Modified Adjusted Gross Income - MAGI (EA Exam)
Modified Adjusted Gross Income (MAGI) is AGI with certain deductions and exclusions added back. The specific add-backs vary by tax provision. MAGI is used to determine Roth IRA eligibility, premium tax credit, Medicare surcharges, passive activity loss limits, and education credit phase-outs.
Exam Tip
MAGI = AGI + specific add-backs (varies by provision). No single formula. Key thresholds: Roth IRA, PTC, NIIT ($200K/$250K), Medicare surcharges. Starts with AGI Line 11.
What is MAGI?
MAGI starts with AGI and adds back specific items depending on which tax provision is being evaluated. There is no single MAGI formula -- each provision defines its own version.
Common MAGI Add-Backs
| Add-Back Item | Applicable Provisions |
|---|---|
| Student loan interest deduction | Roth IRA, education credits |
| IRA deduction | Roth IRA eligibility |
| Foreign earned income exclusion | Premium tax credit, Medicare surcharges |
| Adoption assistance exclusion | Education credits |
| Passive activity losses | Rental real estate exception |
Key MAGI Thresholds (2025)
| Provision | Single | MFJ |
|---|---|---|
| Roth IRA contribution | $150,000-$165,000 | $236,000-$246,000 |
| Premium Tax Credit | 100-400% FPL | 100-400% FPL |
| NIIT (3.8%) | $200,000 | $250,000 |
| Additional Medicare Tax (0.9%) | $200,000 | $250,000 |
| Medicare Part B/D surcharge | $106,000 | $212,000 |
Exam Alert
MAGI definition varies by provision -- there is NO single formula. For the EA exam, know which items are added back for each provision. Most common: Roth IRA eligibility, PTC, NIIT, and Medicare surcharges. MAGI always starts with AGI from Line 11 of Form 1040.
Study This Term In
Related Terms
Adjusted Gross Income (AGI)
Adjusted Gross Income (AGI) is gross income minus above-the-line deductions (adjustments to income). AGI is the key threshold used to determine eligibility for many tax credits, deductions, and phase-outs on Form 1040.
Earned Income Tax Credit (EITC)
The Earned Income Tax Credit (EITC/EIC) is a refundable tax credit for low-to-moderate income workers. The maximum credit for 2025 is $7,830 with 3+ qualifying children. Taxpayers must have earned income, a valid SSN, and investment income below $11,600.
Education Credits (AOTC and LLC)
Education credits reduce tax for qualified education expenses. The American Opportunity Tax Credit (AOTC) provides up to $2,500 for the first 4 years of college (40% refundable). The Lifetime Learning Credit (LLC) provides up to $2,000 with no limit on years and is non-refundable. You cannot claim both for the same student in the same year.
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