A box in which to enter each parent’s annual “Adjusted Gross Income” is a new required element on the Income page. Adjusted Gross Income is simply a parent’s gross income reduced by thirteen different adjustments (expenses) such as,
- alimony paid,
- retirement contributions,
- student loan interest,
- educator expenses,
- moving expenses,
- HSA contributions, and
- the deductible portion of SE tax, among others.
Unlike other elements on the Income page, which can be entered either as annual or monthly amounts, the Adjusted Gross Income (“AGI”) is always an annual amount.
AGI is the starting point for determining a parent’s income tax bracket, and it bears directly on valuing dependent exemptions, child care tax credits, and child tax credits.
The Bradley calculator will suggest an estimated AGI using current monthly income and estimated alimony (maintenance), but the program does not collect enough data to provide anything more than an estimate. The suggestion is displayed on the green bar directly beneath the AGI input area. To use the suggested amount, simply double-click on
the suggestion, displayed in yellow.
The very best place to get a parent’s AGI, however, is from their most recent income tax return (Line 37 – Form 1040). An example of the AGI section of IRS Form 1040 appears below.
Be sure to enter an AGI value for each parent. If no value is entered, the calculator cannot determine a parent’s income tax bracket, and therefore will not be able to value dependent exemptions, child care tax credits, and child tax credits, or calculate the Income Tax Considerations adjustment for Section E.