# How to Calculate Adjusted Gross Income With an Hourly Wage

Step 1

Calculate the estimated number of hours you work in a year. If you work 40 hours per week, your total annual hours is 2,080, or 40 hours times 52 weeks.

Step 2

Multiply your total annual hours by your hourly wage to determine an estimate of your gross income. Using the previous example, if you work 2,080 hours per year and receive \$20 per hour from your employer, your gross income is \$41,600, or 2,080 times \$20.

Step 3

Factor in any other income, such as income from a small business, a second job or your spouse's income. If you also expect to profit \$125,000 from your small business, for example, add this amount to your gross income. Using the previous example, your total gross income is \$166,600, or \$41,600 plus \$125,000.

Step 4

Calculate your adjustments. As of the 2012 tax year, adjustments that qualify you to reduce your gross income include up to \$250 for qualified educator expenses, \$6,000 for contributions to an IRA, up to \$4,000 for tuition and fees and a maximum of \$2,500 for student loan interest. Adjustments change annually, so refer to Publication 17 -- Adjustments to Income for more information.

Step 5

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