In particular I'm interested in the passive income and losses. For example, if I have 3 rental properties that create a total passive income of $50,000. In my return, I deduct all the costs (mortgage interest, taxes, etc) so I end up with just $20,000. AGI already includes this $20k. So do I need to add the extra $30k?
You don't have to add the extra $30,000; you total rental income in that case is $20,000. You can find your AGI on line 11 of your Form 1040, and also on the Summary page in TurboTax.
Your MAGI is used as a basis for determining whether you qualify for certain tax deductions. One of the most notable is in determining whether or not your contributions to an individual retirement plan are deductible.
To calculate your modified adjusted gross income (MAGI), take your Adjusted Gross Income (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:
For additional information, please see the following TurboTax article: Difference Between AGI and MAGI on Your Taxes .
Related information: IRS AGI vs MAGI
Thanks but you still aren't answering my question. I said I read that article and I understand it explains how to calculate it but my question is if TurboTax can calculate that for me since it has all the required information. I also gave an example scenario and asked how to handle it.
Since this is a public forum, we do not have any access to your personal information, therefore, we cannot calculate your MAGI. You can reach out for assistance from one our live tax experts for this matter: How do I connect with a tax expert in TurboTax Live?
I understand that, I'm not asking to share actual numbers on a public forum, I'm asking if the software has a place to just tell me the number like it does for AGI
The MAGI for passive activity losses can be found on IRS form 8582 Part II line 7.
The computation of MAGI can be found on the Modified Adjusted Gross Income Worksheet.
You are able to view the worksheet under Tax Tools / Print Center / Print, save or preview this year's return.
[Edited 02/23/2021 9:56 AM PST]
From the ‘Print and Save Your Tax Return’ option selected “Tax Return, ALL Calculation Worksheets’. I do NOT see “Modified Adjusted Gross Income Worksheet.”. Let us know if I am missing any steps here. Also, let us know if any way we can find the MAGI (Modified Adjusted Gross Income) in any worksheet/form.
It is hard to find the MAGI (Modified Adjusted Gross Income) amount.
Every MAGI calculation depends on why you need to calculate it. The M stands for 'modified' but how it is modified depends on the tax reason. The government provides appropriate instruction forms for whichever purpose you’ll need. In TurboTax, you will find any needed MAGI computation on the form or worksheet that required it. Some tax situations that require the use of MAGI:
In the Online program, you need to know what form or credit is using your MAGI. If your tax return does not require the calculation, you will not find it on any of the forms or worksheets.
However, if you are using the desktop program, you can view all forms, even blank ones that were not a part of your return. @Justin0469
My Tax return needs MAGI (‘Modified’ Adjusted Gross Income), and again I can’t find the “Modified Adjusted Gross Income Worksheet.” (as said above).
IRA (Traditional-Deductible, Roth) contribution depends on MAGI amount. As a TaxPayer If I know the MAGI number, then I can make an appropriate decision/strategy for the IRA contribution.
Feedback – If the tax return is using (or know) MAGI for the tax calculation, then it is nice to show the MAGI amount on the product screen. It would save time for ALL (customer and support) parties and eventually lead to a good customer experience.
There is no one single MAGI. MAGI differs depending on the tax situation.
To calculate your modified adjusted gross income, 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. Different credit and deductions can have differing add-backs for your MAGI calculation. According to the IRS, your MAGI is your AGI with the addition of the appropriate deductions, potentially including:
TurboTax 2021 Deluxe, at least, does provide the "Modified Adjusted Gross Income Worksheet". I don't know about other versions.
To find the worksheet, go to the Forms view and click Open Form. Set the return type to Form 1040: Individual and then search for "modified". "Modified AGI Worksheet" should be the one and only page that's found. Click Open.
If you want to print the form, display the worksheet (as above) and then Print Active Form (under File in the menubar).
Why is tax Exempt interest ( 1040 line 2a) not listed? There are sources other than Federal such as Municipal bond interest.
When I print to pdf "all turbotax forms and worksheets" for my 2021 federal tax return, a turbotax worksheet "Form 8582 Modified Adjusted Gross Income Worksheet" (this is not IRS form 8582) appears as page 199 of 308 (your page count will differ). But if your pdf reader has a search feature, just search on the word "modified" and it will eventually come to that worksheet if it exists.
It appears to be a worksheet that is not filed with the tax return, but is just an internal worksheet prepared by the software for the taxpayers records.
HOWEVER, the amount on my worksheet does not include any social security retirement income, taxable or non-taxable, which is odd. It also doesn't match the MAGI amount that turbotax populates into line 1 of the "Roth IRA Contribution Limit Worksheet". That $value is significantly less that what is at the bottom of form 8582.
Although many tax situations use the term "Modified Adjusted Gross Income", the definition of the MAGI is usually different in each case. Thus you can't use the MAGI for one situation for another.
