These small items are often referred to as stocking stuffers or stocking fillers. [1 ] [2 ] The tradition of the Christmas stocking is thought to originate from the life of Saint Nicholas. [2 ] In some Christmas stories, the contents of the…
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3. 7. 2005Learn what Modified Adjusted Gross Income (MAGI) is, how to calculate it, and why it matters—from Roth IRAs to Premium Tax Credits, Medicaid, and Irmaa surcharges.
What Purpose Does MAGI Serve?The IRS uses MAGI to determine whether you qualify for specific tax programs and benefits. For instance, it helps to determine the allowed amount of your Roth IRA contributions. Knowing your MAGI can also help you avoid tax penalties because over-contributing to these programs and others like them can trigger interest payments and fines. Your MAGI can also determine eligibility for certain government programs, such as the subsidized insurance plans available on the Health Insurance Marketplace.What Is the Difference Between MAGI and AGI?Your modified adjusted gross income (MAGI) is your adjusted gross income (AGI) plus additional items such as student loan interest, qualified education expenses, passive income or losses, IRA contributions, and foreign income, among others.Can MAGI and AGI Be the Same?Yes, MAGI and AGI can be the same. For many people, the list of deductions that need to be added back to AGI to calculate MAGI will not be relevant. For instance, those who did not earn any foreign income would have no reason to use that deduction and would have none of those earnings to add back to their AGI.
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