Adjusted Gross Income

Adjusted Gross Income or AGI is the term used primarily by the Internal Revenue Service to describe a taxpayer's gross income less a set of standard adjustments to that income.  Adjustments that are made to gross income include things such as moving expenses, alimony, tax penalties on early withdrawals, and contributions to an individual retirement accounts.

The adjusted gross income has become a standard measure for the IRS to determine eligibility for other beneficial programs such as IRAs and earned income credits.  The adjusted gross income is usually reported on line 35 of the tax return or Form 1040.