Gross Income On W2

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Question: Is your AGI the amount after 401k deductions on your w2?

We bought a home this year and found out that the 8k tax credit starts to phase out when combined income is at 150k-we are going to be close and I need to know how many hours I should put in at work. Right now I have a 5k difference between my gross and my taxable wages? Are my taxable wages essentially my AGI? I contribute to a 401k and pretax health? Thanks for your answer,

Answer: Remember, you have the option to amend your 2008 tax return or claim the credit for 2009. If your 2008 income was below the limit, then your best option might be to amend your 2008 return and just work all you can now to make as much money as you can.

Yes, AGI is essentially your Taxable Income, not gross. You can reduce your AGI with contributions to 401k plans or traditional IRA plans. Also, if you’re paying interest on a qualified student loan, that interest is subtracted from your income before your AGI.

Also, you can make 2009 contributions to an IRA plan up until April 15th of 2010. Just be sure to tell your broker you want them to count as 2009 contributions. So if at the last minute you realize you are going to miss out on some of the tax credit, you might want to go add to your IRA (or open one). This could reduce your AGI, give you more tax credit, and putting money aside for retirement savings is always a good thing.

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