Introduction
Wondering how to **calculate adjusted gross income from your paycheck stub**? AGI is a key figure on your tax return and often impacts your eligibility for credits, deductions, loans, and other benefits. This detailed 2025 guide walks you through using your latest pay stub—especially the year-to-date total—as the starting point for estimating and eventually calculating your AGI accurately.
What Is AGI and Why It Matters
Your Adjusted Gross Income (AGI) is the result of your total gross income from all sources minus certain IRS-allowed "above-the-line" adjustments—like student loan interest, retirement contributions, and HSA deductions. Unlike net pay, which is your take-home after taxes and withholdings, AGI reflects your taxable income before standard or itemized deductions. It sets the stage for calculating your tax bracket, qualifying for credits, and determining your eligibility for benefits.
Step 1: Use Your Paycheck Stub’s Year-to-Date Gross Income
Look at your most recent paycheck stub, preferably the year-end version. Locate the **Year-to-Date (YTD) Gross Income** line—this figure typically represents your total income from employment for the year so far. If this is your sole source of income, it can serve as a reliable approximation of your gross income for AGI purposes.
Step 2: Add Other Income Sources (If Any)
If you earn income from more than one job, freelance work, investments, or rental properties, add those amounts to your YTD gross from your pay stub. This gives you your total gross income for the year, which serves as the starting point for AGI.
Step 3: Identify "Above-the-Line" Adjustments
From your total gross income, subtract any qualified adjustments—the “above-the-line” deductions—including:
- Traditional IRA or HSA contributions
- Student loan interest
- Educator expenses
- Self-employment tax deductions
- Alimony (for agreements pre-2019)
- Other eligible adjustments from Schedule 1 of IRS Form 1040
These deductions lower your AGI and potentially increase your tax refund or reduce owed taxes.
Step 4: Estimate Your AGI
Use this formula to estimate AGI:
Total Gross Income (from pay stub + other sources) – Total Adjustments = Estimated AGI
This gives you a close approximation of what your AGI will look like at tax filing time.
Important Considerations & Limitations
- Year-to-date gross might not include bonuses or intermittent income received after the last paycheck.
- Some "above-the-line" deductions—like educator expenses—aren’t reflected on your pay stub and require additional tracking.
- If you have complex income sources or tax situations (like self-employment income or rental earnings), consult tax software or a tax professional.
The closer you align your inputs to actual numbers, the more accurate your AGI estimate will be.
Step 5: Use AGI for Tax Planning and Financial Applications
With your AGI estimate in hand, you can:
- Project your tax liability or refund
- Check eligibility for deductions or credits tied to AGI thresholds
- Provide lenders or landlords with proof of income to support applications
- Prep for tax filing by comparing your estimate to your actual AGI on Form 1040 (Line 11)
Sample AGI Calculation
Let’s walk through an example: Jane has a YTD gross from her paycheck stub of $60,000. She also earned $5,000 in freelance income. Her total gross income is $65,000. Her deductible adjustments are:
- $2,000 in HSA contributions
- $1,500 in student loan interest
Estimated AGI = $65,000 – $3,500 = $61,500.
Conclusion
Using your paycheck stub to calculate AGI is straightforward—start with your YTD gross income, add other income sources if any, subtract eligible adjustments, and you’ve got an accurate projection ready for tax or financial planning. Need help staying organized with deductions or producing clean income documentation? Generate a compliant pay stub instantly or refer to our Regular Pay Stub guide for format examples that work with AGI calculations.
