Foreign earned income and housing expenses if you live abroad.Health care AKA premium tax credit: You calculate MAGI by adding AGI plus: Excluded Puerto Rico income and or American Samoa residents' income.Excluded Puerto Rico income and or American Samoa income.Ĭhild tax credit: You calculate MAGI by adding AGI plus:.Foreign earned income and housing exclusions and.The IRS provides information for this tax benefit in Form 8960, which is used to calculate your total net investment income (NII) tax for individuals, estates, and trusts.Īmerican opportunity AKA education credit: You calculate MAGI by adding AGI plus: foreign earned income exclusion and certain foreign investment adjustments.
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Net investment income (NII) tax: You calculate MAGI by adding AGI plus Roth IRA eligibility: MAGI is the same calculation as the Traditional IRA formula above plus any Traditional IRA deduction.
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Some of the common examples of how to calculate MAGI are as follows: Any amount equal to the portion of the taxpayer's social security benefits, which is not included in gross income for the taxable year.
Any amount of interest received or accrued by the taxpayer during the taxable year is exempt from tax.Any amount excluded from gross income in section 911 (foreign earned income and housing costs for qualified individuals).Therefore, every MAGI calculation has its instructions.Īccording to the Internal Revenue Code, you should add the following to your AGI to determine your MAGI: So it's good to calculate your MAGI even though you worry that you're not eligible because you 'earn too much,' you might still qualify for the benefit. The good thing is that they use your MAGI income, not your gross income, which is usually much higher than your MAGI. As stated earlier, different government programs evaluate your MAGI differently.
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