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What is modified adjusted gross income (MAGI)?
Modified adjusted gross income (MAGI) is your adjusted gross income (AGI) with certain deductions added back in. It can be used to determine if you qualify for particular tax deductions, Medicaid and other government programs.
What is MAGI used for?
Knowing your MAGI can help you figure out if you are eligible to:
Deduct your traditional IRA contributions.
Contribute to a Roth IRA.
Take the premium tax credit.
Traditional IRA deductions
If you (or both you and your spouse) are not covered by a workplace retirement plan, you can take the full IRA deduction when you file your annual return. However, for those with employer-sponsored retirement plans, your modified adjusted gross income determines whether you're eligible for this deduction and how much you can take.
For instance, let's say you’re filing 2023 taxes as a single person, you have a workplace retirement plan, and you contributed $6,500, the maximum amount allowed, to a traditional IRA. If your MAGI was $73,000 or less, you could deduct that full $6,500 from your taxable income.
The table below shows how deductions change based on filing status and MAGI.
Traditional IRA deduction limits 2023-2024
Filing status | 2023 income range | 2024 income range | Deduction limit |
|---|---|---|---|
Single or head of household (and covered by retirement plan at work) | $73,000 or less. | $77,000 or less. | Full deduction. |
More than $73,000, but less than $83,000. | More than $77,000, but less than $87,000. | Partial deduction. | |
$83,000 or more. | $87,000 or more. | No deduction. | |
Married filing jointly (and covered by retirement plan at work) | $116,000 or less. | $123,000 or less. | Full deduction. |
More than $116,000, but less than $136,000. | More than $123,000, but less than $143,000. | Partial deduction. | |
$136,000 or more. | $143,000 or more. | No deduction. | |
Married filing jointly (spouse covered by retirement plan at work) | $218,000 or less. | $230,000 or less. | Full deduction. |
More than $218,000, but less than $228,000. | More than $230,000, but less than $240,000. | Partial deduction. | |
$228,000 or more. | $240,000 or more. | No deduction. | |
Married filing separately (you or spouse covered by retirement plan at work) | Less than $10,000. | Less than $10,000. | Partial deduction. |
$10,000 or more. | $10,000 or more. | No deduction. |
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Roth IRA contributions
Knowing your MAGI also lets you figure out whether – or how much – you can contribute to a Roth IRA.
A Roth IRA is an account that lets you contribute money after you've paid taxes on it, and distributions in retirement are tax-free. To contribute to a Roth IRA, you have to meet certain income limits, which are based on your modified adjusted gross income. Contributions are reduced, or not allowed, at certain income levels.
The below charts outline Roth IRA contribution limits for tax year 2023 (taxes filed in 2024) and limits for tax year 2024 (taxes filed in 2025).
2023 Roth IRA income and contribution limits
Filing status | Roth IRA income limits | Roth IRA contribution limits 2023 |
|---|---|---|
Single, head of household, or married, filing separately (if you didn't live with spouse during year) | Less than $138,000. | $6,500 ($7,500 if 50 or older). |
More than $138,000, but less than $153,000. | Contribution is reduced. | |
$153,000 or more. | No contribution allowed. | |
Married filing jointly or qualifying widow(er) | Less than $218,000. | $6,500 ($7,500 if 50 or older). |
More than $218,000, but less than $228,000. | Contribution is reduced. | |
$228,000 or more. | No contribution allowed. | |
Married filing separately (if you lived with spouse at any time during year) | Less than $10,000. | Contribution is reduced. |
$10,000 or more. | No contribution allowed. |
2024 Roth IRA income and contribution limits
Filing status | Roth IRA income limits | Roth IRA contribution limits 2024 |
|---|---|---|
Single, head of household, or married, filing separately (if you didn't live with spouse during year) | Less than $146,000. | $7,000 ($8,000 if 50 or older). |
More than $146,000, but less than $161,000. | Contribution is reduced. | |
$161,000 or more. | No contribution allowed. | |
Married filing jointly or qualifying widow(er) | Less than $230,000. | $7,000 ($8,000 if 50 or older). |
More than $230,000, but less than $240,000. | Contribution is reduced. | |
$240,000 or more. | No contribution allowed. | |
Married filing separately (if you lived with spouse at any time during year) | Less than $10,000. | Contribution is reduced. |
$10,000 or more. | No contribution allowed. |
» Learn more about the 2023 and 2024 Roth IRA income limits
Premium tax credit eligibility
Another thing MAGI is used for is to determine eligibility for the premium tax credit. The premium tax credit is a refundable tax credit available to taxpayers who have purchased a health insurance plan from the health insurance marketplace.
