Word of the Day Wednesday: Adjusted Gross Income (AGI)
Each Wednesday, MEFA features a Word of the Day, where we highlight a word (or sometimes a phrase) related to the college planning process. This month, we're focusing on vocabulary related to the financial aid process. Today's Word of the Day is Adjusted Gross Income (AGI).
When parents are completing the FAFSA® we often get asked, "What is my Adjusted Gross Income and where can I find it on my tax return?" Adjusted Gross Income (AGI) is the parents' (and student's, reported separately in the student section of the FAFSA) total gross income minus any adjustments made to that income on the tax return. You can find your Adjusted Gross Income on the second page of your 1040, which is your main tax form.
Both the parents and the student must report their AGI on the FAFSA. Parent AGI will be reported in the Parent Financial Information section of the FAFSA, and Student AGI will be reported in the Student Financial Information section.
Why is this important to you?
The AGI is an important element in the formula used to calculate a family's Expected Family Contribution (EFC) . Your EFC will help the college financial aid office determine your eligibility for federal, state, and college financial aid. To file your FAFSA, visit FAFSA.gov