Calculation of AGI (Form 1040 Line #11)

[rudysnsx]

Hello,

I am seeking guidance on the what deductions can be taken for calculation of AGI Form 1040 Line #11 for my situation. Turbo Tax is calculating my AGI as follows:

-AGI is W2 income (box #1) and 1099 INT income

-AGI is only reduced by contributions to a 401k retirement plan

Question: Can AGI be reduced by the following contributions pre-tax? FSA Dependent Care, FSA Medical, HSA Account.

Can AGI be reduced by the following contributions post-tax? IRA (post-tax contribution to federal maximum rolled over into back-door Roth) and 529 Contributions.

If AGI can be reduced by the pre and post tax contributions listed above, why is the software not adjusting as such?

Thank You

[VolvoGirl]

Yes your AGI is reduced by pre-taxed items.  Those come out of your paycheck pre-tax meaning before taxes.  The amount in your W2 box 1 is already reduced for them so you don't need to enter them in your tax return.  You should notice that box 1 is less than boxes 3 & 5 on your W2.   That's why we always tell people not to file using your paystubs, the W2 can be different than the gross pay because of the pre-tax items.  

[AnnetteB6]

No, your AGI is not reduced directly by the items you listed.

FSA Dependent Care and FSA Medical are handled through your employer.  Amounts contributed to these accounts are pre-tax money, so they are not deducted against your taxable income.  Therefore, they do affect your AGI as VolvoGirl stated, but they do not affect it directly on your tax return.

Similarly, HSA account contributions made through your employer are also made with pre-tax money and are not deducted against your taxable income.  However, if you were not eligible to make those contributions, then that amount may be added to your income.  If you made an additional contribution to the HSA with your own funds (after-tax money), then those contributions are tax deductible and are subtracted from your AGI on Form 1040 Schedule 1 Line 13.

The IRA post-tax contribution which is rolled into a Roth IRA does not affect your AGI if it is performed with the intention of being non-taxable to you.  In this case, the Traditional IRA post-tax contribution must be a non-deductible contribution, which does not affect your AGI.  Otherwise, the subsequent conversion to the Roth IRA would be a taxable event, adding to your AGI.

Finally, 529 contributions are not reported on your Federal return and do not affect your AGI.  They may be deductible on your state return depending on your state laws.  

@rudysnsx