Adjustments to Income

Adjustments to Income

Adjustments are certain expenses which directly reduce your total income. You do not need to itemize your deductions in order to claim these expenses. Adjustments reduce your total income to arrive at your Adjusted Gross Income (AGI).

• Classroom expenses
• Qualified performing artists and other professions
• IRA deduction
• Student loan interest
• Tuition and fees deduction
• Health savings account deduction
• Moving expenses
• Self-employment tax deduction
• Self-employment health insurance
• SEP deduction
• Early withdrawal penalty
• Alimony paid
• Domestic Production Activities Deduction (a new deduction for businesses)

Line 36: Total Adjustments to Income

Using a calculator, add the amounts from lines 23 to 35. Enter the total figure on Line 36. This represents your total adjustments.

Line 37: Adjusted Gross Income

Using a calculator, enter the amount from line 22 (total income), and subtract the amount from line 36 (total adjustments). Enter the result on Line 37. This figure represents your Adjusted Gross Income, which is a standard measure of your income for various tax items, bank loans, and college financial aid.

Line 38: Adjusted Gross Income, again

On line 38, put the same figure found on Line 37. Line 38 is found on page two of your Form 1040.

Deductions & Figuring Your Tax

Figuring Income

Form 1040 Essentials