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Finance Glossary

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Adjusted Gross Income - AGI


Adjusted Gross Income (AGI) refers to all the money you make that you have to pay taxes on. It includes your salary, bonuses, money you make from mutual fund distributions, your freelance job, that vacation home you rent to the weird woman with the parakeets, and anything else that the IRS (God's financial quarterback) can dip into when it’s time to pony up income tax.

AGI matters at tax time, but it’s also a big deal if you decide to buy a house. Your banker will take a look at your AGI when deciding how much to lend you, so it can decide whether you can afford a fixer-upper with the ten-foot Elvis bouffant on the roof or the fancy condo with only a modest-sized Elvis shrine. The higher your AGI, the more the bank will generally be willing to lend you.