Modified adjusted gross income, written MAGI, is adjusted gross income recomputed under a named list of items added back or left out, and each provision that needs the figure sets its own list, some of them outside the Internal Revenue Code and some without ever using the phrase. It is not a line on Form 1040: the phrase appears nowhere on the form, which carries adjusted gross income at line 11a and repeats it at line 11b (IRS, Form 1040 (2025)). One return can hold several MAGI figures at once, one per provision, and they need not agree.
What goes into adjusted gross income, and the statute that closes that list, is worked through in adjusted gross income. The IRS itself describes the calculation as per-benefit: add or subtract the items listed for the benefit being tested, use the result for that benefit only, then repeat the exercise for the next one (IRS, Modified adjusted gross income).
Four Provisions, Four Computations
Four statutes, read down to the subsection, set the computation four different ways.
The premium tax credit. MAGI means adjusted gross income increased by any amount excluded from gross income under section 911, tax-exempt interest received or accrued during the taxable year, and the portion of the taxpayer’s social security benefits, as defined in section 86(d), not included in gross income under section 86 (26 U.S.C. 36B(d)(2)(B)). The statute uses it as a component of household income, not as the tested amount.
The net investment income tax. MAGI means adjusted gross income increased by the excess of the amount excluded from gross income under section 911(a)(1) over the deductions or exclusions disallowed under section 911(d)(6) with respect to that amount (26 U.S.C. 1411(d)). The foreign earned income exclusion comes back net rather than gross, and tax-exempt interest and untaxed Social Security do not come back at all. The threshold it is measured against is in Medicare tax.
The traditional IRA deduction. The statute never says modified. It provides that adjusted gross income shall be determined after application of sections 86 and 469, and without regard to sections 85(c), 135, 137, 221, and 911 or the deduction allowable under this section (26 U.S.C. 219(g)(3)(A)). The Code sets the computation out without naming it, so the MAGI label here comes from outside the statute.
The Roth contribution limit. Adjusted gross income here is determined in the same manner as under section 219(g)(3), except that any amount included in gross income under subsection (d)(3) is not taken into account (26 U.S.C. 408A(c)(3)(B)(i)). Subsection (d)(3) is the rollover rule that puts a conversion into gross income, so a client who converted a traditional IRA carries two figures that differ by the conversion amount.
Two more versions share a single list. The state and local tax cap version (SALT deduction) and the senior deduction version (what the One Big Beautiful Bill changed for accounting firms) both take adjusted gross income increased by any amount excluded from gross income under section 911, 931, or 933 (26 U.S.C. 164(b)(7)(B)(iv), 26 U.S.C. 151(d)(5)(C)(iii)(II)).
Where Each MAGI Gets Built on the Return
A preparer cannot look MAGI up; each figure is built where its own provision is worked.
The IRA Deduction Worksheet for Schedule 1, line 20 builds its figure by subtraction and never uses the label: it takes Form 1040 line 9, subtracts the total of Schedule 1 lines 11 through 19a plus 23 and 25, and runs the phase-out off that difference (IRS, Instructions for Form 1040 (2025)). The student loan interest instructions in the same booklet do use it, sending the preparer to lines 2 through 4 of that deduction’s own worksheet to figure modified AGI. Form 8960 asks for it outright at line 13 (IRS, Form 8960 (2025)), and Schedule A’s State and Local Tax Deduction Worksheet produces another (SALT deduction).
So a figure carried from one worksheet into a different provision is a wrong input, even where two worksheets carry the same label.
Common Questions
Before. MAGI is built on adjusted gross income, and the return reaches AGI at line 11a before any standard or itemized deduction is subtracted (IRS, Form 1040 (2025)). The rest of the order, from AGI down to taxable income, is in adjusted gross income.
By a different authority. The income-related monthly adjustment amount is defined in the Social Security Act rather than the Code, and there MAGI means adjusted gross income as defined in section 62, determined without regard to sections 135, 911, 931 and 933, increased by tax-exempt interest received or accrued during the taxable year (42 U.S.C. 1395r(i)(4)(A)). It also comes off an older return: the amount for the individual’s last taxable year beginning in the second calendar year preceding the year involved (42 U.S.C. 1395r(i)(4)(B)).
Firms losing review hours to this kind of per-provision rework can test our offshore preparers on a block of their own returns first, through a trial task.
