One AGI, many MAGIs
AGI is a real line on your return. MAGI is not; it is a family of recalculations, each defined by the specific credit, contribution limit, or surtax being tested. The single most useful fact on this topic is that "MAGI" means nothing until you name the provision.
The good news for most households: the add-backs are exotic (foreign earned income exclusion, certain bond interest, excluded adoption benefits), so for a typical W-2 or business household, MAGI equals AGI for nearly every test. The trap is assuming that when it matters most, at a phase-out boundary.
This guide keeps the calculation stages straight (for the full walk from gross income to AGI, see our how-to-calculate-AGI guide), then maps the major MAGI definitions to their 2026 thresholds.
Because so many benefits phase out on AGI-based tests, a dollar of above-the-line deduction (HSA, self-employed retirement, deductible IRA) can be worth more than its bracket value when it pulls MAGI back under a threshold like the $200,000 NIIT line or the Roth phase-out band.
AGI in one minute
The return’s master number
AGI is total income (wages, business profit, capital gains, rental results, interest, dividends, retirement distributions) minus above-the-line adjustments: HSA contributions, self-employed retirement plans, half of self-employment tax, self-employed health insurance, deductible traditional IRA contributions, and a few others.
AGI is computed before the standard or itemized deduction, which is why it sits upstream of taxable income and why so many eligibility rules test it: it approximates economic income before personal choices about deductions.
Everything below AGI on the return (standard deduction, QBI deduction, taxable income) has no effect on any MAGI. A bigger itemized deduction never rescues a blown MAGI threshold.
A worked contrast makes the stakes concrete. Consider two joint households with identical $260,000 salaries. One maxes two 401(k)s ($49,000 of combined 2026 deferrals) and a family HSA ($8,750), bringing AGI near $202,250. The other saves the same dollars in a taxable brokerage account and shows $260,000 of AGI. The first household sits under the $242,000 Roth phase-out floor and the $250,000 NIIT threshold; the second is over the NIIT line and inside the Roth band. Same pay, same savings rate, completely different threshold outcomes, entirely because of where the savings happened.
That contrast is the whole argument for treating AGI as a managed number rather than an outcome. The levers are ordinary, the deadlines are mostly December 31 (April 15 for HSA and IRA dollars), and the payoff shows up in eligibility tests scattered across the code.
Which MAGI applies to which rule
The add-backs change with the provision
Note the pattern: some thresholds are indexed annually (Roth and IRA phase-outs moved again for 2026), while others are statutory and frozen (NIIT at $200,000/$250,000 since 2013). Frozen thresholds quietly capture more taxpayers every year as incomes grow.
| Provision | Starting point and main add-backs | 2026 threshold |
|---|---|---|
| Roth IRA contribution phase-out | AGI minus Roth conversion income, plus foreign earned income exclusion and certain other add-backs | Phase-out $153,000 to $168,000 single; $242,000 to $252,000 MFJ (Notice 2025-67) |
| Traditional IRA deduction (covered by a plan) | Similar IRA-specific MAGI | Phase-out $81,000 to $91,000 single; $129,000 to $149,000 MFJ contributing spouse |
| Net investment income tax (3.8%) | AGI plus foreign earned income exclusion adjustments | $200,000 single/HoH; $250,000 MFJ; $125,000 MFS (statutory, not indexed) |
| OBBBA senior deduction ($6,000, 65+) | MAGI per the provision | Phases out at 6% of MAGI over $75,000 single / $150,000 MFJ |
| Additional Medicare tax (0.9%) | Wages and SE income, not a MAGI test | $200,000 single; $250,000 MFJ; $125,000 MFS |
Always confirm the definition inside the provision’s own form instructions (Form 8962, Form 8960, Pub 590-A) before relying on a threshold.
Worked example: the Roth phase-out band
Where one MAGI dollar changes a contribution
A married couple has $240,000 of AGI plus $5,000 of tax-exempt municipal bond interest. For Roth IRA purposes, the muni interest is not added back (it is excluded from the Roth MAGI add-back list), but suppose instead the couple’s AGI is $245,000 with no adjustments: they land inside the 2026 joint phase-out band of $242,000 to $252,000.
Worked example
MFJ couple, 2026 Roth IRA phase-out, MAGI $245,000
- 2026 Roth IRA limit (under 50)
- $7,500
- MAGI over the $242,000 phase-out floor
- $3,000
- Phase-out band width
- $10,000
- Reduction fraction
- 30%
- Allowed direct Roth contribution (each spouse)
- $5,250
Illustrative per Notice 2025-67 figures. A $4,400 family HSA contribution or larger 401(k) deferral does not change Roth MAGI (401(k) deferrals never reached AGI), but above-the-line deductions like an HSA made outside payroll would lower it. Results vary.
Taxstra Tip
If MAGI is hovering near a phase-out floor in December, above-the-line moves still available (HSA contributions until April 15, SEP contributions until the filing deadline for the self-employed) can pull the number back under the line after year-end.
Planning around MAGI thresholds
What moves the number and what does not
Reduces AGI and therefore every MAGI: pre-tax 401(k) deferrals (they never enter wages), HSA contributions, self-employed retirement plans, deductible self-employed health insurance, capital losses up to the netting rules, and rental losses where allowed.
Does not help any MAGI: itemized deductions, charitable gifts (with the exception of qualified charitable distributions from an IRA, which keep the distribution out of AGI entirely for those 70½ or older), and the QBI deduction. These reduce taxable income downstream of every threshold test.
