How to Calculate an AGI From a W-2

How to Calculate an AGI From a W-2
The W-2 form is the starting point for figuring adjusted gross income.

Determine Gross Income

You must find your gross income to calculate AGI. Look in box 1 of your W-2 form for total wages, tips and other compensation. To that figure, add any taxable interest and dividends paid on stocks you own plus capital gains, which are profits from the sale of assets like stocks, real estate or other investments. Subtract any capital losses from the sale of assets. Include earnings from a business, S corporation or partnership plus alimony, royalties you may have received -- for example, from book or music sales -- any unemployment benefits and farm or rental income. You also add the taxable portion of retirement income from pensions and other retirement savings plans, and annuities. All of these forms of retirement income may be partially tax-exempt if you contribute to the plans before retirement. If part of your Social Security benefits are taxable, include this amount as well.

Make Necessary Adjustments

Adjust gross income by subtracting tax deductible contributions to individual retirement accounts and other qualified retirement savings plans. Also subtract student loan interest, alimony paid, moving expenses and penalties for early withdrawals from savings accounts. Finally, subtract 50 percent of self-employment taxes paid, if any. The result is your adjusted gross income.