MAGI is your AGI with certain deductions added back
The IRS uses MAGI, not AGI, to decide whether you qualify for a Roth IRA, an education credit, the Premium Tax Credit and similar limits. It takes your AGI and puts back a handful of items that AGI had removed. For most people with no foreign income, no muni-bond interest and no IRA deduction, MAGI equals AGI exactly.
What gets added back
These are the items most versions of MAGI restore to AGI. You will not have most of them.
| Added back | Typical cap |
|---|---|
| Student loan interest deduction | up to $2,500 |
| Traditional IRA deduction | the amount you deducted |
| Foreign earned income exclusion | up to $130,000 (2025) |
| Foreign housing exclusion / deduction | varies by location |
| Tax-exempt interest (muni bonds) | full amount |
| Excluded U.S. savings bond interest | full amount |
The precise list is set by each benefit. For example, the MAGI for the Premium Tax Credit adds back tax-exempt interest, excluded foreign income and the non-taxable half of Social Security, while the Roth IRA version leaves Social Security out.
The thresholds MAGI controls
- Roth IRA. Contributions phase out over a MAGI band that depends on filing status; above the top of the band you cannot contribute directly.
- Traditional IRA deduction. When you or a spouse are covered by a workplace plan, MAGI decides how much of the contribution is deductible.
- Education credits. The American Opportunity and Lifetime Learning credits phase out by MAGI.
- Premium Tax Credit and IRMAA. ACA marketplace subsidies and the Medicare Part B/D surcharge are both tied to a MAGI figure.
The mistake people make
Because MAGI is only ever equal to or above AGI, adding an item back can push you over a limit you thought you cleared. Someone just under a Roth cap on AGI can be over it on MAGI once foreign income or muni interest goes back in. Check the number against the specific benefit before you contribute.
Common questions
Is MAGI the same as AGI?
No. AGI is the starting point; MAGI adds certain deductions and excluded income back on top of it. MAGI is always equal to or higher than AGI, never lower. You use AGI to figure your tax, and MAGI to test whether you qualify for things like a Roth IRA.
Which deductions get added back to AGI?
The common ones are the student loan interest deduction, the traditional IRA deduction, the foreign earned income and foreign housing exclusions, and tax-exempt interest such as municipal bond income. The exact list changes slightly depending on which credit or limit you are testing.
Why is there more than one MAGI?
There is no single MAGI. Each tax benefit defines its own version with its own add-backs. The MAGI for Roth IRA eligibility is not the same formula as the MAGI used for the Premium Tax Credit or for taxing Social Security, so always use the definition for the specific benefit.
How can I lower my MAGI?
Since MAGI builds on AGI, anything that cuts AGI also cuts MAGI: pre-tax contributions to a workplace 401(k), a deductible traditional IRA, an HSA, or self-employed retirement plans. Deductions that get added back, like the traditional IRA deduction for Roth purposes, will not help.
