In order to calculate your Modified Adjusted Gross Income (MAGI), you will begin with your Adjusted Gross Income (AGI) from your Tax Return.
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. 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
- Qualified tuition expenses
- Tuition and fees deduction
- Passive loss or passive income
- IRA contributions
- Non-taxable social security payments
- The exclusion for income from U.S. savings bonds
- Foreign earned income exclusion
- Foreign housing exclusion or deduction
- The exclusion under 137 for adoption expenses
- Rental losses
- Any overall loss from a publicly traded partnership
I'm super confused about this MAGI calculation, specifically concerning SS payments. In your response you indicate to calculate MAGI you would take AGI plus the non-taxable portion of SS payments (assume no other adjustments). I've seen some other articles online that say the same thing. Others that don't mention SS at all.
I've completed my 2020 tax return using Turbo Tax Premier. Due to other pension income, interest, etc., part of my social security is taxable. When I pull up the MAGI worksheet the figure it is showing actually excludes the taxable portion of my SS benefits. So my MAGI is less than AGI by that figure. Shouldn't the MAGI figure be higher by the non-taxable portion? Is this schedule wrong in TT?
If you are receiving SSI (Supplemental Security Income), those payments are not included in MAGI. These benefits are different from Social Security payments. The MAGI used to calculate your taxable social security benefits is your gross income plus taxable tax exempt interest less exclusions for Savings Bond interest. That might be the schedule you are looking at.
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I don't get SSI, just regular social security per SSA-1099. The figures appear on the Social Security Worksheet, Lines A, B and C. When I look at the Mod AGI Worksheet in Turbo Tax the figure it shows at the bottom of the schedule (MAGI) is less than my AGI by the taxable SS figure from the 1040 Line 6b. From what I've read it should be higher by the non-taxable portion of my SS benefits (difference between 1040 Lines 6a and 6b).
Taxable amount of your Social Security benefits being calculated based on your combined income: MAGI plus one-half your Social Security benefits
MAGI will always be greater than or equal to AGI, because to find your MAGI, you have to add some of deductions to your AGI.
my wife magi is more than her wages. is code DD in box 12 counted in as income? the program has her at about 100,000 more than she earned.
No. Code DD is just information to you and you need not even enter it.
MAGI has several definitions in different sections of tax law and is calculated differetnly for each. Exactly what problem are you having?
I agree with your MAGI calculation, RayW7, but TurboTax is excluding non-taxable SS benefits from my MAGI on Form 8960 (Net Investment Income Tax - NIIT). Instead, it's using my AGI amount (and NOT adding in the 15% of my SS income that isn't taxable). Thus, it's under-calculating my NIIT. This is such a clear error I find it difficult to believe it's occurring.
Per IRS Tax Topic 559, there is no mention of non-taxable social security income in calculating MAGI for the Net Investment Income Tax :
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