Your adjusted gross income is figured by totaling all of your income and subtracting any adjustments, such as alimony payments, to find your adjusted gross income. Your adjusted gross income does not include itemized deductions, standard deductions, exemptions, and earned income credit or child care credits. The AGI can be found on previously completed U.S. tax forms 1040, line 37, 1040A, line 21 and 1040EZ, line 4 or you can compute your AGI from scratch.
Write down any salary, wages and tips that you received during the calendar year. Tips that aren't reported on any W-2 need to be recorded as well. Add any income from 1099 forms you may have received. Add the figures. This income is what is reported to you on Form W-2 from your employer.
Write down your taxable interest on the next line under your wages. Use IRS Schedule B if needed to calculate taxable interest. Under taxable interest, write down ordinary dividends. If you received any taxable credits or refunds or any offsets to local or state income taxes, write this amount under ordinary dividends. Include any interest from money market accounts, bonds and any other financial interest you receive.
Write down any alimony; business income, which is reported on IRS Schedule C-EZ or C; capital gains or losses; other gains or losses you have from IRS Form 4797; and any taxable distributions from IRAs, pensions or annuities for the year. If you have any income reported on IRS Schedule E -- which is for reporting royalties, real estate rental income, estates and trusts, business partnerships and S-corporation income, and income from real estate mortgage investments -- add this to your income. If you have any farm losses or income, use IRS Schedule F to calculate your income liability and add this to your income. Add any taxable Social Security benefits, unemployment or other income such as the monetary value of any gifts and prize winnings if they fit into the classifications as noted in IRS Publication 525.
Total the list of income. This is your total income for the tax year.
Adjustments to Income
Write down any adjustments to your income in a second column. List qualifying education expenses; any qualifying business expenses from IRS Form 2106; any health savings from IRS Form 8889; and any moving expenses from IRS Form 3903.
Add to the list any self-employed health insurance deductions; self-employed SIMPLR, SEP or other qualifying plans; deductible part of the self-employment tax from IRS Schedule SE; and any penalties for withdrawing money early from a savings plan. If you paid alimony, write this amount down along with any IRS deductions, student loan interest and any fees and tuition from IRS Form 8917. If you had any deductions for domestic production from IRS Form 8903, add this amount in the column.
Add up the amounts of the adjustments. Subtract the adjustment amount from your total income. This is your adjusted gross income.
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