MAGI and Defined Benefit Plans

Your MAGI (modified adjusted gross income) is your AGI plus certain deductions you must “add back.” These deductions include IRA contributions, student loan interest, one-half of self-employment tax, qualified tuition expenses, and more. Since the defined benefit plan does not provide a reduction of taxable income, as an IRA contribution would, there is not add back necessary to calculate MAGI. 

 

https://turbotax.intuit.com/tax-tips/irs-tax-return/what-is-the-difference-between-agi-and-magi-on-your-taxes/L7kHckNS3 

Thanks but not sure I asked the right question.  My defined benefit plan contributions definitely decrease my taxable income.  So, does this mean my DBP contributions get "added back" for purposes of determining my MAGI?

MAGI is your Adjusted Gross Income with some add-backs that include the following that were previously deducted to arrive at your taxable income:

• 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

IRA Contributions listed above do not include the Defined Benefit Plans or Employer Sponsored Retirement Plans.  Instead it is adding back the deduction taken for an IRA Contribution on your 1040.

 

Your adjusted gross income is all of the income you bring in, minus certain adjustments. You can find the allowable reductions to your income on the front page of your Form 1040.

Commonly used adjustments include the following:

• IRA and self-employed retirement plan contributions
• Alimony payments (for divorce agreements prior to 2019)
• Self-employed health insurance payments
• One-half of any self-employment taxes paid

Other adjustments used in calculating AGI include the following:

• Health savings account deductions
• Penalties on the early withdrawal of savings
• Educator expenses
• Student loan interest
• Moving expenses (for tax years prior to 2018)
• Tuition and fees
• Deductions for domestic production activities (for tax years prior to 2018)
• Certain business expenses of performing artists, reservists, and fee-basis government officials

I do have a question.  Are the contributions reported on your W2?  

No, I am self employed so I opened a Defined Benefit Plan.  I have an LLC--no W2

Did you report it on your schedule C?

It's reported on Line 16 (Self-employed SEP, SIMPLE, and qualified plans) on the "Adjustment to Income" Form (Schedule 1)

In that case, yes, it would be and adjustment for MAGI. 

OK, thanks.  Sorry to hear that

It would then be considered a part of IRA Contributions for purposes of the MAGI add-backs.