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Deductibility Limits on Traditional IRA Contributions & IRA Contribution Limits from 2002 to 2012
Hardship Withdrawals and Accessing 401(k) Loans
401(k) Rules – Contribution Limits, Catch-Up Contribution Rules, Vesting Rules, 401k Eligibility Rules
Salary Deferral Contributions Made to 401(k) Retirement Account
Important Year End Statements for Individual Retirement Account (IRA) Holders
5 Things Every 401(k) Plan Should Have
The Roth 401(k) – How After-Tax Contributions Work, Comparisons with Roth IRA, Future Tax Rates, Contribution Limits & Frequently Asked Questions
What is a Traditional IRA? History of IRAs, Eligibility Requirements, Ineligible Compensation, Distributions from a Traditional IRA & How Income Tax Deductions Work
How to Invest in Real Estate using your Individual Retirement Account (IRA)
Rolling your 401(k) – Trustee to Trustee Direct Rollover, Modified Adjusted Gross Income (MAGI) Income Limits for Deductible Contributions to a Traditional IRA
401(k) Vesting – How It Works, Vesting Schedule, Number of Years of Service
401(k) Lump Sum Distributions – Tax Advantages, Rollover to IRA, Tax Deferred Contributions and more
401k Rollovers to an Individual Retirement Account (IRA) – Things to Consider Before You Rollover, Avoid Transfer Penalties, Move Employer Stock, etc.
401(k) Withdrawals – Early Withdrawal Penalties, Rollover Withdrawals, Exceptions and Tax Consequences
Understanding the Rules for Participating in a 401(k) Plan, Beneficiary Appointment, 401(k) Plans for High Paid Employees

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What is Modified Adjusted Gross Income (MAGI)? Definition of Gross Income

WealthCycles.com - Gold & Silver Investing News

(July 31st, 2009)

Your modified adjusted gross income for purposes of Roth IRA is your adjusted gross income shown on your tax return modified as follows:

1. Subtract the following

a. Roth IRA conversions included on IRS Form 1040 line 15(b) + Form 1040A line(11b) or Form 1040NR line16(b).

b. Minimum required distributions from IRAs (for conversions or rollovers from qualified retirement plans only).

c. Roth IRA rollovers from qualified retirement plans shown on IRS Form 1040 line(16b), Form 1040A line12(b) or Form 1040NR, line(17b).

2. Add the following deductions and tax exclusions

a. Student loan interest deductions
b. Tuition & education fees deductions
c. Traditional IRA deduction
d. Exclusions from foreign earned income
e. Exclusion from foreign housing income
f. Exclusion from bond income shown on Form 8815
g. Exclusion of employer provided adoption benefits shown on Form 8839.

Adjusted Gross Income?

Adjusted Gross Income (AGI) is a taxation term used in the United States that calculates a person’s tax liability to the IRS at a given year end. AGI is calculated by taking gross income and subtracting certain deductions.

Definition of Gross Income

Gross income is the addition of employment income, wages, bonuses and the following:

- Interest income from banks/stocks/bonds
- Dividend income from stocks
- Income from retirement accounts
- Capital gains (investment gains)
- Alimonies
- Rental income
- Farm subsidies
- Royalties
- Unemployment income

Total Income is determined on IRS form 1040a http://www.irs.gov/pub/irs-pdf/f1040a.pdf in calculations done from line 7 to line 15. On the other hand, total adjusted gross income is determined from line 16 through to line 21, deriving your total adjusted gross income.


 

 


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