Adjusted Gross Income

This is a Federal tax term that is based upon the difference between a taxpayer’s gross income and adjustments made to that income such as deductions for an IRA account, pension plan, or alimony. These are made before standardized and itemized deductions and personal exemptions. The income used includes salary and other employment income, interest and dividends as well as long and short-term capital gains and losses and the adjusted gross income is essentially a calculation of an individual’s income tax liability.  

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