Determining your Adjusted Gross Income (AGI) is fundamental when calculating eligibility and contribution limits for a Roth IRA. AGI, simply put, is your total income minus certain adjustments and deductions.
Calculating AGI for a Roth IRA involves understanding exclusions like student loan interest or contributions to a traditional IRA. It is essential knowledge for tax planning, optimizing retirement savings, and meeting contribution limits. The Tax Cuts & Jobs Act of 2017 increased the standard deduction, affecting AGI calculations.