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Modified adjusted gross income, or MAGI, might sound like just more tax jargon, but knowing how to calculate your MAGI is key to determining your eligibility for several valuable tax benefits, including whether you can make Roth IRA contributions, claim education tax credits and more.
The MAGI calculation starts with your adjusted gross income (AGI), and then you add back certain deductions or exclusions.
Here’s how MAGI works and how to calculate it.
What is modified adjusted gross income (MAGI)?
MAGI determines your eligibility for a number of tax breaks, so it’s worth knowing how it differs from your AGI. MAGI is basically your AGI with specific items added back in.
Adjusted gross income, or AGI, is the total income on your tax return — including wages, interest, dividends, etc. — minus certain adjustments, including:
Tax tip
Adjusted gross income is calculated before subtracting the standard deduction or your itemized deductions. Your taxable income is calculated by subtracting your standard or itemized deductions from your AGI.
MAGI adds back some deductions to your AGI because the IRS doesn’t allow those items to reduce your income when deciding if you qualify for certain tax benefits. Essentially, MAGI is a stricter measure of income that the IRS uses to determine eligibility for tax credits and deductions. For example, MAGI may add back things like deductible student loan interest and employer-provided adoption benefits.
Two key aspects of MAGI to keep in mind:
- You won’t find an entry for MAGI on your Form 1040 tax return. You have to calculate it manually, use IRS worksheets or let your tax software automatically calculate MAGI for you.
- The MAGI calculation can vary depending on the specific deduction or credit you’re hoping to claim. For example, the MAGI calculation to see if you’re eligible to contribute to a Roth IRA is slightly different than the one for determining if you qualify to deduct your traditional IRA contributions.
How is MAGI calculated?
The formula for calculating MAGI is relatively simple:
- Start with your AGI (it’s on line line 11 of the 2024 version of Form 1040).
- Add back any deductions or exclusions that can’t be included in MAGI for the tax benefit you’re hoping to claim (more on this below).
- The resulting number is your MAGI for the purposes of that specific tax benefit.
Common add-backs include:
- Foreign earned income exclusion
- Foreign housing exclusion
- Deductible student loan interest
- Excluded U.S. savings bond interest
- Employer-provided adoption benefits
For example, if you’ve claimed the foreign earned income exclusion to lower your AGI, the MAGI calculation generally requires you to add that income back in. MAGI usually also removes some above-the-line deductions from AGI, to give the IRS a clearer picture of your income. (Above-the-line deductions are deductions you can claim without itemizing.)
Examples of how MAGI is used
Here are a few examples of how MAGI determines your eligibility for some tax benefits.
Contributing to a Roth IRA
Your ability to contribute to a Roth IRA is limited by your MAGI. If your MAGI is above a certain amount, you can’t contribute to a Roth.
The MAGI calculation for the purposes of Roth IRA contributions is affected by these items:
- Income resulting from a conversion or rollover to a Roth IRA
- Traditional IRA deduction
- Student loan interest deduction
- Foreign earned income or housing exclusion or foreign housing deduction
- Excludable qualified savings bond interest
- Excluded employer-provided adoption benefits
Search for “Worksheet 2-1. Modified Adjusted Gross Income for Roth IRA Purposes” in this IRS publication to calculate how the above items go into calculating your MAGI.
Below are the MAGI limits for making contributions to a Roth IRA.
2025 Roth IRA income limits
| Roth IRA contribution amount starts to phase out at MAGI of… | Roth IRA contribution not allowed above MAGI of… | |
|---|---|---|
| Single, head of household, or married filing separately and didn’t live with spouse at any time during the year | $150,000 | $165,000 |
| Married filing jointly or qualified surviving spouse | $236,000 | $246,000 |
| Married filing separately and lived with spouse at any time during the year | $0 | $10,000 |
| Source: IRS |
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Deducting traditional IRA contributions
There’s also a MAGI calculation to determine how much of your traditional IRA contribution you’re allowed to deduct. For context, the IRA rules are:
- Anyone, no matter what their income, can contribute to a traditional IRA.
- If you want to deduct that IRA contribution, then:
- If you, and your spouse if you’re married, don’t have a workplace retirement plan, you can deduct your IRA contribution, no questions asked. There is no income limit.
- If you or your spouse are covered by a workplace retirement plan, then MAGI limits kick in and determine whether you can deduct your traditional IRA contribution.
The MAGI calculation for determining if you can deduct your IRA contributions is based on your AGI before you deduct any IRA contributions, and then the following items are added back to your AGI:
- Student loan interest deduction
- Foreign earned income or housing exclusion or foreign housing deduction
- Excludable savings bond interest
- Excluded employer-provided adoption benefits
Search for “Worksheet 1-1. Figuring your modified AGI” in this IRS publication to calculate your MAGI for the purposes of claiming a deduction for traditional IRA contributions.
The 2025 MAGI limits for deducting traditional IRA contributions (which, again, only come into play if you or your spouse has a retirement plan at work) are below.
2025 traditional IRA income limits
| Deduction starts to phase out at MAGI of… | Deduction no longer available above MAGI of… | |
|---|---|---|
| Single filer or head of household and you have a workplace retirement plan | $79,000 | $89,000 |
| Married filing jointly or qualified surviving spouse and you have a workplace retirement plan | $126,000 | $146,000 |
| Married filing jointly and you don’t have workplace retirement plan but your spouse does | $236,000 | $246,000 |
| Married filing separately with workplace retirement plan | $0 | $10,000 |
| Source: IRS |
Claiming education tax credits
MAGI is also used to determine if you qualify for education tax credits such as the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit.
The following items are added back to your AGI to calculate your MAGI for both the American Opportunity Tax Credit and the Lifetime Learning Credit:
- Foreign earned income and/or foreign housing exclusion
- Foreign housing deduction
- Exclusion of income by residents of American Samoa
- Exclusion of income by residents of Puerto Rico
Search this IRS doc for “Worksheet 2-1. MAGI for the American Opportunity Credit” to see the MAGI calculation for the purposes of the AOTC. The Lifetime Learning Credit uses the same calculation.
American Opportunity Tax Credit and Lifetime Learning Credit income limits
| Credit starts to phase out at MAGI of… | Credit not available above MAGI of… | |
|---|---|---|
| Married filing jointly | $160,000 | $180,000 |
| All other taxpayers | $80,000 | $90,000 |
Bottom line
No matter the tax break, the pattern holds: Your MAGI dictates what you qualify for. Stay under the income threshold, and you get the full benefit. Enter the phaseout range, and that benefit starts shrinking — or disappears entirely. Always check the IRS rules to see how MAGI factors into each credit or deduction. See the bottom of this IRS page for more information about MAGI rules for various tax benefits.
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