the federal brackets apply in slices — each portion is taxed at its own rate. Here's how a $90,000 salary lands after the standard deduction:
How $90,000 of income is taxed — single filer, 2026 brackets
| Rate | Income taxed here | Tax |
|---|---|---|
| 10% | $12,400 | $1,240 |
| 12% | $38,000 | $4,560 |
| 22% | $23,500 | $5,170 |
Total federal income tax: $10,970. Your marginal rate is 22% (the top bracket), but your effective rate is just 12.2% — because only the top slice is taxed at the top rate.
| Term | What it is | Used for |
|---|---|---|
| AGI | Total income minus adjustments | Your tax base; eligibility thresholds |
| MAGI | AGI with certain deductions added back | Roth IRA limits, premium credits, IRA deductibility |
| Taxable income | AGI minus standard/itemized deduction | The number the tax brackets apply to |
On a filed federal return, AGI is on Form 1040, line 11. You'll need last year's AGI to e-file (the IRS uses it to verify your identity) and often to apply for loans or financial aid.
AGI is your total gross income minus specific 'above-the-line' adjustments such as 401(k) and HSA contributions, student loan interest, and self-employment tax. It's the starting point for calculating taxable income and determines eligibility for many credits.
Add up all your income (wages, interest, dividends, side income), then subtract adjustments like traditional 401(k)/IRA contributions, HSA contributions, and student loan interest. The result is your AGI.
AGI is your income after adjustments but before your standard or itemized deduction. Taxable income is AGI minus that deduction — it's the number the tax brackets are actually applied to.
On the federal Form 1040, your AGI is on line 11. You often need your prior-year AGI to e-file your taxes.
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