Adjusted gross income (AGI) is your total gross income (which includes all income from whatever source) minus certain above-the-line deductions.
Adjusted gross income is important because many deductions and credits are determined or limited by your AGI.
Note, however, that your adjusted gross income is still not your taxable income. Taxable income is arrived at only after you subtract personal exemptions and itemized deductions from your AGI.
Modified adjusted gross income (MAGI), on the other hand, is a different calculation of income determined by adding back certain items to your adjusted gross income.
Modified adjusted gross income determines eligibility for certain education deductions such as the Hope Scholarship Tax Credit, Lifetime Learning Tax Credit, Student Loan Interest Deduction, and Tuition and Fees Deduction.
MAGI is also used to determine traditional and Roth IRA eligibility and contribution levels.