adjusted gross income (AGI) --
The income of an individual or couple that serves as the base for calculating federal income tax. AGI is worked out by deducting from gross income any uncompensated business expenditure and making other permissible adjustments, such as for Individual Retirement Accounts, rent and royalty expenses, 50% of self-employed tax liability, alimony payments, forfeiture of interest penalties, health insurance deductions, and capital loss deductions up to $3,000. AGI is income that is inclusive of both taxes (state, local and real estate) and listed deductions such as for medical outlays. These deductions are not permitted if AGI surpasses specific income thresholds that are adjusted upwards on a yearly basis. The gradual termination of itemized deductions is set to be revoked in a phased manner beginning from 2006.
adjusted gross income (AGI) -- All income subject to taxation under
the individual income tax after subtracting "above-the-line" deductions,
such as certain contributions for individual retirement accounts and alimony
payments. Personal exemptions and the standard or itemized deductions are
subtracted from AGI to determine taxable income.
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