MAGI vs. AGI: What's the difference?
Your AGI, adjusted gross income, is your total income minus any eligible deductions. Your MAGI, modified adjusted gross income, is just your AGI with certain deductions added back, such as student loan interest, foreign-earned income and housing exclusions, and employer adoption benefits, among other things. The numbers may be close, and they may even be the same in some cases.
How to calculate your modified adjusted gross income
Figuring out your MAGI can be complicated, but you can break it down into three steps:
Figure out your gross income.
Find your adjusted gross income.
Add back certain deductions particular to MAGI.
It may seem like you are subtracting certain items only to add them back again, but because there may be some difference between the two figures it’s important to go through the exercise — even if your AGI and your MAGI end up as the same number.
1. Figure out your gross income
Your gross income is all the money you earn, including a salary from a job, capital gains from selling a house or stocks, interest or retirement income, and even unemployment benefits.
2. Find your adjusted gross income
Your adjusted gross income, or AGI, is your gross income minus certain amounts. Some of the most common adjustments that can be subtracted from gross income include:
IRA contributions.
Self-employed retirement plan contributions.
Half of any self-employment tax paid.
Health savings account deductions.
Student loan interest.
Tuition and fees.
Some business expenses for the performing arts, military reservists and government officials who are paid directly from the public, such as a justice of the peace.
To know exactly what adjustments you can subtract from your gross income to get your AGI, it may be best to speak with a tax professional.
» Find a tax pro near you
3. Add back certain deductions particular to MAGI
Finally, to figure out your MAGI, take your AGI and add back certain deductions.
Here are some common deductions you should add back in to find your MAGI:
IRA contributions.
Half of self-employment tax paid.
Qualified tuition expenses.
Tuition and fees deduction.
Passive loss or income.
Non-taxable Social Security payments.
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.
Publicly traded partnerships losses.
Student loan interest.
Calculating MAGI: Example
While the above method should be able to help you figure out your MAGI, some programs and deductions calculate MAGI differently. Once you arrive at your MAGI, check each deduction or credit to see if your MAGI allows you to qualify for it. Here is another example of how your MAGI could be calculated for various tax deductions and credits.
Example 1: To figure out if you can deduct your traditional IRA contribution:
Add your AGI and the following: student loan interest deduction, foreign earned income and housing exclusions, foreign housing deduction, excluded savings bond interest and excluded employer adoption benefits.
If the number you arrive at is less than the traditional IRA deduction limit then you can deduct the full amount. Depending on your filing status, and if you have a workplace retirement plan, those deduction limits can change. Regardless of your MAGI, you can take the full deduction if neither you nor your spouse are covered by a workplace retirement program.
Example 2: To figure out if you are eligible for education credits (American opportunity credit and lifetime learning credit):
Add your AGI and the following: foreign earned income and housing exclusions, foreign housing deduction, excluded bona fide resident of Puerto Rico or American Samoa income.
Both the American opportunity credit and the lifetime learning credit are phased out at certain MAGI levels. To claim the full credit on 2023 taxes, your 2023 MAGI has to be $80,000 or less ($160,000 or less for married filing jointly).
For single filers with a MAGI between $80,000 and $90,000, you’ll receive a reduced credit. After $90,000, you are not eligible for the credit.
For those married filing jointly, the phase-out lasts between $160,000 and $180,000, over which you are not eligible. If you file with the married filing separate status, you are not eligible for these tax credits.
» Learn more: What tax credits can I qualify for?
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Modified adjusted gross income: The bottom line
Figuring out your MAGI can be daunting, but it has its uses. Calculating your MAGI can help you figure out if you qualify for certain tax credits and deductions — but depending on the credit or deduction, the way you calculate that number may change.
If you’re trying to figure out if you can deduct your traditional IRA contribution or other valuable tax breaks, it’s a useful number. If you’re struggling to figure out your MAGI, or what kinds of credits and deductions you may qualify for, it may be worth talking to a tax pro.
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