MAGI

Personal Finance

Modified Adjusted Gross Income (MAGI) is AGI with certain deductions added back, used to determine eligibility for specific tax benefits. Different programs use slightly different MAGI definitions: the one for Roth IRA eligibility adds back traditional IRA deductions and student loan interest; the ACA MAGI adds untaxed foreign income, tax-exempt interest, and Social Security benefits. MAGI determines Roth IRA contribution limits, IRA deductibility when covered by a workplace plan, Premium Tax Credits for marketplace insurance, and Net Investment Income Tax exposure. Always check which MAGI definition applies to the specific calculation you're doing — they're not interchangeable.