In your case, please see the instructions for line 6 for the 8582, which explains what the MAGI is for your case.
Why are you all making this so much more difficult than it needs to be?
1. Turbo tax calculates MAGI for use in determining whether you can contribute to IRAs.
2. Turbo tax displays that information if you exceed the earnings limits and attempt to contribute to IRAs. See example messages below.
3. Turbo tax does not seem to provide a way to see the MAGI calculation. The search for 'modified' only showed me form 8582 p1 Passive Activity Loss Limitations and it was empty
Example language when trying to enter IRA contributions:
Some of your IRA contribution isn't deductible.
...
Based on the information you've entered so far, X is covered by a retirement plan at work and your modified AGI is $yyy,zzz. You can't deduct Y's $7,000 contribution.
So the MAGI calculation is right there. Why is it so difficult to find directly?
Summary:
Turbo Tax should be fixed to allow users to see the MAGI calculation directly. If as you say, there are different calculations used for different purposes, then fine. Show them all.
The more I read up, the more confused I get about MAGI.
The Turbo Tax Modified Adjusted Gross Income Worksheet, calculated MAGI for Passive Gain Loss (Rental Property) and in this worksheet it omited our Social Security payments completely as income. Thus our MAGI is much lower that our AGI.
I need to understand MAGI For Medicare IRMMA price seeting. In this Modified Adjusted Gross Income Worksheet, calculation, it excluded Social Security Income. But when I read other descriptions of deductions to add -back in, I find several references that say add back in "Tax-exempt SS income" (Which is 15% for us) So for IRMMA purposes, should I be adding in the non-taxed SS payment amount?
Secondly, in adding back deductions for "tax-exempt interest", to calculate MAGI, would the gain a Roth IRA withdrawal be considered "tax-exempt interest" ? I know Roth IRA distributions are not taxable, and clearly there is a basis and a gain amount in Roth accounts, but is the Roth "Gain" (which is tax-exempt) considered "interest" for MAGI calculation purposes?
Thirdly, when Medicare goes int tax records to get prior year MAGI to determine IRRMA rate, where are they actually pulling our MAGI amount from, considering its not a line item on the 1040?
(See my other comment)'
You mention - "the amount on my [MAGI] worksheet does not include any social security retirement income, taxable or non-taxable, which is odd. " I have same question.
TT did calculate my MAGI for 'passive gain/loss' calculation (on the MAGI Worksheet) but like you, it did not include any SS income (neither taxed or untaxed portions). I don't know if TT did this correctly? (It wouldn't be the first error I've found in TT) Assuming its correct for passive gain/loss purposes, I also need MAGI for Medicare Part B IRMMA rate planning, and need to know if I should add SS income to the MAGI for IRMMA purposes or not? I find conflicting references, and the IRS forms are only vague in addressing this matter.
Yes, MAGI can be confusing mostly because there are multiple MAGIs for different purposes.
Modified Adjusted Gross Income (MAGI) for calculating Income Related Monthly Adjustment Amount (IRMMA) is the sum of:
There are no other add backs and Roth distributions are not included as interest.
The information that the SSA uses to determine your IRMMA is the numbers from 2a and 11 of your 1040 and your filing status.
The Social Security Administration uses your tax information from two years prior to determine your IRMMA. Click here to see the tables they use to determine your Medicare premium.
Thank you Julie, that's the most straight forward explanation I've gotten! It is amazing how many different interpretations are out there. I've done IRMMA adjustments for 2022 and 2023, so I'm quite familiar with that process.
John
I found a MAGI calculation on form 8960 line 13 from my 2022 Federal return. It was calculated there because of the added 3.8% tax on investment income if your MAGI is over $250K filing jointly.
Just paying my fair share : )
How do you find the calculation for MAGI in the current year's tax calculations? I can't find it anywhere. It's easy enough to calc myself however, the MAGI I come up with does not match the amount TT comes up with. I know this because TT limits my Traditional IRA contribution due to the MAGI it comes up with.
If you are using the CD/downloaded version of TurboTax, you can trace how the Modified Adjusted Gross Income (MAGI) was calculated.
You would go to Forms mode and look for the IRA Worksheet (at the bottom of all of the Federal forms in your return). Line 12 is the MAGI. Right-click on that number and select data source. A screen will pop up to show you how it was calculated and where the numbers in the total are found in your return.
There does not seem to be a worksheet or source that you can print or access similar information if you are using TurboTax Online.
tomtax2008,
I have followed your instructions to the letter and there is NO, NONE, ZIP, ZILCH worksheet in Turbo Tax that shows the details on how Turbo Tax calculates MAGI. smh!!! I do not understand why TT does NOT have a worksheet and simply the number appears on form 8962 with no calculation details.
I have looked for 2 years and cannot find it. btw I have always used the Deluxe version. This is quite aggravating to say the lease.