Skip to content
English
More support
Go to app.holistiplan.com
  • There are no suggestions because the search field is empty.

Tax Report: Modified Adjusted Gross Income (MAGI) Section

There is no single calculation for Modified Adjusted Gross Income (MAGI); the tax code defines it in several different ways. This article explains how the MAGI Definitions section of the Tax Report brings those definitions together into one table to show eligibility for specific credits, deductions, and taxes.

At its core, the concept of Modified Adjusted Gross Income (MAGI) seems straightforward: take Adjusted Gross Income (AGI) and modify it. The tricky part is that while the tax code makes multiple references to MAGI, there isn't one single definition. Instead, different tax concepts (credits, deductions, tax subjectivity, etc.) use different calculations to arrive at MAGI.

The MAGI Tiers section in the Tax Report lists several items to consider and highlights the "Planning Opportunity," the "Limits" of the MAGI range (based on filing status) for that opportunity, and whether your client is "Above/Under" the limits. The text color will change depending on whether the client is under the limit (green), over the limit (red), or within a phaseout range (yellow).



This taxpayer’s MAGI precludes them from a handful of these planning opportunities. Note that the MAGI amount for Definition 3 (Roth IRA contribution eligibility) above is different than the others.

 

To hide specific opportunities based on a client’s situation, click the eye icon on the right-hand side, and that opportunity will be grayed out as shown below.  Items that have been grayed out in this section will not show up in presentation mode or on printouts.



In the example above, since this taxpayer doesn't have any children in college and isn't paying any education expenses, we might gray out the rows for the Lifetime Learning Credit, Student Loan Interest Deduction, and American Opportunity Credit, unless we wanted those items on the report in anticipation of discussing how we might control income when their children are of college age.

To view the equation for each MAGI definition, click the teal question mark (?) icon or view them at the bottom of the MAGI Definition section. 


As with the planning opportunities in the MAGI Tiers section, users can choose to show all, some, or none of these calculations by clicking the eye icon to the right of the equation.

Medicare-eligible clients are subject to a separate MAGI calculation to determine if they will owe Income Related Adjustment Amount (IRMAA) surcharges on their Medicare Part B/D Premiums, which we cover in greater length here: Tax Report: Medicare Part B/D Premiums.