What is Adjusted Gross Income (AGI) and why is it significant?

[accountinglads]

Adjusted Gross Income (AGI) is one of the most important financial issues in the U.S. taxation system. It is your entire income without any deduction of certain IRS-approved adjustments such as student loan interest, teacher expenses and retirement savings. Importance AGI is the factor that defines your tax credits, tax deductions and tax benefits. Taxable income and some phase-outs are some of the many tax calculations that use AGI. Knowledge of AGI will assist taxpayers to know the approximate amount of tax that will be paid and to better plan their funds.

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