1 Answer

Instructions
1
Determine your gross income. On a Form W-2, your gross income is reported in Box 1 under wages, tips and other compensation. On a Form 1099-MISC, your gross income is reported in Box 7 under nonemployee compensation. You may also have additional income not reported on these forms, including interest earned from investments, stocks dividends and trust payments, which must also be included when calculating your total gross income.

2
Determine what deductions you are eligible to claim. There are certain deductions you can claim "above the line," which reduces your gross income prior to determining your income tax liability. These include alimony payments, contributions to your IRA, the one-half self-employment tax credit, contributions to self-employed HSA, and interest paid (not owed) on student loans.

3
Calculate the total amount of deductions you are eligible to claim by adding up the maximum amounts you are allowed for each deduction you are taking.

4
Subtract the total amount of the deductions you are claiming from your total gross income calculated in Step 1. Your formula should resemble:

Total Gross Income - Total Amount of All Deductions = Adjusted Gross Income

Tips & Warnings
AGI is the bottom line on the front page of your 1040 or 1040A form.

Read more: How to Calculate Adjusted Gross Income | eHow.com http://www.ehow.com/how_5830930_calculate-adjusted-gross-income.html#ixzz2M8uK7Vx1