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Mastering AGI Calculator: A Step-by-Step Guide to Adjusted Gross Income

AGI-Adjusted Gross Income Calculator

Agi Calculator

Wages, salary, tips:
Taxable interest:
Ordinary dividends:
Capital gains (losses):
Total IRA distributions - only the taxable amount:
Pensions, annuities - only the taxable amount:

* Include as "other" any income you may have received from your business; alimony; unemployment compensation; rental real estate; royalties, partnerships, S corporations and trusts; farm income; and any taxable Social Security benefits. Also include taxable refunds, credits, or offsets in state and local income tax.

Gross income does not include gifts and inheritances, tax-free Social Security benefits and tax-free interest from state or local bonds.

Deduct the following items:

IRA contributions:
Student loan interest:
Moving expenses:
One-half of self-employment tax:
Self-employed health insurance contribution:
Contributions to SEP, SIMPLE and qualified plans for yourself:

** Include as "other" any alimony paid, deductions for Archer Medical Savings Accounts, and penalties paid on early withdrawal of savings.

Total Gross Income:

Total Deductions:

AGI: $

AGI Calculator stands for Adjusted Gross Income Calculator. It is represented as the gross income subtracting adjustments to income. Generally, AGI starts with gross income, and then sudden adjustments are made in the gross salary. 

Features of AGI Calculator

  • Specific deductions: The calculation of AGI contains the deductions or certain expenses that are subtracted from the taxpayer’s gross income. These deductions reduce the amount of income that is subject to taxation.
  • Systematic: The AGI calculators are very methodical and organized. It carries out the calculations using dependable formulas and generative steps. The formula that AGI calculators use are agreed set of organized processes.
  • Reliable and convenient: It is easy to use and suitable for one’s purpose. With the help of a simple formula and some numerical quantities, you can find your required AGI.
  • Abstract concept: The AGI calculator provides the ability to understand the concept of AGI properly. The abstract concept doesn’t have any physical form but all the technical concepts and issues.
  • Determination of receivable amount: Within the calculations, you can find out the amounts of gross income and the expenses that need to be deducted from the gross income of an employee.

How to Calculate Adjusted Gross Income?

Adjusted Gross Income is calculated by using the given formula:

Adjusted Gross Income (AGI) = Gross income – Deductions


Gross Income: Gross income is the total amount of money you earn before any deductions or taxes are taken out.  It includes the following sources of revenue which are taxable in particular: Salary, wages, Interest, dividends, and earnings from royalties, partnerships, trusts, Social Security benefits, and Taxable state refunds.

Deductions: Deductions are reductions in the amount of money you need to pay or the income that gets taxed. There are two types of deductions:

  • Above-the-line deductions
  • Below-the-line deductions.

For example:

You’re supposed to get paid RS 60,000 monthly which is your gross income (GI) that is without deductions. But you’ve got above line deduction that is 500 for study materials expenses,2000 for health insurance, and 1000 for social security.

So mathematically,

AGI = 60000-(500+2000+1000)

       = 60000-3500

       = Rs.56500

Therefore, your total AGI ( Adjusted Gross Income) will be 56,500 after deductions.

What are above-the-line deductions in the Adjusted Gross Income?

The factors or deductions that you make from your gross income in the AGI calculator are also known as above-the-line deductions. The factors are as follows:

  • Education Expenses: Education expenses refers to the expense that you make to pay for your academic and educational fees. Education expenses are the numerous common deductions on above-the-line deductions as many people invest in education.
  • Security expenses: These expenses are made on job security as well as the social security of an individual as every social being needs security for them. Social security also concerns retirement income for almost every worker and government worker in Nepal especially.
  • Health and medication expenses: The health and medication expenses include the expenses made for hospital visits and doctor fees. It also includes payment for diagnosis, cure, mitigation, treatment, etc. Simply the medical bills and receipts for prescriptions are the above-line deduction.
  • Student loan expenses: Student loan expenses are those that cover expenditures for tuition fees, class fees, books, and other study materials. you can deduct specific amounts as student loans from the gross income.
  • Alimony paid: Alimony refers to the monetary support that a person gives their partner from whom they get separated and the order is offered by the court. So, this alimony amount is deducted from the gross income.
  • Transportation expenses: These expenses are the division of travel expenses that refer expressly to the cost of business transportation. The transportation can be local or national throughout the business dealings take place.

What are below-the-line deductions in the Adjusted Gross Income?

Below-the-line deductions are also known as itemized deductions. Here, you can itemize specific expense deductions of your choice. Some of the itemized deductions on the AGI calculator are Contributions made to charity, Casualty loss, and Out-of-pocket expenses.

Aside from the above-itemized deductions, there is a different section for less standard itemized deductions: Loss gain from gambling, Premium amortizable bond, and Work expenses incurred by disable.

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Frequently Asked Questions (FAQs):

How can I reduce my deductions?

The deductions that are included in your agi are all the above-line deductions. To reduce the deduction the expenses that you make should be controlled. Controlling expenses will help you reduce the deduction amounts.

How to calculate AGI?

To calculate AGI you need to subtract the deductions from your gross income.

What is the formula of AGI?

The formula of AGI is: Adjusted Gross Income(AGI)= Gross Income-sum of above-the-line deductions/Deductions

What does AGI stand for in finance?

AGI stands for Adjusted Gross Income.

Which is higher? Adjusted Gross Income or Net Income?

Generally adjusted gross income is higher because they are subject to taxes. Net income comes after the deductions but they are less subjected to taxes than AGI.

What is MAGI?

MAGI stands for Modified Adjusted Gross Income. It is the adjusted gross income plus a few items that need to be added back.


We can calculate AGI with the above given simple formula. The AGI calculator is more flexible than that of other calculators. We shouldn’t get involved in taxes and finances without having any important knowledge about them. Learning and gathering ideas on how to calculate the right portion of what you deserve is noteworthy. It is similar to a net salary calculator. There are many reasons AGI is important to make calculations. It is reliable and convenient.