What exactly is MAGI for IRA purposes?
Executive summary
MAGI for IRA purposes is your adjusted gross income (AGI) with specific deductions and exclusions added back; it determines whether you can deduct traditional IRA contributions and whether you may contribute to a Roth IRA, with 2025 phase‑out thresholds such as $79,000–$89,000 (single, workplace plan cases) for traditional‑IRA deduction limits and $150,000 (single) / $236,000 (married filing jointly) for full Roth contributions [1] [2] [3]. The exact items you add back to AGI depend on which IRA rule or IRS worksheet you use — IRS Publication 590 and the IRS MAGI guidance list the authoritative adjustments [1] [4].
1. What MAGI means for IRA rules — the short definition
For IRA purposes MAGI is not a single universal number printed on your Form 1040; it’s your AGI modified by adding back particular tax items the IRS specifies for that deduction or credit — use the MAGI rules for the specific IRA question you’re answering, such as the traditional‑IRA deduction worksheet or Roth‑eligibility calculation [1] [4]. Financial sites summarize this the same way: MAGI = AGI plus certain excluded or deducted items, and those additions are what change eligibility for IRA deductions and Roth contributions [5] [6].
2. Why MAGI matters: two different IRA consequences
MAGI governs two distinct outcomes. First, whether and how much of your traditional IRA contribution is tax‑deductible depends on MAGI and whether you or your spouse are covered by an employer retirement plan; if neither spouse has a workplace plan the deduction is generally allowed regardless of MAGI [1]. Second, MAGI sets Roth IRA contribution eligibility and the phase‑out ranges: in 2025 a full Roth contribution requires MAGI below $150,000 for single filers and $236,000 for joint filers, with partial phases above those lines [3] [7].
3. The practical add‑backs you’ll usually see
The IRS directs taxpayers to “add back” certain items to AGI to arrive at MAGI for specific purposes; common examples across guidance and tax help sites include excluded foreign income, certain passive losses or deductions, and sometimes student loan interest or traditional IRA deductions depending on the worksheet you’re using [1] [4] [8]. Tax preparer sources and banks echo that the formula "changes depending on the situation," so the particular MAGI for a Roth test can differ slightly from the MAGI used for other credits [9] [4].
4. Numbers taxpayers care about for 2025 (examples reported)
Multiple industry references cite 2025 thresholds: traditional‑IRA deduction phaseouts for workplace‑covered single filers begin and end around the $79,000–$89,000 range (sources report slightly different cutoffs depending on filing status and plan coverage) and Roth full contribution limits shown as $150,000 (single) and $236,000 (joint) for full 2025 contributions [2] [10] [3]. Note: reporting across outlets shows small variations in band endpoints; the IRS publications and Publication 590 worksheets are the controlling authority [1] [3].
5. Where sources disagree or simplify — and why it matters
Consumer sites (TurboTax, NerdWallet, Bankrate, Fidelity, H&R Block) all present the same core idea — MAGI = AGI plus specific add‑backs — but they summarize different example thresholds and phase ranges in slightly different terms, reflecting how the IRS applies different MAGI definitions to different benefits [2] [5] [6] [9] [4]. That variation can create confusion if you use a single headline number without checking which worksheet or rule applies; the IRS page and Publication 590 are the authoritative ties back to the exact add‑backs you must use [1].
6. How to proceed if you want certainty
Calculate AGI from line 11 of your Form 1040, then consult the IRS MAGI guidance and the specific worksheet in Publication 590 (or the IRS MAGI page) to add the items required for the IRA test you face; many tax‑software vendors and preparers provide built‑in worksheets that implement those add‑backs [1] [4] [9]. If your reported thresholds are near the published phase‑outs, follow IRS worksheets rather than general web summaries to avoid mistaken ineligibility or missed deductions [1].
Limitations and sources: This piece summarizes IRS guidance and major tax‑service reporting; exact add‑backs and phaseout endpoints vary by the specific IRA rule and year, and readers should consult IRS Publication 590 and the IRS MAGI page for the authoritative calculations [1] [4]. Available sources do not mention individualized tax planning beyond these public worksheets (not found in current reporting).