Your adjusted gross monthly income is your total monthly taxable income minus specific deductions as specified by the Internal Revenue Service. When calculated on a yearly basis, this AGI determines how much tax you are liable to pay. However, if you need to determine your eligibility for social programs such as Medicaid and Section 8 housing, or need to calculate child support obligations, you'll need to break down that figure to determine your adjusted gross monthly income.
Determine your wages, salary and tips by referring to your W-2 form or Form 1099. The information is located on the first line of your official W-2 statement and on the seventh line of Form 1099. If you need to calculate the adjusted gross monthly income for the family, make sure you have reports for every working individual.
Include the following income types in the amount of wages, salary and tips you calculated above: taxable interest, ordinary dividends, capital gains, taxable IRA distributions, pensions, annuities, income from rental properties, farm income, alimony, unemployment income and taxable social security benefits. This figure is your gross income.
Calculate the amount of your allowed deductions. These include IRA contributions, student loan interest, moving expenses, half of the self-employment tax, your self-employed health insurance contribution, alimony you paid and retirement contributions to a Simplified Employee Pension (SEP) plan or a SIMPLE IRA plan.
Subtract your allowed deductions from your gross income. This figure is your annual adjusted gross income.
Divide your adjusted gross income by 12 to obtain your adjusted monthly gross income.
Listed here are some of the most common allowed deductions. For a full list, view United States Code Title 26, 62. Adjusted Gross Income Defined.
- CNN Money: What's Your AGI
- United States Code Title 26, 62. Adjusted Gross Income Defined
- Internal Revenue Service. "Form 1040: U.S. Individual Income Tax Return," Page 1. Accessed
- Internal Revenue Service. "Adjusted Gross Income." Access Feb. 25, 2020.
- Internal Revenue Service. "Form 1040: U.S. Individual Income Tax Return," Pages 1-2. Accessed
- Internal Revenue Service. "Topic No. 458 Educator Expense Deduction." Accessed Feb. 25, 2020.
- Internal Revenue Service. "Gross Income." Accessed March 6, 2020.
- Listed here are some of the most common allowed deductions. For a full list, view United States Code Title 26, 62. Adjusted Gross Income Defined.
Lynn Burbeck is a professional writer with over five years of experience writing for the Web. She has published numerous articles for print and online media including "Grit" Magazine. Burbeck holds a B.A. in journalism and political science.