J.K. Lasser's Your Income Tax 2017

Chapter 12 Deductions Allowed in Figuring Adjusted Gross Income

1. 12.1 Figuring Adjusted Gross Income (AGI)
2. 12.2 Claiming Deductions From Gross Income
3. 12.3 What Moving Costs Are Deductible?
4. 12.4 The Distance Test
5. 12.5 The 39-Week Test for Employees
6. 12.6 The 78-Week Test for the Self-Employed and Partners
7. 12.7 Claiming Deductible Moving Expenses
8. 12.8 Reimbursements of Moving Expenses

Adjusted gross income (AGI) is the amount used in figuring the 10% floor (or 7.5% if age 65 or older) for medical expense deductions (17.1), the 10% floor for personal casualty and theft losses (18.11), the 2% floor for miscellaneous itemized deductions (19.1), and the charitable contribution percentage limitations (14.17).

AGI also determines the thresholds for the phaseouts of overall itemized deductions (13.6) and personal exemptions (21.12).

If you follow the instructions and order of the tax return, you will arrive at adjusted gross income automatically. But if you are planning the tax consequences of a transaction in advance of preparing your return, see the explanation of how to figure adjusted gross income (AGI) (12.1).

There is an advantage in being able to claim deductions directly from gross income (“above-the-line”) in arriving at adjusted gross income, since such deductions are allowed even if you claim the standard deduction rather than itemizing deductions on Schedule A of Form 1040. Another advantage of such deductions is that they also reduce state income tax for taxpayers ...