What Does AGI Stand For?

What does AGI stand for on a tax return?

Each word in adjusted gross income tells part of the story:

• Gross income: money you received during the year, such as wages, tips, interest, business profit, rental income and retirement withdrawals.
• Adjusted: certain amounts are subtracted before any deductions. These "adjustments to income" are sometimes called above the line deductions.
• Income: the result is a single figure that stands for your income in the eyes of the tax rules.

Common adjustments include contributions to a traditional IRA when they are deductible, contributions to a health savings account, student loan interest, half of self employment tax and educator expenses for teachers. The exact list and limits come from the IRS and can change.

From gross income to taxable income

It helps to see AGI as a middle step, not the final answer.

1. Add up your gross income.
2. Subtract adjustments to income. The result is your AGI.
3. Subtract either the standard deduction or your itemized deductions.
4. What remains is taxable income, which is the amount your tax rate applies to.

Because AGI sits before deductions, two people with the same salary can have different AGIs if one saves into a retirement account or pays student loan interest.

Where your AGI matters

Many rules look at AGI or a close cousin of it, so the number travels far beyond the return itself.

• Tax credits and deductions: some phase out as AGI rises, and some medical expense deductions depend on a share of AGI.
• Identity check when e-filing: tax software often asks for last year's AGI to confirm it is really you.
• Student aid: college aid forms pull income figures from tax returns.
• Health coverage: marketplace subsidies and some programs use modified adjusted gross income, or MAGI.

MAGI starts with AGI and adds back certain items, and the add backs differ by program. When a form asks for MAGI, follow that form's own instructions.

AGI in computing research

In science and tech coverage, AGI stands for artificial general intelligence. The phrase describes a hoped for or feared future system that could handle a wide range of thinking tasks at or beyond a human level, rather than doing one narrow job well. Researchers do not agree on an exact definition, how to test for it or when, if ever, it might exist.

You can usually tell the meaning from context. "Enter your prior year AGI" is a tax prompt. "The lab says its goal is AGI" is the computing sense.

How to say and write it

Read it letter by letter, "A G I." Because A is pronounced "ay," use an in front of it: "an AGI of 55,400" and "an AGI limit." No periods are needed. The plural, if you ever need it, is AGIs.

On a tax form the full term is usually written in lowercase in running text, "adjusted gross income," with the initials in parentheses on first use.

Mixups to avoid

• AGI vs gross income: gross is everything before adjustments. AGI is after them.
• AGI vs taxable income: taxable income comes after deductions, so it is usually lower.
• AGI vs take home pay: take home pay is what lands in your bank account after withholding. AGI is a yearly tax figure.
• AGI vs MAGI: MAGI adds certain items back to AGI for specific programs.

Tax and finance letters beyond this one sit on the business acronyms hub.