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What is the difference between AGI, taxable income, and MAGI?

These three income figures drive different parts of your return. Gross income minus certain "above-the-line" adjustments — like traditional IRA and HSA contributions, student loan interest, and the deductible half of self-employment tax — gives your adjusted gross income (AGI). Subtract the standard or itemized deduction from AGI and you get taxable income, the number your tax brackets actually apply to. Modified adjusted gross income (MAGI) takes AGI and adds back a few specific items (the exact add-backs vary by provision); it's the gatekeeper for things like Roth IRA eligibility, IRA deduction phaseouts, ACA subsidies, and the IRMAA Medicare surcharge. The practical takeaway: pre-tax contributions lower AGI and often MAGI, which can both cut your tax and keep you under important eligibility thresholds. Knowing which number a rule uses helps you plan contributions deliberately. See how the levers connect at wealthserene.com/tools/tax-strategies.

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Educational disclaimer. Everything on WealthSerene.com is educational and is not investment advice. Projections and calculations are illustrative; actual results depend on market conditions, your situation and factors outside this tool’s scope. For a decision specific to your situation, consult a qualified financial professional. View full disclosures