What is MAGI income?
MAGI income or Modified Adjusted Gross Income your AGI (Adjusted Gross Income ) with certain deductions added back. According to the IRS, your MAGI is your AGI with the addition of the appropriate deductions, likely from following list of thirteen tax deductions :
- Student loan interest
- One-half of self-employment tax
- Qualified tuition expenses
- Tuition and fees deduction
- Passive loss or passive income
- IRA contributions
- Non-taxable social security payments
- The exclusion for income from U.S. savings bonds
- Foreign earned income exclusion
- Foreign housing exclusion or deduction
- The exclusion under 137 for adoption expenses
- Rental losses
- Any overall loss from a publicly traded partnership
How does MAGI income effect your taxes ?
Modified Adjusted Gross Income or MAGI, is used to determine if qualify for certain tax deductions.
For example , whether or not your contributions to an individual retirement plan (IRA ) are tax deductible, is dependent on your MAGI. In other words, MAGI is also used to determine your eligibility to contribute to a Roth IRA.
Similarly for Medicaid purpose , MAGI is a determining factor in Marketplace for determining eligibility for:
- Advance payments of the premium tax credit (APTC)
- Cost-sharing reductions (CSRs)
- Certain Medicaid eligibility groups
- The Children’s Health Insurance Program (CHIP)
Prashant Thakur Changed status to publish November 8, 2022
