MAGI (modified adjusted gross income) is your adjusted gross income (AGI) with certain deductions added back. The IRS uses MAGI — not gross income or taxable income — to determine eligibility for Roth IRAs, ACA subsidies, Medicare premium surcharges, and several other tax rules.
AGI vs. MAGI: What’s the Difference?
| Term | Definition | Found On |
|---|---|---|
| Gross income | All income before any deductions | — |
| AGI (Adjusted Gross Income) | Gross income minus above-the-line deductions | Form 1040, Line 11 |
| MAGI (Modified AGI) | AGI plus certain deductions added back | Calculated separately per rule |
| Taxable income | AGI minus standard/itemized deduction | Form 1040, Line 15 |
For most people with straightforward returns, MAGI = AGI. You only have a higher MAGI than AGI if you took specific deductions that get added back.
How to Calculate Your MAGI
Step 1 — Find your AGI Look at line 11 of your Form 1040. This is your gross income minus above-the-line deductions (student loan interest, IRA contributions, self-employment tax, etc.).
Step 2 — Add back specific deductions The add-backs depend on which MAGI calculation you need:
| Add-Back Item | Relevant Rules |
|---|---|
| Student loan interest deduction | Roth IRA, education credits |
| IRA deduction | Roth IRA eligibility |
| Tuition and fees deduction | Education tax credits |
| Foreign income exclusion | Roth IRA |
| Employer adoption benefits | Adoption credit |
| Passive activity losses | Rental real estate |
| Excluded savings bond interest | Education savings bond exclusion |
Step 3 — Apply to the specific rule Different rules use different MAGI calculations. The most common are covered below.
MAGI and Roth IRA Eligibility (2026)
The Roth IRA uses one of the most important MAGI calculations. Your ability to contribute to a Roth IRA phases out at higher incomes.
2026 Roth IRA MAGI limits:
| Filing Status | Full Contribution | Phase-Out Range | No Contribution |
|---|---|---|---|
| Single / Head of Household | Below $150,000 | $150,000–$165,000 | Above $165,000 |
| Married Filing Jointly | Below $236,000 | $236,000–$246,000 | Above $246,000 |
| Married Filing Separately | $0 | $0–$10,000 | Above $10,000 |
For Roth IRA purposes, MAGI = AGI plus student loan interest deduction, IRA deduction, tuition/fees deduction, foreign income exclusion, and a few other items.
Worked example: Jamie earns $145,000 in salary and deducted $2,500 in student loan interest (reducing AGI to $142,500). For Roth IRA eligibility, MAGI adds back the $2,500, making MAGI = $145,000 — still below the $150,000 limit. Full $7,000 contribution allowed.
MAGI and ACA Premium Tax Credits
The Affordable Care Act uses MAGI to determine eligibility for premium tax credits (subsidies for marketplace health insurance). For 2026, subsidies are available to households with MAGI between 100% and 400% of the federal poverty level — and in some cases above 400% under continuing expanded subsidy rules.
For ACA purposes, MAGI includes:
- Adjusted gross income
- Tax-exempt interest income
- Excluded foreign income
- Non-taxable Social Security benefits
If you’re purchasing marketplace insurance, your MAGI (not just AGI) determines your subsidy amount.
MAGI and Medicare IRMAA Surcharges
Medicare Part B and Part D premiums are higher for beneficiaries with incomes above certain thresholds, through the Income-Related Monthly Adjustment Amount (IRMAA). The IRS uses MAGI from 2 years prior.
2026 Medicare IRMAA thresholds (approximate):
| Individual MAGI | Married MAGI | Monthly Part B Premium Adjustment |
|---|---|---|
| $106,000 or less | $212,000 or less | Standard rate (no surcharge) |
| $106,001–$133,000 | $212,001–$266,000 | +$70/month |
| $133,001–$167,000 | $266,001–$334,000 | +$175/month |
| $167,001–$200,000 | $334,001–$400,000 | +$281/month |
| $200,001–$500,000 | $400,001–$750,000 | +$387/month |
| Above $500,000 | Above $750,000 | +$419/month |
Thresholds are approximate and subject to annual adjustment. 2024 MAGI determines 2026 IRMAA.
MAGI and Traditional IRA Deductibility
If you (or your spouse) are covered by a workplace retirement plan, the ability to deduct traditional IRA contributions phases out at certain MAGI levels.
2026 IRA deduction phase-out ranges:
| Covered by Workplace Plan | Filing Status | Phase-Out Range |
|---|---|---|
| Yes | Single | $79,000–$89,000 |
| Yes | Married Filing Jointly | $126,000–$146,000 |
| No (but spouse is covered) | Married Filing Jointly | $236,000–$246,000 |
Above these ranges, traditional IRA contributions are still allowed but are not deductible — they become non-deductible contributions.
MAGI and the Net Investment Income Tax (NIIT)
A 3.8% surtax called the Net Investment Income Tax applies to investment income (dividends, capital gains, rental income) for taxpayers above certain MAGI thresholds:
- Single: MAGI above $200,000
- Married filing jointly: MAGI above $250,000
MAGI and Child Tax Credit
The Child Tax Credit begins to phase out at $200,000 MAGI for single filers and $400,000 for married filers, at a rate of $50 per $1,000 of MAGI above those thresholds.
How to Lower Your MAGI
Reducing MAGI can open eligibility for tax benefits and reduce surcharges. Common strategies:
Contribute to pre-tax retirement accounts. 401(k), 403(b), and traditional IRA contributions (if deductible) reduce AGI, which in turn reduces MAGI.
Use an HSA. Health Savings Account contributions are above-the-line deductions that reduce AGI/MAGI.
Harvest capital losses. Capital losses offset capital gains and reduce investment income in your MAGI.
Defer income. If possible, defer bonuses or Roth conversions to years when your MAGI is lower.
Shift income to a retirement account vs. taxable account. Dividends and capital gains in a Roth or traditional IRA don’t count toward MAGI.
Related Articles
- AGI vs. Taxable Income: What’s the Difference?
- Roth IRA Income Limits 2026
- How to Open a Roth IRA Step by Step
- Backdoor Roth IRA for High Earners
- Net Investment Income Tax Explained
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