Question: I am self employed. after my adjustments for self employment and ira contribution, my agi is $18500. But, after that I take deductions for my real estate taxes and mortgage interest, and standard deduction, I am in a very low income tax bracket. Which figure should I use? the AGI or after real estate taxes mtg interest and standard deduction.
Answer: For most of us, MAGI is the same as AGI - Adjusted Gross Income found on line 37 of the 1040. But more precisely, MAGI is the adjusted gross income plus any amounts excluded from taxation by section 911 (the exclusion from gross income for citizens or residents living abroad), any tax-exempt interest received or accrued during the tax year, and any portion of the taxpayer's social security benefits that are excluded from gross income.