 TITLE: What Does Adjusted Gross Income Mean? CONTENT: What Is AGI Used for?\n---------------------\nAGI is one of the key metrics that determine how much income tax you owe, both at the state and federal levels. Once you calculate your AGI, you're ready to take your allowable deductions and exemptions and figure out how much tax you owe.\nThe IRS also requires you to enter your prior year's AGI when you e-file if you've prepared your own taxes. You'll find your AGI on last year's IRS Form 1040, line 8B.\nAGI is the figure lenders are looking for when they ask for your income on a mortgage application. Your AGI provides insight into multiple sources of income, not just your wages. This helps your lender get a clearer picture of how large a loan payment you can afford each month, based on all of your monthly income. Your AGI is also relatively easy for a lender to verify by reviewing your past tax returns.\nApplying for financial aid? AGI is the income used for the Free Application for Federal Student Aid (FAFSA). Overall, it's never a bad idea to clarify what a credit card company, lender or even the IRS means when they ask you for income information. But, more often than not, your AGI is the number they're looking for. END