1. What is MAGI for Roth IRA?

Definition: Modified Adjusted Gross Income (MAGI) determines your eligibility to contribute to a Roth IRA and how much you can contribute.

Purpose: Roth IRA contributions have income limits based on MAGI. This calculator helps determine your exact MAGI for Roth IRA purposes.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( \text{MAGI} \) — Modified Adjusted Gross Income
• \( \text{AGI} \) — Adjusted Gross Income from your tax return
• \( \text{IRA Deduction} \) — Traditional IRA deductions you took
• \( \text{Student Loan Interest} \) — Deductible student loan interest
• \( \text{Tuition} \) — Qualified tuition and fees deduction
• \( \text{Foreign Income Exclusion} \) — Foreign earned income exclusion

Explanation: Certain deductions and exclusions must be added back to your AGI to calculate your MAGI for Roth IRA purposes.

3. Importance of MAGI Calculation

Details: Knowing your MAGI helps determine if you can contribute to a Roth IRA and how much. For 2023, phase-outs begin at $138,000 (single) and $218,000 (married filing jointly).

4. Using the Calculator

Tips: Enter your AGI from your tax return and any applicable deductions/exclusions. Most fields default to 0 if you didn't claim them.

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 if I didn't take any of these deductions?
A: Your MAGI equals your AGI if you didn't take any of these deductions.

Q3: Are there other items that affect MAGI?
A: Yes, this calculator covers common ones. Others include rental losses, passive income losses, and excluded savings bond interest.

Q4: How often should I check my MAGI?
A: Annually, before making Roth IRA contributions, as income limits may change.

Q5: What if my MAGI is too high?
A: You may need to reduce contributions or consider a backdoor Roth IRA strategy.