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Level 5

Question

Am I Calculating Magi correctly? re: Self Employment Tax - do I add or subtract that amount?

Forum|Forum|5 years ago
March 28, 2021
4 replies
55 views

Hi,

If I take an AGI, say around 20k...........and have Self employment tax of around 4k.......... from what I understand you take the AGI and add in 50% of the SE Tax to get MAGI right? you don't deduct the 50% of the SE tax...

So MAGI would be 22k not 18k? for ACA healthcare MAGI calculations?

Just making sure I'm supposed to add SE tax at 50% to AGI to get MAGI not subtract thanks!

TurboTax Home & Biz Windows

Level 15

why not just let TT figure that out? that accuracy is what you are paying for....

Level 15

Please see this answer from MollsBBU.

Your tax return does not display your MAGI, you will need to calculate it by first checking your AGI. To locate your AGI:

With your return open, click My Account
Then, Tools
Under "Other Helpful Links", click View Tax Summary
Your Adjusted gross income should be third on the list

Next, to calculate your modified adjusted gross income (MAGI), take your AGI and add back certain deductions. Many of these deductions are rare, so it's possible your AGI and MAGI can be identical. According to the IRS, your MAGI is your AGI with the addition of the following deductions, if applicable:

Student loan interest
One-half of self-employment tax
Passive loss or passive income
IRA contributions, taxable social security payments
The exclusion for income from U.S. savings bonds
The exclusion under 137 for adoption expenses
Rental losses
Any overall loss from a publicly traded partnership

Level 5

Hi thanks, just wondering do I add in SE Tax at 50% to AGI to get MAGI or subtract ? thanks!

Level 15

No, The MAGI does not adjusted for 50 % SE tax.

IRS publication 590A, page 42 (worksheet 2-1) does NOT list adding back "one-half of self-employment tax." back into your AGI.

Publication 590-A (2020), Contributions to Individual Retirement Arrangements (IRAs) | Internal Revenue Service (irs.gov)

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