Adjusted gross income (AGI) for married filing jointly represents the taxable income of a married couple filing jointly, after subtracting certain deductions and adjustments from their total income. For instance, if a married couple earns $100,000 annually and contributes $6,000 to a traditional IRA, their AGI would be $94,000.
Determining AGI is crucial for calculating federal income taxes, as it forms the basis for various tax brackets, deductions, and credits. Understanding how to find AGI is essential for accurate tax reporting and optimizing tax savings. Historically, the concept of AGI emerged in the 1950s to simplify tax calculations and provide a more equitable tax system.