Adjusted gross income, often shortened to AGI, is used to determine an individual taxpayer's tax liability for income tax purposes. Adjusted gross income is very simple to calculate, provided you have your income information from the prior tax year, which is generally reported on your Form W-2 or Form 1099. If you run your own business or are self-employed, you will have to calculate your total gross income yourself before you can calculate your adjusted gross income.
Determine your gross income. If you received a Form W-2 or Form 1099 from your employer, you can easily determine your gross income by reviewing your form. On a Form W-2, your gross income is reported on Line 1 under wages, tips, and other compensation.
On a Form 1099-MISC, your gross income is reported on Line 7 under nonemployee compensation. You may also have additional income not reported on these forms, including interest earned from investments, stocks dividends, and trust payments, which must also be included ... more.
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