I need to know what the difference between your Adjusted Gross Income and your actual gross income that you made. If someone could please explain that difference to me, I would be most grateful.
2007-01-04 04:03:47 · 6 answers · asked by shleb_express 2 in Business & Finance ➔ Taxes ➔ United States
So does that mean that your Adjusted Gross Income is usually less than what your actual Gross Income is?
2007-01-04 04:12:59 · update #1
The actual gross income is your gross income...all your wages, interest earned, dividends, etc. Your adjusted gross income is your gross income minus/plus any adjustments. Ex. You have wages of 2000 and social security benefits of 6000. Your gross income is 8000 but your adjusted gross income is 2000. There are certain types of income that are "adjusted"...like in my example of ss benefits. Hope that helps :)
2007-01-04 04:12:34 · answer #1 · answered by D 2 · 0⤊ 0⤋
Your AGI is either less than, or the same as, your gross income. For many people, probably most, the two are equal.
Adjustments are listed on the bottom part of page 1 of a 1040. If you don't have anything for those adjustments, then your AGI and gross income are the same.
2007-01-05 00:26:08 · answer #2 · answered by Judy 7 · 0⤊ 0⤋
Your adjusted gross income is your income after your 401K or IRA contributions. If you have your insurance premium or some other tax deductible items i.e. transit, flexible spending account or dependent care account taken out of your paycheck, then those items are also excluded from your Adjusted Gross Income.
Go to www.irs.gov and download form 1040 or 1040A and just look at it, you will see it quite clearly.
Your Gross income on the other hand is ALL the money you earned. So, if your year to date earnings at the end of the year is 100,000 then this is your gross income. But say you contributed 10,000 to 401K, another 1000 to flexible spending account and another 3000 to childcare account, than your adjusted gross income is 100,000 - 10,000 - 1000 - 3000 = 86,000
2007-01-04 12:22:31 · answer #3 · answered by Alexander K 3 · 0⤊ 0⤋
Look at Form 1040 page 1. About 13 special deductions come off gross income to compute AGI. All other deductions get itemized on Schedule A.
2007-01-04 12:11:52 · answer #4 · answered by spicertax 5 · 0⤊ 0⤋
Your Adjusted Gross Income (AGI) is your total income form all sources after some certain deductions such as contributions to an IRA, unreimbursed medical expenses, unreimbursed business expenses, alimony, etc. but before your standard or itemized deductions.
2007-01-04 12:16:32 · answer #5 · answered by Hotsauce 4 · 0⤊ 0⤋
AGI is pretty much always less than your gross.
2007-01-04 13:28:15 · answer #6 · answered by Matt K 4 · 0⤊ 0⤋