The term modified adjusted gross income in the new law is your adjusted gross income increased by any amount excluded from gross income under certain sections of the tax code that include foreign income.
Your adjusted gross income may include any taxable portion of Social Security based on your tax situation. For example, if your Social Security benefits are not taxable based on your income, it is not accounted for in your adjusted gross income.
Depending upon your income, some amount of your Social Security benefits will be taxable up to 85%. The taxable portion of your Social Security benefit is added into your adjusted gross income. If that adjusted gross income with any foreign income exclusions added back in will be compared to the $75,000 ($150,000 Married Filing Joint) phase-out level for the $6,000 personal exemption.
