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Level 5
posted Jan 4, 2023 1:13:51 PM

To Calculate MAGI do you add in 1/2 of Self Employment Taxes to AGI?

I keep seeing different information for how to calculate MAGI.

 

For a Self Employed Person is MAGI calculated from AGI + the total of 1/2 of Self Employment Taxes + (the additional items shown below?)

 

I'm calculating my MAGI just to have an idea of what my MAGI is for the healthcare marketplace thanks!

 

your MAGI is your AGI with the addition of the appropriate deductions, potentially including:

  • 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

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1 Best answer
Level 15
Jan 4, 2023 2:07:31 PM

With regard to qualifying for marketplace insurance, see this Healthcare.gov webpage which lists the few items that are added to AGI to produce MAGI:

https://www.healthcare.gov/income-and-household-information/income/#magi

 

Be aware that TurboTax's tax tip regarding MAGI is worse than useless.  It's extremely misleading.

4 Replies
Level 15
Jan 4, 2023 1:36:32 PM

MAGI for what purpose with regard to Marketplace plans?  There are several.  However, I don't know that any involve adding the deductible portion of SE tax to AGI.  Some calculations involve subtracting the deductible portion of SE tax from total income, not modifying AGI.

 

I suggest looking at IRS Pub 974:  https://www.irs.gov/pub/irs-pdf/p974.pdf

 

Level 5
Jan 4, 2023 2:00:34 PM

Thanks for the reply! I meant MAGI in regards to the health insurance marketplace. 

 

As they base eligibility on MAGI and Not AGI, but I didn't realize there were more than one variation of MAGI.

 

I thought MAGI was MAGI. 

 

Some places say to add in 1/2 of SE tax to get magi from AGI...........but others don't say that. 

 

So that was what I was confused about, thanks!

Level 15
Jan 4, 2023 2:07:31 PM

With regard to qualifying for marketplace insurance, see this Healthcare.gov webpage which lists the few items that are added to AGI to produce MAGI:

https://www.healthcare.gov/income-and-household-information/income/#magi

 

Be aware that TurboTax's tax tip regarding MAGI is worse than useless.  It's extremely misleading.

Level 5
Jan 4, 2023 2:11:27 PM

Thanks very much! That is very helpful info!