How to Calculate Modified Adjusted Gross Income (MAGI)

To calculate your modified adjusted gross income (MAGI), start with your adjusted gross income from line 11 of Form 1040, then add back the items the rule you’re checking lists. There isn’t one MAGI. The Roth IRA limit adds back student loan interest; Medicare and the health insurance credit add tax-exempt interest; the new car loan, tips, overtime and senior deductions add back only foreign income most people don’t have. So for most people, MAGI for those is simply their AGI.

This guide works one household through every version, shows which add-backs each rule uses, and lists the 2026 limits that MAGI decides.

MAGI at a glance

Step 1: find your adjusted gross income

Every MAGI starts from AGI, so get that right first. If you’ve filed, it’s on line 11 of Form 1040. If you’re estimating:

1. Add up your total income. Wages from box 1 of your W-2s, taxable interest, dividends, business and rental profit, capital gains, taxable retirement withdrawals, unemployment and the taxable part of Social Security.
2. Subtract the adjustments. These are on Schedule 1, Part II: HSA contributions you made yourself, the deductible half of self-employment tax, self-employed retirement and health insurance, a deductible traditional IRA contribution, student loan interest (up to $2,500), educator expenses, alimony under a divorce before 2019, and early-withdrawal penalties on savings.

What isn’t in AGI matters as much. Traditional 401(k) and 403(b) contributions, and health insurance and HSA money taken through payroll, are already left out of box 1 of your W-2. They lower AGI, and every MAGI with it, without appearing anywhere on Schedule 1.

The standard deduction and itemized deductions come after AGI. So do the four new deductions from 2025: car loan interest, tips, overtime and the senior deduction. They lower your taxable income, not your AGI, so claiming one never lowers your MAGI for anything else.

Step 2: a worked example, every version

A single filer, under 65, with:

• W-2 wages of $72,000 (box 1, after 401(k) contributions)
• Taxable bank interest of $1,200
• Municipal bond interest of $1,500, which is tax-exempt
• $3,000 paid into an HSA directly, not through payroll
• $2,000 of student loan interest

AGI: $72,000 + $1,200 = $73,200 of total income. Less the $3,000 HSA deduction and the $2,000 student loan interest deduction = $68,200.

Three different answers from one return, and each is right for its own rule. Notice what’s never added back: the HSA deduction. It lowers every version.

Step 3: compare it with the limit

The new federal deductions (2025 to 2028)

Two examples for a single filer:

• Car loan interest. MAGI of $110,000 is $10,000 over, so 10 × $200 = $2,000 comes off. With $3,000 of interest on a qualifying new car, the deduction is $1,000. Our monthly car payment calculator works this out year by year from the loan itself.
• Senior deduction. MAGI of $95,000 is $20,000 over. 6% of that is $1,200, so the deduction is $6,000 – $1,200 = $4,800.

Overtime and tips work the same way at a higher threshold. Our guide on how to calculate overtime pay shows the overtime deduction from start to finish.

Roth IRA, 2026

Between the two figures you can contribute part of the limit. The worksheet in IRS Publication 590-A shows the sum. Income from converting a traditional IRA to a Roth is subtracted, so a conversion doesn’t stop you contributing in the same year.

Medicare premiums (IRMAA)

Medicare uses your tax return from two years earlier. 2026 Part B and Part D premiums are set by 2024 MAGI, and a surcharge starts above $109,000 single or $218,000 joint. Each bracket is a cliff: one dollar over and the whole surcharge applies for the year. If your income has dropped since, because you retired for example, you can ask Social Security to use a more recent year with form SSA-44.

The premium tax credit

For marketplace health insurance, the credit is based on household income: the MAGI of you, your spouse and any dependent who has to file a return. Untaxed Social Security counts here, which surprises many early retirees. The income limits change with the year and with the law, so check HealthCare.gov for the year you’re buying cover.

Net investment income tax

The 3.8% tax applies to investment income when MAGI is above $200,000 single or $250,000 joint. These thresholds are fixed in the law and aren’t adjusted for inflation.

Ways to lower your MAGI

• Traditional 401(k) or 403(b) contributions. They come out before box 1, so they lower AGI and every MAGI built on it.
• HSA contributions, through payroll or on Schedule 1.
• A deductible traditional IRA contribution, where you qualify. Note that the Roth IRA MAGI adds this back.
• Self-employed retirement plans, such as a SEP or solo 401(k).
• Timing. Capital gains, Roth conversions and retirement withdrawals all raise MAGI in the year they happen. Spreading them can keep you under a threshold.

Tax-exempt interest is a trap here. It’s free of federal income tax but still counts toward Medicare premiums and the premium tax credit.

Common mistakes

• Using taxable income. MAGI is before the standard deduction, not after it.
• Using one MAGI for everything. Check which add-backs your rule uses.
• Forgetting the two-year lookback for Medicare.
• Counting 401(k) contributions twice. They’re already out of W-2 box 1; don’t subtract them again.
• Expecting the new deductions to lower MAGI. They come after AGI, so they don’t.

Frequently asked questions

Is MAGI the same as AGI?

Often, yes. For most people with no foreign income, tax-exempt interest or student loan interest, the numbers match. They differ when the rule you’re checking adds something back.

Where do I find my MAGI on my tax return?

Nowhere directly. Form 1040 shows AGI on line 11. Each MAGI is worked out from it on that rule’s own worksheet or form, such as Form 8962 for the premium tax credit.

Does MAGI include Social Security?

The taxable part of Social Security is already in AGI. For the premium tax credit, the untaxed part is added too. For the Roth IRA and the new deductions it isn’t.

Do 401(k) contributions reduce MAGI?

Traditional (pre-tax) 401(k) contributions do, because they’re left out of your wages before AGI is worked out. Roth 401(k) contributions don’t.

What MAGI is used for the car loan interest deduction?

AGI, plus any income excluded as foreign earned income or from Puerto Rico or American Samoa. For most US workers, that’s simply their AGI.

Sources

• IRS, Form 1040 and Schedule 1 instructions: total income and adjustments to income.
• IRS Publication 590-A, Contributions to Individual Retirement Arrangements: MAGI worksheets for Roth and traditional IRAs.
• IRS 2026 retirement plan limits: Roth IRA phase-out ranges.
• IRS Form 8962 instructions: household income for the premium tax credit.
• Social Security Administration and Medicare: 2026 income-related monthly adjustment amounts.
• Internal Revenue Code section 1411: net investment income tax.
• Public Law 119-21, sections 70201 to 70203 and 70103: tips, overtime, car loan interest and senior deductions, with their MAGI definitions.

Checked 5 November 2026. This guide explains general rules and isn’t tax advice. For a decision that depends on a threshold, check the current year’s IRS form or ask a tax professional.