Modified Adjusted Gross Income (MAGI) (MAGI)

Your modified adjusted gross income (MAGI) is your adjusted gross income (AGI) plus deductions, such as college loan interest and contributions to a deductible individual retirement account (IRA), which you may qualify to take if your MAGI is less than the annual ceilings set by Congress.

Other deductions, such as alimony, don't have income limits.

For example, suppose you're single, have a gross income of $51,000, and you're eligible to take a deduction for your IRA contribution of $4,000. Your AGI, when all deductions are taken, turns out to be $45,500. You then add the $4,000 back to find your MAGI of $49,500. Because your MAGI is less than the ceiling for deducting your full IRA contribution for your filing status, which is $50,000 if you are single, you can take the full deduction.

The figure used to determine eligibility for lower costs in the Marketplace and for Medicaid and CHIP. Generally, modified adjusted gross income is your adjusted gross income plus any tax-exempt Social Security, interest, or foreign income you have.