Demystifying Your Taxes: The Importance of Adjusted Gross Income (AGI)

TLDRYour adjusted gross income (AGI) is a key number for your tax return as it determines your eligibility for tax credits and deductions. It is calculated by subtracting adjustments to income from your gross income. AGI helps lower and middle-income individuals access tax breaks, such as the earned income credit and retirement contribution matching. Knowing your AGI can help you understand your tax situation and plan for savings.