Categories: Income

Modified Adjusted Gross Income: All You Need to Know About Forex Trading

Modified Adjusted Gross Income (MAGI) is a measure of total income used to determine eligibility for certain tax credits and deductions. It is calculated by adding all above-the-line deductions — such as student loan interest, contributions to certain retirement accounts, alimony, and half of self-employment taxes — to an individual’s gross income. MAGI can also play a role in determining the Foreign Income Exclusion, which allows certain taxpayers to exclude certain foreign-earned income from taxation. This can be an important tool for those attempting to manage their foreign exchange exposure and gain tax savings.

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