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I am done with my federal tax W4 form but I am not 100% sure about one line 4 of the deductions and adjustments worksheet.

Are Adjusted Income and Adjusted Gross Income the same?

To me the Adjusted Gross Income seems to be the (sum of all income annually minus some deductions) whereas Adjusted Income is just the income like student loan interest etc. Can someone please clarify?

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TL;DR - "Adjusted Gross Income" and "Adjusted Income" might be the same, but you might also be confusing the terms.

Line 4 of that worksheet states

Enter an estimate of your 2019 adjustments to income, qualified business income deduction, and any additional standard deduction for age or blindness (see Pub. 505 for information about these items). [emphasis mine]

I do not see "Adjusted Income" in that statement, nor elsewhere in the form. Perhaps you misread "adjustments to income"?

At any rate, "Adjusted Gross Income" (AGI) is a specific term used on your tax return that specifies the amount of income subject to Federal income tax. Usually your AGI is your total pre-tax income, minus the standard or itemized deduction amounts, and then minus any other deductions. The itemized deductions (not the income or other deductions) are included on Line 1 of the referenced worksheet.

The other deductions which make up your AGI are given on line 4. These are sometimes known as "off the top" deductions (you don't have to itemize to get them), such as Traditional IRA or HSA Contributions, student loan interest, or self-employed business expenses.

As stated above, IRS Publication 505 has details on what types of deductions can be included on line 4.

To me the Adjusted Gross Income seems to be the (sum of all income annually minus some deductions) whereas Adjusted Income is just the income like student loan interest etc. Can someone please clarify?

You are correct regarding "Adjusted Gross Income", but student loan interest would be called "an adjustment to income" instead. Student loan interest is not "income" but a deduction in this case.

Note that AGI is not referenced in the the W-4 form. AGI really only comes in to play when you file your return after the end of the year.

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  • Thanks for the answer @Nosjack however, I need some more help if you don't mind. For instance, If my income (salary) is 60000$, plus I have some other contributions of 5000$. Line 1 should fill up with 65000$ in the referenced worksheet (adjustments and deductions worksheets), for line 2, assume it's 12,200, line 3 is 52,800$? and line 4 should be filled up with any other deductions like disability etc. So, basically line 4 only covers deductions not AGI.
    – Vladimir Marin
    Commented Dec 26, 2019 at 22:25
  • @JumpMan Salary does not go on line 1, only your itemized deductions (reference Pub 505). If your contributions are charitable contributions of $5,000 then line 1 would only be $5,000. If line 2 was $12,200 then line 3 would be 0. Line 4 includes deductions that are not part of the itemizing list. AGI is not referenced anywhere in the W-4, that only comes in to play when you file your return after the end of the year.
    – Nosjack
    Commented Dec 26, 2019 at 22:32
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    @JumpMan But you are correct though, line 4 only includes deductions (not a total AGI number).
    – Nosjack
    Commented Dec 26, 2019 at 22:43
  • Sure, thanks again, yeah I understand it in terms of only deductions, this line is confusing to me: Line 4 includes deductions that are not part of the itemizing list. Not part of itemizing list means?
    – Vladimir Marin
    Commented Dec 26, 2019 at 22:50
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    @JumpMan The "itemizing list" I referenced was simply the list given in Pub 505. They are given on page 7 (the pub is linked in my answer). The deductions that are included on line 4 are given just below that on the same page.
    – Nosjack
    Commented Dec 26, 2019 at 22:56
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Your Adjusted Gross Income (AGI) is your total income minus any adjustments to that income. Yes, this explanation is a tautology!

The thing to remember is that many deductions, maybe most deductions, are not adjustments. For example, assuming you itemize, charitable deductions are not adjustments, and they are not deducted to get the AGI. Itemized deductions are deducted from AGI to get income subject to taxation. An adjustment says that income was never income at all; in the eyes of the IRS it did not happen. One example of an adjustment is:

If you receive Social Security income, a certain percentage depending on your income level is exempt from income tax. Often (but not always, especially for lower income recipients) this is 15%. That 15% is an adjustment and is deducted from your gross income -- one step in calculating your adjusted gross income.

When your sources of income report to you and to the IRS, via 1099s, they distinguish between total income and taxable income. The taxable income goes towards your AGI, not the total income.

Since I have never taken a standard deduction, nor ever had a really complicated return, I cannot give you further examples of adjustments, or state with certainty whether a standard deduction is or is not treated as an adjustment. Itemized deductions are definitely not adjustments.

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