Modified Adjusted Gross Income (MAGI)
Modified Adjusted Gross Income (MAGI) is AGI with certain deductions or exclusions added back, used to determine eligibility for Roth IRA contributions, education credits, and other tax benefits with varying definitions depending on the specific tax provision.
Exam Tip
MAGI = AGI + certain add-backs (varies by provision). Memorize Roth IRA MAGI limits: Single $150K-$165K (2025), MFJ $236K-$246K (2025). No Roth contribution above limits.
What is Modified Adjusted Gross Income (MAGI)?
MAGI starts with your AGI and adds back certain deductions or exclusions. The exact calculation varies depending on which tax benefit you're evaluating, as different provisions use different MAGI definitions.
Common MAGI Calculations
| Tax Provision | MAGI = AGI + |
|---|---|
| Roth IRA Contributions | Foreign earned income exclusion, housing exclusion, student loan interest, IRA deduction, Series EE interest exclusion |
| Traditional IRA Deduction | Student loan interest, tuition deduction (if applicable) |
| Premium Tax Credit (ACA) | Tax-exempt interest, non-taxable Social Security |
| Education Credits (AOTC/LLC) | Foreign income exclusions |
| Child Tax Credit | Same as AGI for most taxpayers |
2025-2026 MAGI Thresholds for Key Provisions
Roth IRA Contribution Limits
| Filing Status | 2025 Phase-Out | 2026 Phase-Out |
|---|---|---|
| Single/HOH | $150,000 - $165,000 | $153,000 - $168,000 |
| Married Filing Jointly | $236,000 - $246,000 | $242,000 - $252,000 |
| Married Filing Separately | $0 - $10,000 | $0 - $10,000 |
Traditional IRA Deduction (If Covered by Workplace Plan)
| Filing Status | 2025 Phase-Out | 2026 Phase-Out |
|---|---|---|
| Single/HOH | $79,000 - $89,000 | $81,000 - $91,000 |
| MFJ (participant) | $126,000 - $146,000 | $129,000 - $149,000 |
| MFJ (spouse is participant) | $236,000 - $246,000 | $242,000 - $252,000 |
Other MAGI-Based Limits (2025)
| Provision | Single/HOH | MFJ |
|---|---|---|
| Lifetime Learning Credit | $80,000 - $90,000 | $160,000 - $180,000 |
| American Opportunity Credit | $80,000 - $90,000 | $160,000 - $180,000 |
| Saver's Credit | Up to $38,250 | Up to $76,500 |
CFP Exam Focus
Know that MAGI definitions vary by provision. For the exam, the most commonly tested MAGI thresholds are:
- Roth IRA contribution eligibility
- Traditional IRA deductibility
- Education credit phase-outs
- Passive activity loss $25,000 allowance ($100K-$150K phase-out)
Study This Term In
Related Terms
Adjusted Gross Income (AGI)
Adjusted Gross Income (AGI) is your total gross income minus specific above-the-line deductions (adjustments), serving as the starting point for calculating taxable income and determining eligibility for many tax benefits.
Roth IRA
A Roth IRA is a retirement account funded with after-tax dollars that grows tax-free and allows tax-free withdrawals in retirement, with no required minimum distributions.