1. What is a MAGI Calculator for Roth Contributions?

Definition: This calculator estimates your Modified Adjusted Gross Income (MAGI) which determines your eligibility to contribute to a Roth IRA.

Purpose: It helps taxpayers understand their MAGI calculation which affects Roth IRA contribution limits and phase-outs.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( MAGI \) — Modified Adjusted Gross Income (USD)
• \( AGI \) — Adjusted Gross Income from your tax return (USD)
• \( \text{traditional IRA deduction} \) — Deduction for traditional IRA contributions (USD)
• \( \text{student loan interest} \) — Deductible student loan interest (USD)
• \( \text{tuition} \) — Qualified tuition and fees deduction (USD)
• \( \text{foreign income exclusion} \) — Foreign earned income exclusion (USD)

Explanation: MAGI starts with your AGI and adds back certain deductions and exclusions that were subtracted to calculate AGI.

3. Importance of MAGI Calculation

Details: MAGI determines your eligibility to contribute to Roth IRAs and affects contribution limits. For 2023, the phase-out range begins at $138,000 for single filers and $218,000 for married filing jointly.

4. Using the Calculator

Tips: Enter your AGI from your tax return and any applicable deductions/exclusions. 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 2022 Form 1040 (or line 8b of 2021 Form 1040).

Q2: What other items might affect MAGI?
A: Other possible additions include rental losses, passive income/losses, and taxable Social Security benefits.

Q3: Why does MAGI matter for Roth IRAs?
A: Roth IRA contribution limits phase out at certain MAGI thresholds based on your filing status.

Q4: Is this calculator tax advice?
A: No, consult a tax professional for advice specific to your situation.

Q5: How often should I check my MAGI?
A: Annually, as part of your tax planning, especially if your income is near the phase-out thresholds.