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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.