What Is Modified Adjusted Gross Income (MAGI) and How Is It Calculated?

Filing taxes often means encountering terms you don’t recognize—especially if you’re a first-time filer. One of the most important concepts to know is modified adjusted gross income (MAGI). 

Your adjusted gross income (AGI) is your total gross income (the amount from all your income sources before standard or itemized deductions are taken) minus specific adjustments. Your MAGI is your AGI with certain adjustments added back in. 

Keep reading to learn how to calculate your MAGI and why it matters so much for your taxes and overall financial situation. And remember: If you feel overwhelmed, TurboTax can calculate your MAGI automatically.

How to calculate MAGI

Here’s how to calculate modified adjusted gross income in three steps: 

1. Determine your gross income: Add up all taxable income for the year, such as wages, salaries, tips, qualified alimony, dividends, interest, capital gains, and income from your retirement account, farm, rental property, business, or royalty agreement. 
2. Calculate your AGI: Subtract select expenses from your gross income, including, but not limited to, educator expenses, half of your self-employment taxes, your health insurance premiums (if you’re self-employed), student loan interest, and deductable retirement contributions. 
3. Calculate your MAGI: Add back certain deductions. Combine your AGI with certain deductions you previously took. The deductions, or adjustments you need to add back depend on the reason for MAGI. 

As an example, for the Child Tax Credit, excluded foreign income and housing, including Puerto Rico and American Samoa are added back.While calculating the Premium Tax Credit, you add nontaxable Social Security, foreign earned income, and tax-exempt interest. Other common deductions that are added back in the calculation of MAGI include student loan interest, half of the self-employment tax, and employer-provided adoption benefits.

Sound complicated? Don’t worry. If you use TurboTax to prepare your tax return, it’ll automatically calculate your MAGI for you.

Calculating your MAGI

Let’s look at an example calculation. Suppose you earned $50,000 at your full-time job and $25,000 in wages at your part-time job. Your gross income is $75,000. 

To determine your AGI, you subtract $1,000 in student loan interest and $3,000 in traditional IRA contributions. Your AGI is $71,000. 

Let’s say you want to calculate your MAGI to see if you can deduct your traditional IRA contributions on your tax return. You’d need to add your student loan interest and traditional IRA contributions back into the equation, resulting in a MAGI of $75,000. Since your MAGI is below the eligibility limit, you qualify for a full deduction of your traditional IRA contributions. 

Don’t want to do the math yourself? Don’t worry. TurboTax will calculate your MAGI for you. All it takes is a few clicks and keystrokes.

Where to find MAGI on your tax return

You won’t find your MAGI listed on your tax return. Instead, you’ll use your AGI (found on line 11 of Form 1040) to calculate it.  

Remember, you can determine your MAGI with this basic formula: 

MAGI = AGI + select deductions added back in

Why MAGI matters for taxes

Your modified adjusted gross income is important because the Internal Revenue Service (IRS) uses this amount to determine if you qualify for specific tax benefits. Here are some of those benefits and the corresponding MAGI limits for eligibility in 2024 and, where available, the 2025 tax year:  

Roth individual retirement account (IRA) contributions 

• Single filers: MAGI must be under $161,000 to contribute (2024 tax year); $165,000 (2025) 
• Married filing jointly: MAGI must be less than $240,000 (2024); $246,000 (2025) 

Traditional IRA deductions when covered under a retirement plan

• Single filers: MAGI must be less than $87,000 to deduct traditional IRA contributions (2024); $89,000 (2025) 
• Married filing jointly: MAGI must be under $143,000; $146,000 (2025) 

American Opportunity Tax Credit (AOTC) and Lifetime Learning Credit (LLC)

• Single filers: You’re eligible for these education tax credits with a MAGI of less than $90,000 (2024) 
• Married filing jointly: MAGI must be under $180,000 (2024) 

Premium Tax Credit (subsidy for health insurance purchased through the Marketplace)

Generally, your MAGI must be less than 400% of the federal poverty level for your family size to qualify for this tax credit. However, recent legislative changes have expanded eligibility through the 2025 tax year, allowing those with higher incomes to qualify.  

Child Tax Credit

• Single filers: Your MAGI must be under $200,000 to qualify (2024 and 2025).  
• Married filing jointly: If you’re married and filing jointly, the limit doubles. 

Adoption Credit

• Your MAGI must be less than $292,150 to claim this tax credit (2024); $299,190 (2025). 

Student loan interest deduction

• Single filers: Your MAGI must be under $95,000 to qualify (2024); $100,000 (2025). 
• Married filing jointly: MAGI must be less than $195,000 (2024); $200,000 (2025). 

Income-Related Monthly Adjustment Amount – IRMAA (impacts Medicare Part B premiums)

• Single filers: For 2024, if your MAGI is $103,000 or less, you pay the standard premium. Premiums increase in tiers as MAGI rises, with the highest tier for those with MAGI above $500,000. 
• Married filing jointly: For 2024, the standard premium applies for MAGI $206,000 or less, with similar tiered increases for higher MAGI levels. 

Many of these tax breaks have a phase-out element, which means you may qualify for full or partial benefits depending on where your MAGI falls on the eligibility scale.  Let’s say you’re filing single and want to deduct your traditional IRA contributions, for example. If your MAGI for the 2025 tax year is less than $79,000, you can deduct your full contribution (up to that tax year’s limit). However, if your MAGI exceeds $89,000, you can’t deduct any amount. But, if your MAGI falls between the two numbers, you can deduct a portion of your contribution.

How TurboTax helps you calculate MAGI and maximize your tax benefits

Hopefully, you have a better understanding of what MAGI is, how it works, and why it’s an important number for your taxes and financial health. However, you don’t need to worry about knowing these tax rules.  

TurboTax will determine your modified adjusted gross income with just a few clicks. The software does all the heavy lifting, calculating your MAGI based on the tax forms you import and your answers to basic questions. TurboTax takes the guesswork out of filing taxes, helps you get every tax benefit you qualify for, and guarantees the accuracy of its calculations. Whether you file solo or get help from a tax pro, TurboTax tax software takes the stress out of tax season. Get started today!