AGI and taxable income sound similar, but they impact your return in different ways. This episode covers how AGI is calculated, how taxable income is determined, and why lowering AGI can help you qualify for valuable deductions and credits.Have questions about planning moves that may reduce AGI? Visit elevate-wealth.com and click Let’s Talk.#Taxes #TaxPlanning #ElevateWealthAdvisory

AGI or taxable income? Which one actually matters for my return? Find out today on Elevate Wealth. Welcome to Elevate Wealth. I'm your host, Preston Wilkie. And today, I'm joined by the CEO of Elevate Wealth Advisory, Deanne Roso. Welcome, Deanne. Hey, Preston. It's great to be here. Great to be here, too. Deanne, can you walk us through what AGI is and what taxable income is ,and why the difference matters? Sure. So, AGI is your adjusted gross income. And what that means is we take all of your income, add it up together, and then subtract out some of what we call above-the-line deductions. So things like HSA contributions, or IRA contributions, or student loan interest deduction if you qualify for that, those types of things. And so that's what we call above the line. And then your adjusted gross income comes from that. Then there's taxable income, that comes next. So you take your adjusted gross income and subtract from that itemized or standard deductions to arrive at what your taxable income is. Okay. So why does AGI matter so much? Another great question, because a lot of common deductions or credits or phase outs or things, are based on the AGI, and so a helpful hint is to try to find ways that lower that AGI or deductions that are above the line. So doing things like making retirement plan contributions, IRA contributions, HSA contributions, those types of things all contribute to lowering that adjusted gross income, or AGI. And those types of things can really help you pay less, that will lower your taxable income, especially if you are near a phase out limit. Okay. Thank you, Deanne. Sure. The key takeaway is that AGI can impact a lot of credits and deductions, and taxable income is what your tax brackets are applied to. So knowing the difference really matters. If you'd like help spotting legal ways to lower your AGI or avoid phase outs, our team's happy to assist you. Visit elevate-wealth.com, click let's talk, and we'll see you next time.