1. What is MAGI for NIIT?

Definition: Modified Adjusted Gross Income (MAGI) for Net Investment Income Tax (NIIT) is calculated by adding foreign earned income exclusion to your Adjusted Gross Income (AGI).

Purpose: This calculation helps determine if you're subject to the 3.8% Net Investment Income Tax under IRS rules.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( \text{MAGI} \) — Modified Adjusted Gross Income for NIIT (USD)
• \( \text{AGI} \) — Adjusted Gross Income from your tax return (USD)
• \( \text{Foreign Earned Income Exclusion} \) — Amount excluded under IRS Form 2555 (USD)

Explanation: The foreign earned income exclusion is added back to AGI to calculate MAGI for NIIT purposes.

3. Importance of MAGI Calculation for NIIT

Details: NIIT applies if your MAGI exceeds $200,000 (single) or $250,000 (married filing jointly). Proper calculation helps determine tax liability.

4. Using the Calculator

Tips: Enter your AGI from Form 1040 and any foreign earned income exclusion from Form 2555. All values must be ≥ 0.

5. Frequently Asked Questions (FAQ)

Q1: Where do I find my AGI?
A: AGI is on Line 11 of your Form 1040 (2022 and later) or Line 8b of Form 1040 (prior years).

Q2: What is foreign earned income exclusion?
A: This is income excluded under IRS Form 2555 for qualifying taxpayers living abroad.

Q3: Are there other MAGI calculations?
A: Yes, MAGI definitions vary for different tax purposes (ACA, student loans, etc.). This calculator is specific to NIIT.

Q4: What if I don't have foreign income?
A: Enter 0 for foreign earned income exclusion - your MAGI will equal your AGI.

Q5: When is NIIT triggered?
A: NIIT applies when MAGI exceeds $200,000 (single) or $250,000 (MFJ) and you have net investment income.