Simply put, your MAGI is the sum of your adjusted gross income (AGI), your tax-exempt interest income, and specific deductions added back. Tax Definition of Modified Adjusted Gross Income Let's take a look at your modified adjusted gross income and break down how it may impact your tax bill. Many taxpayers consult a financial advisor to maximize their tax strategy for their retirement goals.
The IRS uses your modified adjusted gross income (MAGI) to determine whether you qualify for important tax benefits like deducting contributions from your individual retirement account (IRA) and making contributions to your Roth IRA.
