What is Adjusted Gross Income and Why is it Important?
When it comes to navigating the intricacies of tax filing, there’s one term that often leaves individuals perplexed: Adjusted Gross Income (AGI). AGI is a vital factor employed by the Internal Revenue Service (IRS) to determine both your taxable income and your qualification for various tax credits and deductions.
Think of Adjusted Gross Income as the linchpin that holds the intricate tapestry of your tax obligations together. It serves as the pivotal point from which the IRS assesses your financial standing and calculates the amount of income subject to taxation. AGI wields its influence in multiple dimensions, unveiling a multitude of possibilities that can significantly impact your tax liability.