Tax Filing 2021: what is the adjusted gross income and how do I check mine?
Tax filing takes on even greater importance this year and could decide how much you are able to receive in the next round of stimulus checks.
Tax season is upon us once again as Americans have to file annual tax returns with the IRS. However this year is a bit different with some new terms, new payments and even greater consequences.
The federal government has issued trillions of dollars in relief to help the country through the economic downturn caused by the coronavirus pandemic. The introduction of stimulus checks adds another layer of importance to this year’s tax returns, with any upcoming stimulus payments likely to be based on the information filed this spring.
Adjusted Gross Income will be used to decide stimulus check eligibility
Congress is gradually working towards passing the covid-19 economic relief bill, the American Rescue Plan, proposed by President Joe Biden shortly before he took office. The $1.9 trillion package includes, amongst other things, a round of $1,400 stimulus checks for eligible Americans.
To break that down: your gross income is the total amount of money that you receive in a year through wages, dividends, capital gains, business income, retirement distributions and any other income streams you may have.
Adjustments can be accrued through educator expenses, student loan interest, alimony payment and contributions to a retirements account; which are all expenses to be deducted from your gross income to lower your AGI.
Therefore your AGI may be lower than your gross income, but can never be higher than it. In the case of married couples who file jointly, all the incomes streams and adjustments are bundled together to produce a single figure.
How do I check my Adjusted Gross Income?
Reports suggest that the new round of stimulus checks will be available to individual filers with an AGI of less than $75,000 per year, and to joint-filers with a combined AGI of less than $150,000 per year.
To work out your own AGI and see whether you are eligible for the full $1,400 stimulus checks the IRS has published this guide: