Reducing your current-year adjusted gross income is usually a tax-smart idea. Here are 10 ways to reduce your AGI (and modified AGI) over the short and long run.
Closeup on AGI
AGI equals all taxable income items minus selected deductions for such items as deductible IRA and retirement plan contributions and alimony payments required by pre-2019 divorce agreements.
Lowering your AGI reduces your taxable income for the year and your exposure to unfavorable AGI-based provisions. For example, lowering AGI can increase the amount of Social Security benefits that you can receive federal-income-tax-free and increase your allowable higher education tax credits.