What does AGI stand for?

AGI stands for Adjusted Gross Income. This term refers to an individual’s gross income after adjustments have been made, which can include deductions for contributions to retirement accounts, student loan interest, and various other allowable expenses.

Understanding AGI is crucial because it plays a significant role in determining eligibility for various tax credits and deductions. It serves as the basis for calculating taxable income after other deductions, such as the standard deduction or itemized deductions, have been applied. By recognizing AGI as Adjusted Gross Income, you'll be better equipped to navigate tax filings and understand its implications on overall tax liability.