Increases MAGI in ways people miss: Roth conversions (they raise AGI in the conversion year, though conversion income is excluded from the Roth contribution MAGI specifically), large capital gains, and mutual fund distributions in taxable accounts. A one-time income spike can trip NIIT and other threshold tests all in the same year.
Threshold management is a multi-year game for households with lumpy income. If a business sale or vesting cliff is coming, the year before and the year after are often the right places for conversions and gain harvesting, keeping each year under the thresholds that matter rather than piling every income event into one year that trips all of them. This is also where the frozen thresholds bite: the NIIT lines never index, so a plan that skates under them today drifts over them on inflation alone.
Check the year and the definition, every time
Indexed thresholds move annually and each provision defines MAGI differently. Applying the Roth band to a NIIT question, or a 2025 threshold to a 2026 decision, produces confident wrong answers.
The major MAGI definitions, mapped by provision
Same starting point, different add-backs, different stakes
The table below maps the major MAGI definitions at a structural level. Where a threshold is verified for 2026 it appears elsewhere on this page; for the others, the shape of the rule matters more than a number that changes annually, and the controlling figure should be read from the provision’s own current-year instructions.
The Medicare IRMAA version deserves its own caution because of the lookback: premium surcharges for a given year are set from the return filed two years earlier. A large Roth conversion or capital gain at 63 shows up as a Medicare premium surcharge at 65. It is the clearest example of a MAGI consequence that arrives long after the income decision, and it is routinely missed in conversion planning.
The ACA premium tax credit uses one of the broadest definitions, adding back tax-exempt interest, the nontaxable portion of Social Security, and excluded foreign income. For early retirees buying marketplace coverage before Medicare, this MAGI effectively sets the price of health insurance, and modest income moves near the relevant thresholds can swing the annual premium credit by thousands of dollars.
| Provision | Starting point and main add-backs | Threshold behavior |
|---|---|---|
| Roth IRA contributions | AGI minus Roth conversion income, plus foreign earned income exclusion and certain other items | Indexed annually; 2026 bands shown above |
| Traditional IRA deduction | Similar IRA-specific definition | Indexed annually; 2026 bands shown above |
| Net investment income tax | AGI plus certain foreign exclusion adjustments | Statutory and frozen: $200,000 / $250,000 / $125,000 |
| Medicare IRMAA | AGI plus tax-exempt interest, from the return two years prior | Tiered premium surcharges, set annually by Medicare |
| ACA premium tax credit | AGI plus tax-exempt interest, nontaxable Social Security, excluded foreign income | Tested against federal poverty line percentages |
| Education credits | AGI plus foreign exclusion items | Phase-out bands; check current-year Form 8863 instructions |
Structural summary. Read each provision’s current-year worksheet before relying on any threshold not printed on this page.
How to compute your own MAGI
From the AGI line to the answer, per provision
To compute any MAGI, start from the AGI line on your Form 1040, then work through the specific provision’s worksheet: Publication 590-A for IRA tests, Form 8960 for NIIT, Form 8962 for the premium credit. Resist the shortcut of reusing a number your software labeled "MAGI" for a different rule; the label rarely says which definition it used.
For most households the arithmetic collapses quickly: no foreign exclusions, no excluded savings bond interest, and no adoption exclusions means most add-backs are zero and MAGI equals AGI. The worksheet is still worth running once, because the households that do have an add-back (expats using the foreign earned income exclusion above all) get materially different answers and often owe tests they assumed they passed.
Document which definition and which year you used whenever a decision hinges on MAGI. Thresholds move annually for the indexed provisions, and a note that says "under the 2026 Roth band" ages far better than a bare number.
Taxstra Tip
When software blocks a contribution or credit you expected, check which MAGI it computed before assuming you are ineligible. Preparer software applies the right definition per provision, but a mistyped 1099 or misplaced exclusion upstream distorts every MAGI at once.
What to check before you act
A practical review sequence for the return, books, or planning file.
Name the specific provision before computing any MAGI.
Start from AGI on your latest return and apply only that provision’s add-backs.
Confirm the current-year threshold; Roth and IRA bands moved again for 2026.
Use above-the-line deductions, not itemized ones, when a threshold is in reach.
Model Roth conversions and gain harvesting against every threshold they might trip.
Recompute after any large one-time income event.
Common mistakes
The shortcuts most likely to produce a confident but wrong answer.
Treating MAGI as one universal number
The Roth test, NIIT, and IRMAA each add back different items. Using one computed MAGI for all of them can misstate eligibility in both directions.
Trying to fix a MAGI problem with itemized deductions
Charitable gifts and mortgage interest reduce taxable income, which sits below AGI. They cannot pull MAGI under any threshold.
Forgetting that Roth conversions raise AGI
A conversion executed to "fill a bracket" can simultaneously push MAGI over the NIIT threshold and, for those on Medicare, into a higher premium tier two years later. Model all the thresholds, not just the bracket.
Using last year’s phase-out bands
The 2026 Roth phase-out is $153,000 to $168,000 single and $242,000 to $252,000 joint, up from 2025. A contribution sized on stale bands can create an excess contribution with a 6% annual excise until corrected.
Assuming taxable income is close enough
Taxable income is AGI minus deductions and can run $16,100 to $32,200-plus below AGI in 2026. Substituting it into a MAGI test understates income and overstates eligibility.
How Taxstra helps
A useful estimate should lead to a decision
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