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Adjusted Gross Income, or AGI, is one of the most asked for figures in the tax world for individuals. This figure is used to determine tax bracket, eligibility for credits and deduction, and for a host of non-tax related things, like financial aid for education, or for credit worthiness when buying something big, like a house.

Calculating AGI is a simple concept, with dozens of complexities that can make it tedious. So here I'll try to explain the basics, and not so much the complex, because if you get into the complex, you should really see a tax professional.  The picture below is part of the first page of the federal form 1040, you can scroll down to the explanations of each item. Remember, i'm only going to talk about the simpler stuff, that applies to 85% of people. 
There are 30 individual lines to figure your AGI, so you will want paper, or a Form 1040 in front of you. And yes, there is a reason I start at line 7.

7: Wages, salaries, tips, etc. Attach Form(s) W-2.
What you got paid, if you have a W-2 this is usually box number one. If you are a waiter/waitress or bartender or                   some other profession who makes tips, you would have to add your tip income in here. Unless you are retired, or unemployed during the entire year, there should always be something here.

8a: Taxable interest. Attach Schedule B if required.
interest from a bank (or dividends from a credit union) assume interest you make is the taxable type unless you are told otherwise. Also, if a bank gives you money for opening a new account, it will be on their 1099-INT that they send you. You should expect to get at least one of these 1099-INTs from each bank you have an interest account at.
8b: Tax-exempt interest. Do not include on line 8a.
interest that you know is tax exempt, the IRS likes to keep track of everything.

9a: Ordinary dividends. Attach Schedule B if required.
9b: Qualified dividends. 
dividends from stocks and ownership (not dividends from credit unions). When you get a 1099-DIV it will tell you how much is 'ordinary' and how much is 'qualified' just put your totals in here.

10: Taxable refunds, credits or offsets.
 if a state or local government gave you money back, it might be taxable (lame I know) but it depends on the circumstances surrounding why you got that money, and thus is more complicated, so lets move on. They will usually send you a 1099-G

11: Alimony received.
ALIMONY! If you receive it, you pay the tax on it! (does not include child support) If you paid alimony to someone else, put it on line 31, so that they have to pay the taxes and not you.

12: Business income or (loss). Attach Schedule C or C-EZ.
Businesses are a whole different animal, but this is where the total goes for reference.

13: Capital gain or (loss). Attach Schedule D if required.
Capital gain is basically you made money from not a business or job. Like if you sold a car for a lot more than you bought it for. This includes EVERY stock sale. Even if it was for pennies, you will receive a 
1099-B from you broker. But it's complicated, so lets keep moving.

14: Other gains or (losses). Attach form 4797
non capital gains, like capital gains, but on stuff that isn't a capital asset. Just another line 13 for different types of things being bought sold and traded. IRS instructions page.

15 : IRA distributions & 16: Pensions and annuities
If you are getting money from retirement accounts, it probably wasn't taxable when you put it in, but it is when you take it out. If you paid taxes on the money you put in, it isn't taxable when you take it out. You only have to pay the taxes once. This changes from person to person and year to year. You should get a 1099-R from every account you received money from during the year.

17: Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E
Rentals of all types, this is where the total of schedule E goes. 

18: Farm income or (loss). Attach Schedule F.
Total from Schedule F (Farming Income)

19: Unemployment Compensation
UNEMPLOYMENT! If you received unemployment during the year, IT IS TAXABLE. Line one of a 1099-G.

20: Social Security benefits
From SSA-1099 that the social security administration sends out. Social security is partially taxable in a complicated manor, so I've made a whole set of pages to help, here.

21: Other income
Other income... people ask me, should i report this money i made from ________? The answer is, do you want to pay tax on it now, or do you want the IRS to find out about it later? You found a $20 bill on the ground, no one cares. You made $5000 during the year doing handyman work for you neighbors, probably want to be upfront about that. This includes gambling on slots, poker (online or otherwise) casinos and sporting events.

22: Combine the amounts in the far right column for lines 7 through 21. This is your total income.
Your total of all the lines above, this is the amount you made in the year. Count twice, a slip up in simple math can be costly later.

Okay now for the direct deductions, or the things that make it look like you made less money than you actually did.
23: Educator Expenses
If you are a teacher (k-12 only) you can deduct some amounts that you paid out of pocket for your class. There is a limit on this of course, but at least they are trying.

24: Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 or 2106-EZ
far more complicated that you'll ever want to know. IRS page if you are not a reservist, a performing artist, or a fee-based government official, skip this line.

25: Health savings account deduction. Attach form 8889
There are things called Health Savings Accounts (HSA's), if you don't have one, or didn't contirbute to one, skip this line. I'll make a page on that later. IRS page

26: Moving Expenses. Attach Form 3903.
Very specific moving expenses, if you didn't move FOR WORK, skip this line. I'll make a page.

27: Deductible part of self-employment tax. Attach Schedule SE. 28: Self-employed SEP, SIMPLE, and qualified plans.  and 29: Self-employed health insurance deduction.
If you ever need to fill out a Schedule SE for being self-employed, part of it tells you to put a number on line 27. The others are deductions that only the self employed can take, since they don't have an employer paying for anything. If you need to put anything on these lines, you should at least have a tax professional on speed dial. If you aren't self-employed, you can skip all these lines.

30: Penalty on early withdrawal of savings.
If you paid that nasty penalty for taking money out early, at least you don't have to pay taxes on the penalty too. If you didn't pay this penalty for any reason, you can skip this line.

31a: Alimony paid.
31b: Recipient's SSN.
ALIMONY! If you paid alimony to some one else, put it here(not including child support), so that they have to pay the taxes and not you. If you received alimony put the amount on line 11. 

32: IRA Deduction.
You can contribute to your retirement with tax free money, normally up to a max of $5000 per year, but this amount can be less if you are part of an employer pre-tax 401(k) or similar program. The total of all programs can't exceed this max. If you didn't contribute to any type of retirement account in the year, IT"S NOT TOO LATE! This line actually allows people to contribute up until April 15th of the following year!

33: Student loan interest deduction.
The interest on federal student loans in not taxable, so you get to subtract it from your income. You are already paying the interest to the federal government.

34: Tuition and fees. Attach form 8917.

35: Domestic product activities deduction. Attach Form 8903.
Complicated item that affects very few taxpayers, lets move on. IRS page

36: Add lines 26 through 35
Total amount of all your direct deductions. 

37: Subtract line 36 from line 22
Your AGI. Subtract your total direct deductions (line 36)from your total amount made in the year (line 22)