Adjusted Gross Income
What's the importance of your adjusted gross income (AGI)?
How you can reduce your AGI
What's the importance of your adjusted gross income (AGI)?
Your AGI is a very important number in many deductions if you itemize
Theses itemized deductions directly depend on your AGI
- Medical expenses
- Casualty and theft
- Miscellaneous expenses
Plus, many other items are related to your AGI
- Deductibility of IRA contribution
- Deductibility of rental losses
- Loss of itemized deductions for high-income people
- Charitable giving if you give a large portion of your income
A smaller AGI will reduce your taxes
How you can reduce your AGI
Don't make as much money!
But this probably isn't a popular "strategy"!
You should work to reduce your AGI by contributing to retirement accounts
Business and rental related losses can also reduce your AGI