What Is My Adjusted Gross Income? The Key to Your Tax Strategy

When clients ask, “What is my adjusted gross income?”, they’re pointing to one of the most critical figures on the tax return. For advisors, Adjusted Gross Income (AGI) is more than just a number—it’s the foundation of effective tax strategy.

AGI impacts everything from retirement contribution eligibility to Medicare premiums and tax credit phaseouts. Advisors who know how to interpret AGI can help clients avoid missed opportunities, spot inefficiencies, and structure smarter financial strategies.

What Exactly Is Adjusted Gross Income?

Adjusted Gross Income is essentially total income minus certain adjustments allowed by the IRS. It’s a starting point for calculating taxable income and determines eligibility for numerous deductions and credits.

AGI includes:

• Wages, salaries, and tips
  
  

• Business or self-employment income
  
  

• Rental income
  
  

• Capital gains
  
  

• Retirement distributions
  
  

• Interest and dividends
  
  

Minus adjustments such as:

• Student loan interest
  
  

• Health savings account (HSA) contributions
  
  

• Self-employed retirement contributions
  
  

• Certain educator expenses
  
  

The resulting AGI figure appears on Line 11 of IRS Form 1040.

How Does AGI Affect Your Client’s Financial Strategy?

For financial advisors, AGI isn’t just a tax detail—it shapes the entire planning landscape. Here’s how it influences common scenarios:

• Retirement planning – AGI determines Roth IRA eligibility and the deductibility of traditional IRA contributions.
  
  

• Healthcare costs – Higher AGI can push clients into Medicare IRMAA surcharges.
  
  

• Education credits – AGI impacts eligibility for the American Opportunity and Lifetime Learning credits.
  
  

• Charitable giving – Deduction limits are based on AGI percentages.
  
  

• Investment strategy – AGI is the baseline for determining tax-loss harvesting opportunities.
  
  

Advisors who understand these interactions can help clients make proactive moves that reduce tax burdens.

What Inefficiencies Can Advisors Identify Through AGI?

By analyzing AGI, advisors can uncover tax inefficiencies and planning opportunities. Key areas to review include:

• Missed retirement contributions – Did the client maximize contributions within AGI limits?
  
  

• Overlooked HSAs or FSAs – Tax-advantaged accounts can directly reduce AGI.
  
  

• Unrealized losses – Harvesting portfolio losses can offset gains and lower AGI.
  
  

• Poorly timed income events – Equity compensation or Roth conversions in high-income years can inflate AGI unnecessarily.
  
  

• Charitable planning opportunities – Bunching deductions or using donor-advised funds may maximize impact.
  
  

This analysis turns AGI into a diagnostic tool for smarter tax planning.

Where Do You Find AGI on Tax Returns?

Clients often struggle to locate AGI, so advisors should know exactly where to point:

• Form 1040 (current) – AGI is on Line 11.
  
  

• Form 1040-SR (for seniors) – AGI is also on Line 11.
  
  

• Prior years (before 2018 reform) – AGI appeared on different lines, so always double-check older returns.
  
  

Locating AGI correctly ensures your planning discussions are grounded in the right number.

How Can Advisors Use AGI in Client Conversations?

Bringing AGI into client meetings helps position you as a proactive, tax-aware advisor. Here are examples of questions you can frame around AGI:

• Is your current AGI pushing you over Roth contribution limits?
  
  

• Are you at risk of Medicare premium increases because of AGI growth?
  
  

• Could adjusting the timing of charitable gifts lower your AGI this year?
  
  

• Would spreading out equity compensation exercises reduce AGI spikes?
  
  

These conversations show clients that you’re not just managing investments—you’re integrating tax strategy into wealth planning.

What’s the Financial Advisor’s AGI Checklist?

To make AGI analysis consistent across your book of business, consider using this checklist:

1. Locate AGI on the most recent return.
   
   

2. Compare AGI across prior years. Look for trends that signal planning opportunities.
   
   

3. Check eligibility thresholds. Confirm whether clients are missing out on credits or deductions due to AGI.
   
   

4. Review contribution strategies. Ensure retirement and HSA accounts are fully optimized.
   
   

5. Identify timing opportunities. Note whether charitable giving, Roth conversions, or capital gains could be better timed.
   
   

This framework helps you transform a single line on a tax return into a roadmap for client value.

Why Is AGI a Competitive Edge for Advisors?

Most advisors overlook AGI as “just another number.” But by elevating it in planning discussions, you differentiate your practice. Benefits include:

• Demonstrating deeper expertise in taxes and compliance.
  
  

• Building stronger client trust by connecting tax strategy with long-term goals.
  
  

• Creating year-round opportunities for proactive engagement.
  
  

• Positioning yourself as the advisor who goes beyond portfolio management.
  
  

AGI is a powerful tool for showing value and strengthening client loyalty.

Turn AGI Into a Strategic Advantage

When clients ask, “What is my adjusted gross income?”, it’s an opening for advisors to showcase their value. By understanding how AGI works, where to find it, and how to leverage it, you can transform a simple tax figure into the cornerstone of smarter wealth strategies.

Let’s talk about how Jalada can help you integrate AGI-focused tax insights into your advisory practice. Contact us today.

Disclaimer: This material is provided for informational purposes only and does not constitute tax advice. Consult a qualified tax professional or CPA for guidance on the specific tax situation.