AAs Americans take the time to file their tax returns for the 2021 tax year, many complex terms crop up in this process. Although some of these terms are familiar, many have forgotten what exactly they mean. This is often the case with Adjusted gross incomeso we’ll break down exactly what it is and how to find it through the Form W2.
What is Adjusted Gross Income?
In its simplest form, Adjusted gross income (AGI) is gross income less adjustments to income.
To perform this calculation, you must add up all the elements that make up your gross income, including salaries, dividends, capital gains, business income, retirement distributions and certain other income. Then you subtract your income adjustments, which include educator expenses, student loan interest, child support payments, or contributions to a retirement account.
Often, your employer will calculate your AGI for you, projecting your taxable pay with subtractions.
By definition, your adjusted gross income cannot be greater than your gross income.
Where do you find your adjusted gross income on the W2 form?
Your W2 form only shows the unadjusted gross income from that specific job, so you cannot find your AGI on that form.
You can, however, calculate your adjusted gross income using W2 forms. The different boxes describe your income and the amounts withheld by an employer, so you can use them to perform the AGI calculation described above.
The only form where you will have the full adjusted gross income is on your original, unaltered tax return copy or official IRS transcript.
If you need help calculating your adjusted gross income for the most recent tax year, there are several AGI calculators online where you can turn to enter all your data and get the final result.