Your adjusted gross income plays a large role when factoring your income taxes. Generally, your AGI includes your gross income, including wages, dividends, pensions, unemployment compensation and self-employment income, minus any adjustments. Adjustments reduce your income and lessen your tax burden. The Internal Revenue Service uses your AGI to calculate several tax credits and bases numerous deductions off a percentage of your AGI. Although it is difficult to figure your exact AGI off an hourly wage, you can calculate an estimate of what your AGI should be at the end of the year.
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
Subtract your total adjustments from your gross income to determine your estimated AGI. Using the previous example, if your adjustments are $14,200, your AGI is $152,400, or $166,600 minus $14,200.
- If you do not qualify for adjustments to your income, your estimated AGI is your total gross income.
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