What Is Modified Adjusted Gross Income?

Also known by its acronym MAGI, the modified adjusted gross income is figured by adding back to your Adjusted Gross Income (AGI) specific benefits, exclusions, and deductions, such as any tuition and fees deduction, that were taken in the determination of the AGI.

The MAGI allows the IRS to compute whether a taxpayer is eligible for certain deductions, credits or retirement plans such as:

  • The IRA deduction
  • The Tuition & Fees deduction
  • The Student Loan & Interest deduction
  • The Hope Scholarship tax credit
  • The Lifetime Learning tax credit


  • Determination of the MAGI is of critical importance for taxpayers who contribute to or intend to deduct from a Traditional or Roth IRA. The amount of your modified AGI, if it falls above certain threshold limits set by the IRS, may render ineligible to contribute to a Roth IRA or deduct your IRA contributions on your tax return.

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