Depending on your filing status, you may be subject to an AGI limita dollar amount that limits the deductions you can takewhich usually applies to higher income earners. Thats especially important because deductions and credits can increase your tax refund or reduce the amount of taxes you owe. Your AGI impacts many of the tax deductions and credits you can take at tax time.
The result is your net income based on your tax return. Take your taxable income listed on your Form 1040 and then subtract your total tax.
You can calculate it using information from your federal tax return. You may also see the term net income when filing income taxes. Nontaxable income can include gift income and income used for certain retirement contributions. That said, nontaxable types of income arent included in total income. In this case, most people use the term gross income to refer to your total income, which you can find on Form 1040. You may see the term gross income come up when filing your income taxes. How to Figure Out Adjusted Gross Income – TurboTax Tax Tip Video
