Modified Adjusted Gross Income (MAGI)

Definition

Modified Adjusted Gross Income (MAGI) is an individual's adjusted gross income  without taking into account any of the following amounts.

• IRA deduction.
• Student loan interest deduction.
• Tuition and fees deduction.
• Domestic production activities deduction.
• Foreign earned income exclusion.
• Foreign housing exclusion or deduction.
• Exclusion of qualified savings bond interest shown on Form 8815.
• Exclusion of employer-provided adoption benefits shown on Form 8839.

Referring Cite

IRC § 219(g), IRC § 408(a), IRC § 408A, IRC § 530.

Additional Helpful Information

• MAGI is used to determine the following:
  • An active participant’s eligibility for deducting a contribution to a Traditional IRA
  • Eligibility for making a contribution to a Roth IRA
  • Eligibility for the Saver’s credit
  • Eligibility for contributing to a Coverdell Education Savings Account (CESA)
  • Eligibility to convert to a Roth IRA . Taxable distributions are not included in the recipient’s MAGI for purposes of determining eligibility for a Roth IRA conversion ( Note: This rule no longer applies as of January 1, 2010, as the $100,000 MAGI income that applied to Roth IRA conversion was repealed as of January 1, 2010)

Please see IRS Publication 590 for Worksheets and step-by-step instructions on how to compute your MAGI http://www.irs.gov/pub/irs-pdf/p590.pdf